Document:

tsla-ex102_737.htm

Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicate where omissions have been made.

 

 

Exhibit 10.2

 

English Convenience Translation

-Original Agreement has been executed in Mandarin Chinese-

 

 

 

 

 

 

Grant Contract for State-owned Construction Land Use Right in Shanghai City

(Category of Industrial Land Use Project)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shanghai Planning and Land Resource Administration Bureau

1

 

 

Special Notification

 

 

 

 

 

Grant Contract for State-owned Construction Land Use Right in Shanghai City 

(Category of Industrial Land Use Project)

 

 

[***] Land Grant Contract [***] (Version 1.0)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shanghai Planning and Land Resource Administration Bureau

 

Oct 17th, 2018

 

 

1

 

Contract Number: [***]

 

 

Grant Contract for State-owned Construction Land Use Right in Shanghai City

 (Category of Industrial Land Use Project)

 

This contract is made and entered into by:

 

	
Grantor:
	
Shanghai Planning and Land Resource Administration Bureau

	
Address:
	
Beijing West Road No. 99

	
Post Code:
	
200003

	
Tel.:
	
63193188

	
Fax:
	
63193674

 

 

 

 

	
Grantee:
	
Tesla (Shanghai) Co., Ltd.

	
Contact Person:
	
[***]

	
Percentage of Capital Contribution:
	
100%

	
Registered Address:
	
D203A, Tonghui Rd. No. 168, Nanhui New Town, Pudong New Area

	
Mailing Address:
	
26/F HKRI Centre Two, 289 Shi Men Yi Road, Jing’an District, Shanghai

	
Post Code:
	
200040

	
Tel.:
	
[***]

	
Fax:
	
010-59057003

	
Bank:
	
[***]

	
Account
	
[***]

 

 

 

2

 

Chapter IGeneral Provisions

 

	
Article 1
	
According to the Property Law of the People’s Republic of China, the Contract Law of People’s Republic of China, the Land Administration Law of the People’s Republic of China, the Law of the People’s Republic of China on Urban Real Estate Administration, and other laws, relevant regulations and land supply policies, the Parties hereto agree to enter into this Contract under the principles of equality, voluntariness, good faith and in light of the valuable consideration.

 

	
Article 2
	
The ownership of the land, of which the land use right is granted, (the “Granted Land”) shall belong to the People’s Republic of China (“PRC”). The Grantor shall grant the state-owned construction land (category of industrial land use project) use right (the “Land Use Right”) according to the authorization by laws. All the underground resources and imbedded materials shall not fall within the scope of the granted state-owned construction land use right.

 

	
Article 3
	
The Grantee has the right to possess, utilize, benefit from and legally dispose of the state-owned construction land obtained according to the laws during the term of grant and shall be entitled to construct buildings, fixtures and facilities attached to them in their utilization of the land.

 

 

Chapter IIDelivery of the Granted Land and Payment of Grant Fees

 

	
Article 4
	
The registration number of the Granted Land hereunder is 201800465816460666. The total area of the land is eight hundred and sixty-four thousand eight hundred and eighty-five square meters (864,885.00 square meters), of which the area of the Granted Land is eight hundred and sixty-four thousand eight hundred and eighty-five square meters (864,885.00 square meters).

 

The Granted Land under this Contract is located at Lot Q01-05 of the Lingang Heavy Equipment Industrial Zone.

 

The horizontal boundaries of the Granted Land are East to the green belt of the control line of the East China Sea Second Bridge preserved for planning purpose; West to the green belt of South Feng Boundary River; South to the green belt of People’s Pond; North to the green belt of Laolitang River; the horizontal boundary map is attached hereto as Attachment1.

 

The vertical boundaries of the Granted Land are from __\__ meters above the land to __\__ meters below the land with __\__ meters’ height difference. The vertical boundary description is attached hereto as Attachment 2.

 

The spatial scope of the Granted Land is a closed area shaped by the horizontal plane constituted by the foregoing boundary marks extending to the vertical boundaries.

 

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Article 5
	
The usage of the Granted Land under this Contract is for industrial land use.

 

	
Article 6
	
The Grantor shall deliver the Granted Land to the Grantee within 40 working days after the execution of this Contract, that is, December 12th 2018. The Grantor shall keep the Granted Land as cleared land upon delivery.

 

	
Article 7
	
Prior to the execution of this Contract, the Grantor shall be responsible for the investigation and inspection work of the quality of the geological environment of land and underground water hereunder. The relevant inspection report shall be confirmed by the environmental protection authorities which shall issue written confirmation as the attachment of this Contract.

 

	
Article 8
	
The usage term of the state-owned construction land hereunder is industrial land: 50 years, to be calculated from the delivery date of the Granted Land stipulated in Article 6 of this Contract. If the original allocated (leased) state-owned construction land use right needs to be re-registered as being granted, the usage term shall be calculated from the execution date hereof.

 

	
Article 9
	
The grant fees of the state-owned construction land use right under this Contract (the “Grant Fees”) are RMB nine hundred and seventy-three million (RMB 973,000,000.00), i.e. RMB one thousand one hundred and twenty-five point zero one (RMB 1,125.01) per square meter.

 

	
Article 10
	
The deposit of the Granted Land of this Contract is 20.00% of the Grant Fees. The deposit constitutes part of the Grant Fees. The Grantee shall pay the deposit as guarantee of the performance of this Contract to the Local Treasury within 5 working days after the execution of this Contract.

 

	
Article 11
	
The Grantee shall pay to the Grantor the remaining Grant Fees according to the following Item (1) of this Article:

	
 
	
(1)
	
The Grant Fees of the state-owned construction land use right shall be paid in a lump sum within 30 working days after the execution of this Contract;

	
 
	
(2)
	
The Grant Fees of the state-owned construction land use right shall be paid in __\__ installments according to the following dates and amounts.

 

	
Article 12
	
If the Grantee agrees to pay the Grant Fees according to Item (2) of Article 11, the installments shall be paid in accordance with the following dates and amounts:

 

First InstallmentThe amount shall be __\__% of the Grant Fees, i.e. RMB__\__. The payment date shall be within __\__ working days after the execution of this Contract, i.e. before _____[date].

 

Second InstallmentThe amount shall be __\__% of the Grant Fees, i.e. RMB__\__. The payment date shall be within __\__ working days after the execution of this Contract, i.e. before _____[date].

 

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If the Grant Fees are paid in several installments, the overall Grant Fees shall be paid within 90 working days after the execution of this Contract, in which the First Installment shall be paid within 10 working days after the execution of this Contract in the amount no less than 50% of the overall Grant Fees (including deposit). When paying the Second and other Installments, the Grantee shall pay the accrued interests of outstanding fees to the Grantor according to the loan interest rate announced by the People’s Bank of China at the date of payment of the First Installment.

 

	
Article 13
	
To ensure the timely commencement of construction, completion of instruction and production by the Grantee, the Grantee shall pay 20% of the Grant Fees as deposit for timely performance (or in the form of a Letter of Guarantee) to the Shanghai Lingang Area Development Administration within 5 working days after the execution of this Contract.

 

The deposit for timely performance is composed of three parts, the deposit for timely commencement of construction accounts for 60% of the total deposit and timely completion of construction accounts for 20%, and timely commencement of production accounts for 20%.

 

If the Grantee is confirmed to have commenced the construction on time, the Shanghai Lingang Area Development Administration shall return the deposit for timely commencement of construction and its bank loan interests in full within 10 working days after the confirmation of commencement of construction, i.e. before June 22nd 2019.

 

If the Grantee is confirmed to have completed the construction on time, the Shanghai Lingang Area Development Administration shall return the deposit for timely completion of construction and its bank loan interests in full within 10 working days after the confirmation of completion of construction, i.e. before June 22nd 2021.

 

If the Grantee is confirmed to have begun production on time, the Shanghai Lingang Area Development Administration shall return the deposit for timely production and its bank loan interests in full within 10 working days after the confirmation of production, i.e. before December 22nd 2021.

 

	
Article 14
	
Upon the full payment of the Grant Fees in accordance with this Contract, the Grantee shall apply for the registration of grant of the state-owned construction land use right with this Contract, the proof of payment of Grant Fees and other relevant materials.

 

 

Chapter IIIDevelopment, Construction and Utilization of the Granted Land

 

	
Article 15
	
Any new building, fixture and facilities attached to them to be constructed by the Grantee within the Granted Land shall be subject to the planning requirements 

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for granted land (see Attachment 3) provided by the municipal (county) planning administration authorities, among which:

 

In space above the ground, the nature of main buildings is industrial buildings; the nature of the auxiliary buildings is __\__; the rate of capacity of buildings above the ground is industrial land: less than 2.0; the area of buildings above the ground is 1,729,770.00 square meters with the limit of height being 30 meters ; the density of buildings above the ground is subject to the verified planning scheme; the rate of green lands is 20%.

 

In the underground space, the planned nature of the underground construction land is __\__; the maximum horizontally-projected area of the underground buildings (fixtures) is __\__; the range of depth is __\__; the total area of underground land is __\__; the total area of underground construction is __\__,among which the area for business use is __\__ square meters, for office use is __\__ square meters, for parking use is __\__ square meters, for industrial use is __\__ square meters, for storage use is __\__ square meters. If the underground space needs to be commercially developed during the construction stage while it is not agreed in this Contract, the Grantee shall sign a supplementary grant contract with the Grantor and pay the supplementary grant fees before getting the planning license of construction projects.

 

Other land use requirement(s): _____\______ .

 

	
Article 16
	
The Grantee shall utilize the Granted Land in compliance with the land use purpose and the rate of capacity stipulated under this Contract and shall not make any changes. The category of industrial projects under this Contract shall not be changed without approval.

 

	
Article 17
	
The Grantee agrees that, according to the planning requirements set out by the planning authorities, the area for the purpose of enterprise’s internal administrative work and residential service facilities within the Granted Land shall be no more than 7.00 % of the total area of the Granted Land, i.e. no more than 60,541.95 square meters, and the gross floor area shall be no more than 121,083.90 square meters. The Grantee agrees not to construct complete residential houses, building for experts, hotels, motels, training centers or other non-production facilities within the Granted Land; the Grantee shall not construct any buildings similar to villas on industrial land with the floor area per building being 150-500 square meters and that are not connected with any other buildings or are only connected with another building of the same type.

 

	
Article 18
	
The Grantee agrees to commence the construction project on the Granted Land within 6 months after delivery (i.e before June 12th 2019), complete the construction within 30 months after delivery (i.e. before June 12th 2021) and begin production within 36 months after delivery (i.e before December 12th 2021). Special projects will be regulated by special clauses.

 

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If the Grantee fails to commence the construction as scheduled, the Grantee shall apply to the Grantor for extension of commencement 30 days in advance. If the extension is approved by the Grantor, the completion date of the project may be extended accordingly, but the extension of commencement shall not exceed 3 months.

 

If the Grantee fails to complete the construction as scheduled, the Grantee shall apply to the Grantor for the delay of completion 30 days in advance. Upon the Grantor’s approval, the extension shall not exceed 3 months.

 

	
Article 19
	
The Grantee agrees that the total investment of fixed assets on the Granted Land shall be no less than the approved or filed amount of RMB fourteen billion seventy-five million and nine hundred and thirty thousand (RMB 14,075.93 million), with investment per square meter no less than RMB sixteen thousand two hundred and sixty-six (RMB 16,266.00). The total investment of fixed assets for the construction project on the Granted Land includes the construction of buildings, fixtures and facilities attached to them, investment of equipment, Grant Fees and etc.

 

	
Article 20
	
The Grantee agrees that within 5 years after the land delivery (i.e. before December 12th 2023, the incomes of the construction project on the Granted Land for sales reaching target production will be no less than RMB seventy-five billion (RMB 75,000 million) per year and the total taxes for reaching target production will be no less than RMB two billion and two hundred and thirty million (RMB 2230 million) per year, with annual taxes per square meter no less than RMB two thousand and five hundred (RMB 2,500).

 

	
Article 21
	
During the construction by the Grantee on the Granted Land under this Contract, the facilities of water and gas use and treatment of sewage, as well as the main lines outside of the Granted Land and the connection facilities of transformer stations shall be subject to relevant regulations.

 

The Grantee agrees that the government is entitled to construct underground railways, tunnels, comprehensive trenches, underground roads, civil defense projects, underground pipes or pipelines that may enter, pass or go through the Granted Land for public utilities. In any case that the function of the Granted Land is affected thereby, the government or the public utility construction entity shall provide the Grantee with reasonable indemnifications.

 

	
Article 22
	
The Grantor shall not take back the Land Use Right lawfully obtained and utilized by the Grantee in accordance with this Contract before the expiration of the Land Use Term hereunder; unless otherwise agreed in this Contract. However, under special circumstances, if the Land Use Right needs to be taken back in advance for public interest, the Grantor shall apply for approval through legal procedures and shall provide the Grantee with indemnifications based on the residual value of the buildings, fixtures and facilities attached to them within the Granted Land and grant fees of the Land Use Right for the remaining land use term.

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Article 23
	
Upon completion of the construction project on the Granted Land, the Grantee shall make an application to the land administration authorities executing this Contract for inspection and verification of the land use situation with respect to the construction project under this Contract and the performance of this Contract. A certificate for the acceptance of completion shall be issued by the land administration authorities if project is inspected and verified as qualified for acceptance. Among which:

 

If the measured floor area for calculation of plot ratio exceeds the total amount agreed under this Contract, but within the scope of difference permitted by the planning approval, the completion shall be inspected and verified after the supplementary payment of grant fees for the exceeding area at the price of the Grant Fees agreed under this Contract.

 

If the measured gross floor area exceeds the scope of difference permitted by the planning approval, the completion shall be inspected and verified after the lawful dispose of the exceeding area in accordance with the procedures of investigation and punishment against illegal construction. The supplementary payment of grant fees for the illegal area shall be made at the higher price between the price agreed in this Contract and the market price appraised at the time of supplementary payment for the entire exceeding area (including that within the scope of difference permitted by the planning approval) and decided collectively by the Grantor.

 

	
Article 24
	
The Grantee shall collect and submit the reconnaissance report of geotechnical engineering, perform the obligation of preventing geological disasters, and protect the land subsidence monitoring and prevention facilities and shallow geothermal energy monitoring facilities distributed within the Granted Land.

 

	
Article 25
	
The Grantee shall collect and organize the profiles of the completion of construction project on the Granted Land and submit them to the administration department of urban construction profiles of municipal or district (county) level in accordance with relevant regulations.

 

 

Chapter IVTransfer, Lease and Mortgage of the Land Use Right

 

	
Article 26
	
The Land Use Right under this Contract shall not be transferred in its entirety or partly. 

 

The buildings within the Granted Land shall not be transferred per building, per floor or per room.

 

The changes of the structure of land user’s capital contribution and of shareholding structure of the Target Company shall be subject to prior consent of the Grantor.

 

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Article 27
	
The overall transfer of the land and buildings under this Contract shall be subject to provisions of the following Item (2) of this Article:

	
 
	
(1)
	
The application of transfer shall be made to the Grantor and the transfer shall be conducted upon consent of the Grantor and in accordance with relevant laws and regulations;

	
 
	
(2)
	
The Grantor or the park management authorities shall have the priority purchase right.

 

The overall transfer of land and buildings shall be conducted in the municipal unified market of land transactions.

 

	
Article 28
	
The Land Use Right under this Contract shall be mortgaged in its entirety when any mortgage is established thereon. The principle claims guaranteed by the mortgage shall be limited to the bank loan for the development and construction of the Granted Land and shall not exceed the overall Grant Fees agreed in this Contract.

 

The circumstances where the buildings under construction or the newly-constructed buildings as well as land are mortgaged shall be regulated by the Measures of Real Estate Mortgage in the Shanghai Municipality.

 

	
Article 29
	
The realization of the mortgage on the Granted Land shall be subject to provisions of the following Item (2) of this Article:

	
 
	
(1)
	
The qualification of the collateral purchaser shall be comprehensively identified by the planning and land resource administration authorities, the industrial administration authorities and the park management authorities, and shall comply with the requirements of industrial orientation and park planning;

	
 
	
(2)
	
The Grantor or the park management authorities shall have priority purchase rights over the Land Use Right.

 

Chapter VExpiration of Land Use Term

 

	
Article 30
	
Unless the Granted Land needs to be taken back for public interest, when the term of land use hereof (“Land Use Term”) expires and the Grantee needs to continue to use the Granted Land, the Grantee shall submit an application of extension to the Grantor no later than 1 year prior to the expiration of Land Use Term. 

 

Prior to the application of extension, the Grantee shall submit an application to the Shanghai Lingang Area Development Administration for comprehensive assessment. If the Shanghai Lingang Area Development Administration confirms that the relevant standards have been satisfied, the Grantor shall approve the application of extension.

 

If the Grantor agrees to extend the Land Use Term, the Grantee shall complete procedures of land use including those with respect to grant or lease pursuant 

9

 

to the laws, re-sign the contract of grant, lease or other land use contracts and pay the land use fees such as the grant fees and rents.

 

	
Article 31
	
Upon expiration of the Land Use Term, if the application for extension is not approved due to failure to satisfy relevant standards after the comprehensive assessment or due to public interest, this Contract shall be terminated and the Grantor is entitled to take back the land use right without consideration. The Grantee shall complete the deregistration process of the Land Use Right in accordance with relevant regulations and return the Certificate of State-owned Land Use Right. 

 

The Grantor and the Grantee agree to dispose of the buildings, fixtures and facilities attached to them within the Granted Land according to section (1) below:

	
 
	
(1)
	
The Grantor shall take back the buildings, fixtures and auxiliary facilities on the land area and provide the Grantee with corresponding compensation according to the residual value of the buildings, fixtures and auxiliary facilities when they are taken back.

	
 
	
(2)
	
The Grantor shall take back the buildings, fixtures and auxiliary facilities without consideration.

	
 
	
(3)
	
The Grantee shall remove or demolish the buildings, fixtures and auxiliary facilities, and restore the land to level ground.

 

	
Article 32
	
Upon expiration of the Land Use Term, if no application of extension has been made, this Contract shall be terminated. The Grantor shall take back the Land Use Right without consideration. The Grantee shall complete the deregistration process of the Land Use Right pursuant to relevant regulations and return the Certificate of State-owned Land Use Right.

 

The Grantor shall take back the buildings, fixtures and facilities attached to them within the Granted Land without consideration. The land user shall maintain the normal utility functions of the buildings, fixtures and facilities attached to them above the ground without any intended damage. If the buildings, fixtures and facilities attached to them above the ground lose any of their normal utility functions, the Grantor may require the land user to move or demolish such buildings, fixtures and facilities attached to them above the ground and to clear the land.

 

 

Chapter VIForce Majeure

 

	
Article 33
	
Either Party to this Contract who is unable to fully or partially perform this Contract due to Force Majeure may be exempted from liability but shall, as conditions permit, adopt all necessary remedial measures to mitigate the losses caused by Force Majeure. Any Force Majeure occurs during the period of delayed performance by one Party shall not exempt such Party from liability.

 

	
Article 34
	
The Party encountering with Force Majeure shall notify the other Party in writing by letters, telegraphs or fax within 7 days and provide the other Party with the 

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report and proof of its failure of or delay in performance of all or part of this Contract within 15 days after occurrence of Force Majeure.

 

 

Chapter VIILiability for Breach of Contract

 

	
Article 35
	
The Grantee shall pay the land Premium as scheduled according to this Contract. If the Grantee fails to pay the Premium on time, it shall pay 1.00‰ of the due amount as liquidated damages on a daily basis starting from the date of delay. If the Grantee delays the payment for more than 60 days, and still fails to pay the Premium after demanding notice by the Grantor, the Grantor is entitled to terminate this Contract. In such case, the Grantee shall have no right to request for refund of the deposit and meanwhile the Grantor may claim against the Grantee for losses.

 

	
Article 36
	
The Grantee shall pay the deposit for timely performance (or submit in the form of letter of guarantee) as scheduled in this Contract. If the Grantee fails to timely pay the deposit for timely performance in full amount and delays the payment for more than 60 days, and still fails to pay the deposit for timely performance after demanding notice by the Grantor, the Grantor is entitled to terminate this Contract. In such case, the Grantee shall have no right to request for refund of the deposit and meanwhile the Grantor may claim against the Grantee for losses.

 

	
Article 37
	
If the Grantee terminates the investment and construction of the project under this Contract due to its own reasons and submits to the Grantor to terminate this Contract and to take back the land no less than 30 days prior to the agreed commencement of construction date, such case shall be handled under the following provisions upon Grantor’s approval: the Grantor shall refund the Premium in full amount except for the deposit to the Grantee, take back the land use right, and refund the deposit for timely performance and relevant bank interests in full amount to the Grantee.

 

	
Article 38
	
The Grantee agrees to be subject to the time management of commencement of project construction under this Contract and perform according to section (1) of this Article:

	
 
	
(1)
	
If the Grantee fails to commence the construction pursuant to the date agreed under this Contract or any extended commencement of instruction date approved by the Grantor, the Grantee shall pay 50% of the deposit for timely commencement of instruction as liquidated damages; if the Grantee delays the commencement for more than 6 months, it shall pay the total deposit for timely commencement of instruction as liquidated damages. If the delay is more than one year, the Grantor is entitled to terminate this Contract and take back the land use right. In such case, the Grantor shall refund the Premium for the remaining term of land use deducting the deposit agreed under this Contract, and refund the deposits for timely completion of instruction and timely commencement of production and their relevant bank interests in full amount to the Grantee.

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(2)
	
If the Grantee fails to commence the construction pursuant to the date agreed under this Contract or any extended commencement of instruction date approved by the Grantor, the Grantee shall pay  \  ‰ of the total land Premium as liquidated damages for each day of delay and the Grantor is entitled to require the Grantee to continue to perform under this Contract. If the Grantee delays the commencement of instruction for more than one year, the Grantor is entitled to terminate this Contract, take back the land use right. In such case, the Grantor shall refund the land Premium for the remaining term of land use deducting the deposit agreed under this Contract to the Grantee.

 

	
Article 39
	
The Grantee agrees to be subject to the time management of completion of project construction under this Contract and perform according to section (1) of this Article:

	
 
	
(1)
	
If the Grantee fails to complete the construction pursuant to the date agreed under this Contract or any extended completion of instruction date approved by the Grantor, the Grantee shall pay 50% of the deposit for timely completion of construction as liquidated damages; if the Grantee delays the completion for more than 6 months, it shall pay the total deposit for timely completion of construction as liquidated damages. If the delay is more than one year, the Grantor is entitled to terminate this Contract and take back the land use right. In such case, the Grantor shall refund the Premium for the remaining term of land use deducting the deposit agreed under this Contract and refund the deposit for timely commencement of production and relevant bank interests in full amount to the Grantee.

	
 
	
(2)
	
If the Grantee fails to complete the construction pursuant to the date agreed under this Contract or any extended completion of instruction date approved by the Grantor, the Grantee shall pay  \  ‰ of the total land Premium as liquidated damages for each day of delay. If the Grantee delays the completion of instruction for more than one year, the Grantor is entitled to terminate this Contract, take back the land use right. In such case, the Grantor shall refund the land Premium for the remaining term of land use deducting the deposit agreed under this Contract to the Grantee.

 

If the Grantee delays the completion of the project construction for more than one year, leading to the termination of this Contract by the Grantor, the Grantor and Grantee agree to dispose of the buildings, fixtures and auxiliary facilities within the scope of the land under this Contract according to section (1) below: 

	
 
	
(1)
	
The Grantor shall take back the buildings, fixtures and auxiliary facilities on the land area and provide the Grantee with corresponding compensation according to the residual value of the buildings, fixtures and auxiliary facilities when they are taken back.

	
 
	
(2)
	
The Grantor shall take back the buildings, fixtures and auxiliary facilities without consideration. 

	
 
	
(3)
	
The Grantee shall remove or demolish the buildings, fixtures and auxiliary facilities, and restore the land to level ground.

 

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Article 40
	
If the Grantee fails to commence production as agreed under this Contract, the Grantee shall pay the total deposit for timely commencement of production as liquidated damages. The Shanghai Lingang Area Development and Construction Management Committee and the Grantee shall stipulate a new commencement of production date, and the extension shall be no longer than 6 months after the previously agreed commencement of production date, that is before June 22nd 2022. If the Shanghai Lingang Area Development and Construction Management Committee determines that the Grantee fails to commence production pursuant to the extended commencement of production date, the Grantor is entitled to terminate this Contract, take back the land use right. In such case, the Grantor shall refund the land Premium for the remaining term of land use deducting the deposit agreed under this Contract. 

 

If the Grantee fails to commence production pursuant to the extended commencement of production date, leading to the termination of this Contract by the Grantor, the Grantor and Grantee agree to dispose of the buildings, fixtures and auxiliary facilities within the scope of the land under this Contract according to section (1) below:

	
 
	
(1)
	
The Grantor shall take back the buildings, fixtures and auxiliary facilities on the land area and provide the Grantee with corresponding compensation according to the residual value of the buildings, fixtures and auxiliary facilities when they are taken back.

	
 
	
(2)
	
The Grantor shall take back the buildings, fixtures and auxiliary facilities without consideration.

	
 
	
(3)
	
The Grantee shall remove or demolish the buildings, fixtures and auxiliary facilities, and restore the land to level ground.

 

	
Article 41
	
After the commencement of production of the project under this Contract, upon confirmation of the Shanghai Lingang Area Development and Construction Management Committee, if the total investment of fixed assets and the investment fails to reach the standards agreed under this Contract, the Grantee shall continue to perform under this Contract as well as pay the liquidated damages equal to the same proportion of the Premium as the proportion of the actual shortfall amount of investment in the total agreed investment amount or the investment intensity.

 

	
Article 42
	
Within one month after the date of reaching target production under this Contract, the Shanghai Lingang Area Development and Construction Management Committee shall determine on the reaching of target production by the project.

 

If the total tax revenue of the project fails to reach but is no less than 80% of the standard agreed under this Contract, the Grantee shall pay 20% of the actual shortfall amount of the tax revenue as liquidated damages. The Grantee shall be deemed as having fulfilled this article upon payment of liquidated damages.

 

	
Article 43
	
If the Grantee submits to the Grantor to take back the land use right after reaching target product due to the Grantee’s own reasons, such case shall be handled under the following provisions upon the Grantor’s approval: the Grantor 

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shall terminate this Contract, take back the land use right and refund the land Premium for the remaining term of land use to the Grantee. The Grantor and the Grantee agree to administer with the buildings, fixtures and auxiliary facilities within the scope of the land under this Contract according to section (1) of this Article:

	
 
	
(1)
	
The Grantor shall take back the buildings, fixtures and auxiliary facilities on the land area and provide the Grantee with corresponding compensation according to the residual value of the buildings, fixtures and auxiliary facilities when they are taken back.

	
 
	
(2)
	
The Grantor shall take back the buildings, fixtures and auxiliary facilities without consideration.

	
 
	
(3)
	
The Grantee shall remove or demolish the buildings, fixtures and auxiliary facilities, and restore the land to level ground.

 

	
Article 44
	
If any of the plot ratio, building density or other indicators hereunder is lower than the agreed minimum standards of this Contract, the Grantor may require the Grantee to continue to perform under this Contract as well as pay the liquidated damages, equal to the same proportion of the Premium as the difference between the actual amount and the agreed minimum standards. If any of the plot ratio, building density or other indicators of the land hereunder exceeds the agreed maximum standards of this Contract, the Grantor has the right to take back the exceeding area and may require the Grantee to pay liquidated damages equals to the same proportion of the Premium of the exceeding portion in comparison to the agreed maximum standards.

 

	
Article 45
	
If the ratio of land for the enterprise’s internal administrative offices and the residential services facilities, or the floor area of the enterprise’s internal administrative offices and the residential services facilities, exceeds the standards agreed under this Contract, the Grantee shall pay 5.00 ‰ of the total land Premium to the Grantor as liquidated damages, and demolish relevant construction facilities at its own cost.

 

	
Article 46
	
If the Grantee pays the Premium on schedule pursuant to this Contract, the Grantor must timely deliver the granted land to the Grantee according to this Contract. If the Grantor fails to deliver the land on time and delays the Grantee’s procession of the land, the Grantor shall pay 1.00 ‰ of the Premium paid by the Grantee as the liquidated damages to the Grantee for each day of delay. In such case, the land use term shall start to calculate from the actual delivery date. If the Grantor delays the delivery of the land for more than 60 days, and still fails to deliver the land after demanding notice by the Grantee, the Grantee is entitled to terminate this Contract. In such case, the Grantor shall refund twice the amount of the deposit under this Contract and the remaining amount of any paid Premium to the Grantee. The Grantee may also claim against the Grantor for losses.

 

	
Article 47
	
If the Grantor fails to deliver the land or reach the land conditions as agreed under this Contract or unilaterally changes the usage conditions of the land, the Grantee is entitled to require the Grantor to perform the obligations according to 

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the agreed conditions under this Contract and compensate the Grantee’s direct losses caused by the Grantor’s delay in performance. The land use term shall be start to calculate from the date of fulfillment of the agreed land conditions under this Contract. 

 

	
Article 48
	
If any of the following circumstances occur during the use of the land under this Contract by the Grantee, the Grantor is entitled to terminate this Contract, take back the land use right. In such case, the Grantor shall refund the land Premium for the remaining term of land use to the Grantee:

	
 
	
(1)
	
In violation of Article 42 of this Contract, the total tax revenue of the project fails to reach 80% of the standard agreed under this Contract within 1 month after the agreed date of reaching target production, as determined by the Shanghai Lingang Area Development and Construction Management Committee.

	
 
	
(2)
	
The Shanghai Lingang Area Development and Construction Management Committee determines that the industry product within the granted land fails to meet relevant standards upon a comprehensive assessment for every five years from the third year after the agreed date of reaching target production;

	
 
	
(3)
	
The Grantee transfers or mortgages the land or changes the investment ratio structure of the land user or the project company’s shareholding structure in violation of PRC laws, regulations and Chapter IV of this Contract.

 

If the Grantee breaches this article, leading to the termination of this Contract by the Grantor, the Grantor and Grantee agree to administer with the buildings, fixtures and auxiliary facilities within the scope of the land under this Contract according to section (1) below:

	
 
	
(1)
	
The Grantor shall take back the buildings, fixtures and auxiliary facilities on the land area and provide the Grantee with corresponding compensation according to the residual value of the buildings, fixtures and auxiliary facilities when they are taken back.

	
 
	
(2)
	
The Grantor shall take back the buildings, fixtures and auxiliary facilities without consideration.

	
 
	
(3)
	
The Grantee shall remove or demolish the buildings, fixtures and auxiliary facilities, and restore the land to level ground.

 

	
Article 49
	
If the Grantee hereunder violates the articles of this Contract and changes the usage of the land without approval, and if the violation is severe and the Grantee fails to correct such violation within required time, the Grantor is entitled to terminate this Contract and take back the land use right without consideration. The Grantor and Grantee agree to administer with the buildings, fixtures and auxiliary facilities within the scope of the land under this Contract according to section (1) of this Article:

	
 
	
(1)
	
The Grantor shall take back the buildings, fixtures and auxiliary facilities on the land area and provide the Grantee with corresponding compensation according to the residual value of the buildings, fixtures and auxiliary facilities when they are taken back.

15

 

	
 
	
(2)
	
The Grantor shall take back the buildings, fixtures and auxiliary facilities without consideration.

	
 
	
(3)
	
The Grantee shall remove or demolish the buildings, fixtures and auxiliary facilities, and restore the land to level ground.

 

	
Article 50
	
Upon confirmation of the Environmental Protection Administration, if the use of land under this Contract causes serious environmental pollution, the Grantor is entitled to terminate this Contract, take back the land use right and require the Grantee to pay all the costs for recovering the geological environment of the soil and underground water. The Grantor and Grantee agree to administer with the buildings, fixtures and auxiliary facilities within the scope of the land under this Contract according to section (1) of this Article:

	
 
	
(1)
	
The Grantor shall take back the buildings, fixtures and auxiliary facilities on the land area and provide the Grantee with corresponding compensation according to the residual value of the buildings, fixtures and auxiliary facilities when they are taken back.

	
 
	
(2)
	
The Grantor shall take back the buildings, fixtures and auxiliary facilities without consideration.

	
 
	
(3)
	
The Grantee shall remove or demolish the buildings, fixtures and auxiliary facilities, and restore the land to level ground.

 

 

Chapter VIIIApplicable Law and Disputes Resolution

 

	
Article 51
	
The formation, validity, interpretation, performance and dispute resolution of this Contract shall be governed by PRC laws and Shanghai municipal regulations and rules. Disputes arising out of the performance of this Contract shall be resolved through negotiation between Party A and Party B; if the dispute cannot be resolved through negotiation, it shall be resolved in accordance with section (2) of this Article:

	
 
	
(1)
	
Applying for arbitration to      \      ;  

	
 
	
(2)
	
Filing a lawsuit to the People’s Court of PRC; or

	
 
	
(3)
	
Other methods (as specifically agreed in Special agreements)

 

	
Article 52
	
Special agreements:

	
 
	
1.
	
If the Grantee violates relevant provisions of the granting documents during the granting activities of the land under this Contract and the Grantor decides to cancel the qualification obtained by the Grantee, the Grantor is entitled to terminate this Contract, take back the land use right and in such case, the Grantor shall refund the land Premium for the remaining term of land use deducting the deposit as agreed under this Contract. If the Grantee violates relevant provisions of the granting documents during the granting activities of the land under this Contract and the Grantor terminates this Contract, the Grantor and the Grantee agree that the Grantor shall take back the buildings, fixtures and auxiliary facilities on the land area and provide the Grantee with corresponding compensation according to the residual value of the buildings, fixtures and auxiliary facilities when they are taken back.

16

 

	
 
	
2.
	
This section shall prevail over Article 17 of this Contract: the Grantee agrees that according to the land use planning conditions set out by the planning authorities, the area for the enterprise’s internal administrative offices and the residential service facilities within the Granted Land under this Contract shall not exceed 7% of the total Granted Land, i.e. no more than 60541.95 square meters, and the floor area shall not exceed 7% of the total floor area of the Granted Land, i.e. no more than 121083.90 square meters. The Grantee agrees not to construct sets of residential buildings, buildings for experts, hotels, motels, training center, or other non-production facilities within the Granted Land; the Grantee shall not construct any single building with floor area of 150-500 square meters, which is not connected with any other buildings or only connected with other building(s) by one side wall, similar to a villa, on industrial land.

	
 
	
3.
	
The floor area for plot ratio calculation of this land shall be no more than 1729770.00 square meters.

 

Chapter IXMiscellaneous

 

	
Article 53
	
The proposal for granting the land use right under this Contract has been approved by the People’s Government of Shanghai. This Contract shall take into effect as of the execution date by both Parties.

 

	
Article 54
	
The Parties to this Contract guarantee the authenticity of the names, addresses, phone numbers, faxes, account opening banks, agents and other contents filled in under this Contract. If either party fails to give written notice to the other party of any change of the aforesaid information within 15 days after such change, it shall assume the liability arising therefrom.

 

	
Article 55
	
This Contract and the attachments include 18 pages in total and the Chinese version shall prevail.

 

	
Article 56
	
Amounts, prices, areas and other items in this Contract are written in Arabic numbers and Chinese characters simultaneously and in case of inconsistency, the Chinese characters shall prevail.

 

	
Article 57
	
Issues not included in this Contract may be negotiated by the Parties and any further agreement achieved therefrom may be attached to this Contract as attachments, with equal legal effect as this Contract.

 

	
Article 58
	
This Contract shall be executed in four originals with the same effect and each of the Grantor and the Grantee shall hold two originals.

 

 

 

 

 

 

 

17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	
Grantor (seal): [***]
	
Grantee (seal): [***]

 

	
Legal Representative (Proxy): [***]
	
Legal Representative (Proxy): [***]

 

	
(Signature):
	
[***](Signature): [***]

 

	

	
 

 

 

 

18

 

Attachment I:

The Plane Boundary Map of the Granted Land

The Outcome Form of Boundary Point Coordinates

Table 11-1

	
Point No.
	
Distance (M)
	
Vertical Coordinate(X)
	
Horizontal Coordinate(Y)
	
Radius
	
Boundary Mark Material
	
Boundary Point Type
	
Notes

	
1
	
115.52
	
-39411.718
	
28773.497
	
 
	
 
	
Analytic
	
Construction Land

	
2
	
-39299.611
	
28801.37
	
 
	
Analytic
	
Construction Land

	
12.72
	
 

	
3
	
-39287.363
	
28804.808
	
 
	
Analytic
	
Construction Land

	
34.45
	
450.0

	
4
	
-39293.053
	
28838.779
	
 
	
Analytic
	
Construction Land

	
264.91
	
 

	
5
	
-39445.191
	
29055.644
	
 
	
Analytic
	
Construction Land

	
159.34
	
 

	
6
	
-39484.819
	
29209.973
	
 
	
Analytic
	
Construction Land

	
600.68
	
13920.0

	
7
	
-40085.299
	
29196.222
	
 
	
Analytic
	
Construction Land

	
42.92
	
 

	
8
	
-40128.18
	
29194.314
	
 
	
Analytic
	
Construction Land

	
35.74
	
 

	
9
	
-40163.89
	
29192.725
	
 
	
Analytic
	
Construction Land

	
40.85
	
 

	
10
	
-40204.701
	
29190.909
	
 
	
Analytic
	
Construction Land

	
353.72
	
 

	
11
	
-40558.072
	
29175.183
	
 
	
Analytic
	
Construction Land

	
202.34
	
-8080.0

	
12
	
-40760.304
	
29168.72
	
 
	
Analytic
	
Construction Land

	
4.89
	
 

	
13
	
-40762.261
	
29164.235
	
 
	
Analytic
	
Construction Land

	
57.98
	
 

	
14
	
-40788.639
	
29112.6
	
 
	
Analytic
	
Construction Land

	
88.98
	
 

	
15
	
-40831.449
	
29034.597
	
 
	
Analytic
	
Construction Land

	
57.13
	
 

	
16
	
-40860.622
	
28985.475
	
 
	
Analytic
	
Construction Land

	
46.72
	
90.0

	
17
	
-40873.227
	
28941.031
	
 
	
Analytic
	
Construction Land

	
72.15
	
 

	
18
	
-40874.379
	
28868.891
	
 
	
Analytic
	
Construction Land

	
16.0
	
 

	
19
	
-40874.379
	
28852.886
	
 
	
Analytic
	
Construction Land

	
24.26
	
 

	
20
	
-40874.258
	
28828.628
	
 
	
Analytic
	
Construction Land

	
207.64
	
 

	
21
	
-40873.524
	
28620.994
	
 
	
Analytic
	
Construction Land

	
21.23
	
 

	
22
	
-40871.78
	
28599.839
	
 
	
Analytic
	
Construction Land

Calculator: Sun LiInspector: Yao Qing

 

 

 

19

 

Attachment II:

The Vertical Boundary Description of the Granted Land

The Outcome Form of Boundary Point Coordinates

Table 11-2

	
Point No.
	
Distance (M)
	
Vertical Coordinate(X)
	
Horizontal Coordinate(Y)
	
Radius
	
Boundary Mark Material
	
Boundary Point Type
	
Notes

	
23
	
38.57
	
-40867.459
	
28574.705
	
 
	
 
	
Analytic
	
Construction Land

	
24
	
-40866.654
	
28537.68
	
 
	
Analytic
	
Construction Land

	
89.36
	
 

	
25
	
-40836.373
	
28450.653
	
 
	
Analytic
	
Construction Land

	
47.57
	
30.0

	
26
	
-40799.917
	
28428.348
	
 
	
Analytic
	
Construction Land

	
394.36
	
 

	
27
	
-40417.208
	
28523.501
	
 
	
Analytic
	
Construction Land

	
19.85
	
 

	
28
	
-40397.944
	
28528.291
	
 
	
Analytic
	
Construction Land

	
28.0
	
 

	
29
	
-40370.771
	
28535.047
	
 
	
Analytic
	
Construction Land

	
342.7
	
 

	
30
	
-40038.197
	
28617.735
	
 
	
Analytic
	
Construction Land

	
19.88
	
 

	
31
	
-40018.901
	
28622.532
	
 
	
Analytic
	
Construction Land

	
35.0
	
 

	
32
	
-39984.934
	
28630.978
	
 
	
Analytic
	
Construction Land

	
330.98
	
 

	
33
	
-39663.738
	
28710.837
	
 
	
Analytic
	
Construction Land

	
19.87
	
 

	
34
	
-39644.453
	
28715.632
	
 
	
Analytic
	
Construction Land

	
8.95
	
 

	
35
	
-39635.767
	
28717.791
	
 
	
Analytic
	
Construction Land

	
16.7
	
 

	
36
	
-39634
	
28734.4
	
 
	
Analytic
	
Construction Land

	
3.35
	
 

	
37
	
-39489.08
	
28737.728
	
 
	
Analytic
	
Construction Land

	
147.92
	
 

	
38
	
-39489.08
	
28765.65
	
 
	
Analytic
	
Construction Land

	
77.76
	
 

	
1
	
-39411.718
	
28733.497
	
 
	
Analytic
	
Construction Land

	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

Calculator: Sun LiInspector: Yao Qing

 

 

 

20

 

 

 

The Outline Map of Land Scope

 

21

 

 

Shanghai State-owned Construction Land Use Right (Industrial Land Industry Project)

 

Consulting Form for Bid, Auction and Listing of the Granted Land

 

(Planning Part)

 

 

Consulting Unit: Approval Office of Shanghai Lingang Area Development Administration 

No.: Hu Lin Gang Zhao Pai Gua Zheng (2018) No. 8

 

	
Plot name
	
Plot Q01-05, Unit 04PD-0303, Lingang Heavy Equipment Industrial Zone 

	
Boundaries of the Plot (East to)
	
the reserved control line for the East China Sea Bridge II under planning
	
Boundaries of the Plot (South to)
	
People’s Pond (Renmintang)

	
Boundaries of the Plot (West to)
	
Pudong Border River
	
Boundaries of the Plot (North to)
	
Lianggang Ave. (Laolitang)

	
Gross Area
	
About 864,885 sq.m
	
Granted Area
	
About 864,885 sq.m

	
Attachment
	
□Survey Report regarding Housing and Land Ownership

	
Consulting Unit Contact person
	
Shanliang Shen
	
Contact No.
	
68283261

	
Consulting Items

	
Plot location*
	
Q01 block street, Phase II, Heavy Equipment Industrial Zone, Nicheng town, Nanhui New Town, Pudong New Area

	
Elevation system
	
Shanghai Wusong
	
Plotting scale
	
[not filled]

	
Vertical height limit
	
Up bound: [not filled]

Low bound: [not filled]
	
Elevation difference
	
[not filled]

	
Above-ground Part

	
Plot usage*
	
Category II of Industry  
	
Ratio of each land usage to total land use
	
[not filled]

	
Plot ratio*
	
Upper limit: 2.0

Lower limit: 1.2 (alternatively, doubling the floor area of a building over 8 meters in height )

22

 

 

	
Greening rate*
	
Upper limit: subject to approval by administrative departments of greening

Lower limit: 10%
	
Intensive greening rate*
	
Upper limit: -[not filled]

Lower limit: -[not filled]

	
Property of main building*
	
Industrial factory
	
Property of ancillary building*
	
Ancillary structure

	
Above-ground built-up area*
	
Subject to approved design proposal
	
Gross built-up area*
	
Subject to approved design proposal

	
Building height limit*
	
30 meters
	
Building breadth limit*
	
-[not filled]

	
Floor height*
	
In compliance with architecture functional requirements and professional design regulations
	
Building interval and daylight requirements
	
For non-residential buildings, Shanghai Urban Planning Management Technology Regulation shall implement, and the buildings shall also comply with related fire regulations.

	
Building density*
	
Upper: [not filled]

Lower: [not filled]
	
Enter & exit setting*
	
Shanghai Urban Planning Management Technology Regulation shall implement and the setting shall be subject to the opinions of traffic police.

	
Above-ground parking lots*
	
In compliance with the Shanghai Construction Transportation Design and Parking Lot (Space) Setting Standard and requirements of related administrative departments.
	
Ground standard altitude*
	
The suggested standard is equal to the Wusong standard altitude plus 4.2 meters.

23

 

 

	
Required distance to the redline in city planning*
	
For non-residential buildings,  Shanghai Urban Planning Management Technology Regulation shall implement.
	
Required distance to the boundary line*
	
For non-residential buildings, Shanghai Urban Planning Management Technology Regulation shall implement.

	
Required distance to the blue line in city planning 
	
-[not filled]
	
Required distance to the green line in city planning
	
No less than 10 meters from the Renmin Pond green line, and Shanghai Urban Planning Management Technology Regulation shall implement in any other aspects regarding such distance. The building should also stay away from the controlled land area of river channel in planning.

	
Building volume
	
-[not filled]

	
Building color and material*
	
-[not filled]

	
Architecture style*
	
-[not filled]

	
Landscape*
	
-[not filled]

	
Region Style*
	
-[not filled]

	
Other supporting municipal facilities*
	
-[not filled]

	
Other supporting public facilities*
	
-[not filled]

	
Vertical design requirements*
	
-[not filled]

	
Is there any existing conservational building in compliance with current planning in the area*
	
□ Yes (attach form)
	
√ No

24

 

 

	
Commercial Land

	
Lower limit sets of Apartment*
	
-[not filled]

	
Industrial Land

	
Rate of Administration office & social amenity (≤7%)*
	
7

	
Under-ground part

	
Property of underground construction land planning
	
-[not filled]
	
Maximum ground area occupied by horizontal projection of underground building (structure) 
	
-[not filled]

	
Start-stop depth
	
-[not filled]
	
Gross underground land use area
	
-[not filled]

	
Gross underground build-up area
	
- [not filled] sq.m, among which

Commercial area: - [not filled] sq.m

Office area: - [not filled] sq.m

Parking lot area: - [not filled] sq.m

Industrial area: - [not filled] sq.m

Storage area: -[not filled] sq.m

	
Underground parking lots*
	
-[not filled]
	
Basement connection requirements*
	
-[not filled]

25

 

 

	
Other planning management requirements
	
(1)The greening control area which is 10 meters from the Renmin Pond green line in the base area should be guaranteed for preservation and greening. Any fence wall should be see-through and green-through, the foundation of such fence wall should be inside the boundaries of the base area.

(2)Construction projects such as those applying glass walls should be in compliance with relevant requirements under Shanghai Constructional Glass Wall Administration Regulation, and the form of the glass walls should be identified and marked in the constructional design plan submitted for approval.

(3)Any administrative requirements involving environmental protection, health, fire safety, traffic police, traffic and transportation, sanitation, water management, greening, “smart water city”, civil defense and safe production should 

be subject to opinions of relevant departments before taking actions.

	
Initial comments*
	
√ agree  □ disagree

	
Remarks
	
Plan to review and approve application in the absence of a proposal

	
Consulting Unit*
	
Approval Office of Shanghai Lingang Area Development Administration 

(stamp)

	
Consulting Unit contact person*
	
Xiaoyan Hong
	
Contact No.*
	
68283890

 

26

 

 

 

Attachment III:

 

Planning Conditions of the Granted Land Approved by the Planning Administration Department

27

 

 

Attachment IV:

 

Content to be included in the Remarks of Real Estate Title Certificate

 

	
 
	
1.
	
The Grantor ‘s approval is required when the Grantee transfers the land;

	
 
	
2.
	
The real estate property can only be mortgaged as a whole, any partition mortgage is not allowed;

	
 
	
3.
	
Ratio of investment contribution: Tesla (Shanghai) Co., Ltd, 100%.

 

 

Equity structure:

 

Actual controller: 

 

 

To change any of the above remarks, the Grantor’s written consent is required. 

 

28

 

 

 

 

 

 

Shanghai Lingang Area Development Administration Document

Hu Lin Di Guan Wei Jing [2018] No. 71

 

Confirmation Letter of Shanghai Lingang Area Development Administration on the Transfer of Unit 04PD-0303 Plot Q01-05 with Industrial Project in Lingang Heavy Equipment Industrial Zone

 

 

Shanghai Planning and Land Resources Administration Bureau:

 

According to the Memorandum of Cooperation between the Shanghai Municipal People's Government and Tesla (Shanghai) Co., Ltd. signed on July 10, 2018 and the Investment Agreement, it is hereby confirmed that Tesla (Shanghai) Co., Ltd. will participate in the transfer of the Unit 04PD-0303 Plot Q01-05 with industry project in Lingang Heavy Equipment Industrial Zone. The name of the construction project is: Tesla Shanghai Gigafactory Project (Phase I). The confirmation letter is valid for one year.

 

 

Shanghai Lingang Area Development Administration

 

August 7, 2018

 

[Stamp of Shanghai Lingang Area Development Administration]

 

Cc: Tesla (Shanghai) Co., Ltd.

By Office of Shanghai Lingang Area Development Administration, printed and issued on August 7, 2018 (4 copies were printed in total)

 

 

 

 

29

 

 

Basic Information Form of the Project

 

	
Project #
	
LG003-18

	
Basics of the plot
	
*Plot name
	
Plot Q01-05, Unit 04PD-0303, Lingang Heavy Equipment Industrial Zone 

	
*Boundaries of the Plot
	
North to Lianggang Ave. (Laolitang), south to People’s Pond (Renmintang), west to Pudong-Fengxian Border River, east to the reserved control line for the East China Sea Bridge II under planning. 

	
*Affiliation to industrial neighborhood
	
Lingang Industrial Zone
	
*Land area
	
864,885 sq.m

	
*Plot ratio 
	
Less than 2.0, subject to the approved proposal

	
*Building density
	
0.3 – 0.7

	
*Above-ground building area
	
350,000 – 550,000 sq.m 

30

 

 

	
Project facts

[Stamp of the Economic and Trade Office of the Shanghai Lingang Area Development Administration]
	
*Project name
	
Tesla Shanghai Gigafactory Project (Phase I)

	
*Minimum total investment in fixed assets 
	
RMB 14,000,000,000 
	
*Minimum investment intensity
	
10,850,000 yuan/mu (one mu equals to 666.666 sq.m)

	
*Sales revenue upon reaching target production
	
RMB 75,000,000,000/year
	
*Total tax revenue upon reaching target production
	
RMB 2,230,000,000/year

	
*Tax output intensity upon reaching target production
	
RMB 2,500 /year per sq.m
	
Minimum land output rate
	
RMB 57,800,000/mu 

	
Minimum sales output rate
	
RMB 57,800,000/year per mu
	
Minimum tax output rate
	
RMB 1,700,000/year per mu

	
Maximum output water consumption
	
Approximately 1.0 cubic meter/RMB 10,000, subject to the final proposal 
	
Maximum output energy consumption
	
Approximately 0.01 ton std. coal / RMB 10,000, subject to the final proposal. 

	
Minimum  employment 
	
0.08 persons / RMB one million of output value

	
*Commencement of construction time
	
6 months after delivery of land
	
*Completion of construction time
	
30 months after delivery of land

	
*Commencement of production time
	
36 months after delivery of land
	
*Reaching target production time
	
5 years after delivery of land

	
*Type of approved industry (in sub-categories)
	
3612 NEV manufacture
	
Environmental protection requirement
	
Compliant with environmental protection requirement

	
Lifecycle of the industry (suggested time limit for transfer)
	
50 years

	
Profile of the interested land user
	
*Business name
	
Tesla (Shanghai) Co., Ltd.

	
*Contact person
	
ZHU Xiaotong

	
Company add.
	
D203A, 168 Tonghui Rd, Xincheng Town, Nanhui, Pudong 201306

	
*Tel.
	
010-59057399
	
Fax 
	
010-59057003

	
Business nature
	
LLC (Wholly Owned HK/MO/TW Enterprise)
	
Registered capital
	
RMB 4,670,000,000

31

 

 

	
Business range
	
Engaged in the production, sales, maintenance and other after-sales services and technical development, technical services, technical consultation and technology transfer in the field of electric vehicles and parts, batteries, energy storage equipment and photovoltaic products; wholesale and commission agency (except auction) of products similar to the above-mentioned, import and export business, after-sales service, and provision of related supporting services; EV demonstration and product promotion; warehousing; training, 

consulting, research and development and technical services related to the above-mentioned business; enterprise management consulting, business information consultation, provision of internal financial advice for the corporation group.
	
Industry involved
	
3612 EV manufacturing

 

32

 

 

[Page break]

	
Regulatory requirements
	
This form is incorporated in the whole process of land supervision as an annexure to the Grant Contract for State-owned Construction Land Use Right. In case the building plot ratio and other indicators differ from this form after completion of the project, it will be handled as a breach of contract under the Grant Contract for State-owned Construction Land Use Right.

 

	
Good Faith Commitment
	
The company solemnly promises that the information filled in this form is true and valid, and agrees to use this form as an annexure to the “Grant Contract for State-owned Construction Land Use Right” and that the annexure has the same legal effect as the Grant Contract for State-owned Construction Land Use Right. We will strictly implement the above indicators during the project construction process. Any violation of this form and the indicators therein will be handled as a breach of contract under the Grant Contract for State-owned Construction Land Use Right.

	
Interested land user
	
Tesla (Shanghai) Co., Ltd.

	
Filled-in Date
	
 

[Stamp of Tesla (Shanghai) Co., Ltd.]

Notes:

1. This form is only applicable to the transfer of industrial land with industrial projects identified by district/county-level administration;

2. The project number consists of the initials of the district or county name (Chinese characters) + serial number (three digits) + the number of year: for example, Baoshan would look like BS001-12;

3. Every item with an asterisk “*” is required to be filled out;

4. The “Basic Information Form of the Project” shall be included in the Grant Contract for State-owned Construction Land Use Right.

33

 

 

Adjustment Instruction of Grant Contract for State-owned Construction Land Use Right

 

The number included in the brackets in the first page of this Contract is the version number of contract, which should be 1.0 when the contract is signed for the first time, and 2.0 when any supplemental contract is signed, and by parity of reasoning for any further amendment of the contract.

 

 

 

 

34tsla-ex103_198.htm

Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicate where omissions have been made.

Exhibit 10.3

Amended and Restated Factory Lease

This Amended and Restated Factory Lease (“Amended Lease” or “Lease”) is entered into effective as of January 1, 2017 (the “Amendment Effective Date”) by and between Tesla, Inc., a Delaware corporation located at 3500 Deer Creek Road, Palo Alto, California 94304 (“Tesla”), on the one hand, and Panasonic Energy of North America, a division of Panasonic Corporation of North America (“Tenant”), on the other hand, with reference to the General Terms and Conditions dated October 1, 2014 (as amended, the “General Terms”) and the Gigafactory Battery Cell Pricing Agreement dated January 1, 2014 (as amended, “Pricing Agreement”), each by and between Tesla, Panasonic Corporation (“Panasonic”) and Tenant.  Upon signature by all Parties, this Amended Lease shall supersede and replace in entirety the Factory Lease dated December 1, 2015 by and between the Parties (the “2015 Lease”) as of the Amendment Effective Date; provided, however, that any provisions related to termination of the 2015 Lease shall not apply in connection with such termination.  For avoidance of doubt, claims arising under the 2015 Lease shall continue to be governed by, and subject to, the 2015 Lease.  Terms used herein with initial capitalization have the meanings given where used, or in Section 13.19 hereof, in the General Terms, or in the Pricing Agreement.

Basic Information

		
	
Factory:
	
The manufacturing facility owned by Tesla in Storey County, Nevada, as depicted in Appendix A-1, located at Electric Ave, Sparks, NV 89434.

	
Land:
	
The real property on which the Factory is located, as described in Appendix A-1.

	
Premises:
	
The portion of the Factory leased to Tenant hereunder, as more specifically set forth in Appendix A-2.

	
Commencement Date:
	
January 1, 2017 [***].

	
Production Date:
	
The date that Tenant begins to produce Goods in the Premises for the Purpose.

	
Expiration Date:
	
As set forth in Section 11.1 below.  

	
[***]:
	
[***]

	
Purpose:
	
The manufacture, supply, and support of lithium-ion battery cells.

 

The Parties have executed this Amended Lease by persons duly authorized below:

 

 

 

	
Tesla, Inc.
	
 
	
Panasonic Energy of North America,

a division of Panasonic Corporation of

North America

	
By:
	
 
	
/s/ Yoshihiko Yamada                      
	
 
	
By:
	
 
	
/s/ Allan Swan                                  

	
Printed:
	
 
	
Yoshihiko Yamada                           
	
 
	
Printed:
	
 
	
Allan Swan                                       

	
Title:
	
 
	
VP, Gigafactory                               
	
 
	
Title:
	
 
	
President                                           

	
Date:
	
 
	
3/25/2019                                         
	
 
	
Date:
	
 
	
3/26/2019                                          

 

 

 

	
Factory Lease
	
 
	
Page 2 of 21

 

 

Whereas, Tesla, Panasonic and Tenant have entered into the General Terms, the Pricing Agreement, and certain other agreements with respect to the Purpose (collectively, the “Commercial Agreements”), which Commercial Agreements contemplate that Panasonic and/or its Affiliates, including without limitation Tenant, will perform the Purpose; and

Whereas, Tesla has purchased the Land, is currently operating and constructing a manufacturing facility on the Land, and intends to provide to Tenant sufficient space and utilities at such facility for the Purpose;

Now, therefore, the Parties agree as follows:

	
1.
	
Lease Rights and Obligations.

	
1.1
	
Grant of Lease.  

	
 
	
(a)
	
Tesla leases to Tenant, and Tenant takes from Tesla, the Premises, to have and to hold for the Lease Term, subject to any superior liens or encumbrances and subject to the terms of this Lease and reserving and excepting to Tesla the roof and provided that this Lease confers no rights either with regard to the subsurface of the Land below the ground level of the building or with regard to airspace above the roof of the Factory.  Tenant’s rights under this Lease include an exclusive right to use the Premises and a non-exclusive right to use all parking and other areas and all easements and rights benefiting the Premises.  Tenant and its employees and business invitees shall be entitled to the non-exclusive use of the Common Areas during the Lease Term, in common with Tesla and with other persons authorized by Tesla from time to time to use the Common Areas.  Tesla shall tender possession of the Premises to Tenant in its “as-is” condition as of the Commencement Date, without limiting any mutually-agreed punch lists with respect to the Premises, and, as a Tesla Responsibility, cause the Premises, the portions of the Factory pertinent to the Premises (including, without limitation, the Common Areas)  and the corresponding exterior portions of the Factory (including the parking areas and the driveways, alleys, landscape and grounds surrounding such portions of the Factory) to be in compliance with all applicable Laws as of the Production Date and during the Lease Term (except to the extent of Tenant’s obligations with respect to the Premises).

	
 
	
(b)
	
The Parties shall discuss in good faith the general configuration of the Premises [***] within the Factory as required for Tenant to accomplish the Purpose.  Prior to [***]: (i) Tenant may access the Premises for (A) planning, measurement, construction and installation of improvements, fixtures, and customizations to the Premises including Factory Systems (collectively, the “Tenant Improvements”) which are approved in writing by Tesla from time to time and required for Tenant to accomplish the Purpose, such approval to not unreasonably be withheld, delayed or conditioned, and (B) delivery, installation, and preparation of inventory and equipment as required for Tenant to accomplish the Purpose; and (ii) (A) Tesla will provide reasonable, temporary restroom facilities for Tenant’s agents, contractors and employees; and (B) Tesla will provide without charge reasonable space for temporary parking facilities for Tenant’s contractors and/or subcontractors for planning, measurement, construction and installation of Tenant Improvements and/or Tenant’s Property to the Premises, on the Land and/or within the Factory.  Tenant may, subject to Tesla’s reasonable safety instructions and policies, also access the Premises at no cost and expense to Tenant prior to [***] ( from time to time upon Tesla’s prior consent (which shall not be unreasonably withheld, delayed or conditioned) for the purpose of planning, measurement and other necessary preparation for Tenant Improvements and/or other Tenant’s Property.  Tenant shall complete and maintain all Tenant Improvements in a professional and workmanlike manner with reasonable quality materials.  On or after [***], Tenant may access the Premises for manufacturing and support activities related to the Purpose.  

	
 
	
(c)
	
Tenant acknowledges that this Lease and all rights granted hereunder are subject to any and all restrictions generally applicable to the Factory and/or the Land, including the CCR Rules.  

	
 
	
(d)
	
Notwithstanding anything to the contrary, Tesla shall not, during the Lease Term, lease the Premises to Tesla’s Affiliates or any other third party without Tenant’s prior written consent. 

	
 
	
(e)
	
During the Lease Term, Tenant shall: (i) maintain a valid business license in the State of Nevada and all Permits required by the county, city, and/or town in which the Factory is located; and (ii) maintain the Premises as its primary place of business for the Purpose.

 

	
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1.2Use.  During the Lease Term, Tenant shall: (a) use and occupy the Premises solely for the Purpose and for no other purpose whatsoever, unless otherwise agreed in writing by Tesla; (b) not use the Premises in any manner that is disreputable, creates extraordinary fire or other hazards (with reference to the Purpose), or that is beyond the scope of what is necessary for the Purpose and that results in an increase in the cost of insurance on the Factory; and (c) subject to Section 9.2, cause the Premises to comply with all applicable Laws (for avoidance of doubt, this obligation does not extend to areas of the Land or Factory outside the Premises, except to the extent such areas are or become under Tenant’s control).  Tenant will have access to the Premises 24 hours per day, 7 days per week.  The Parties shall discuss in good faith and sign a mutually-agreed matrix to describe each Party’s responsibility during the Lease Term for certain operational activities and/or maintenance in or around the Premises and/or Factory (hereinafter referred to as the “Responsibilities Matrix”). 

	
1.3
	
Utilities.  

	
 
	
(a)
	
Factory Utilities.  Subject to Tenant providing to Tesla a reasonably complete mutually agreed upon [***]according to Appendix B, Tesla shall, as a Tesla Responsibility, design, procure, install, configure, maintain in good working order, and furnish the utilities and services to the Premises identified in Appendix B as a Tesla Responsibility (including installation, hook-up, delivery, and repair) (collectively, the “Factory Utilities”).  Tesla may monitor Tenant’s use of the Factory Utilities, and Tenant shall [***] pursuant to [***] of the General Terms, which is hereby incorporated by reference into, and forms an integral part of, this Lease provided that such provision shall be deemed amended and modified mutatis mutandi solely for purposes of applicability to this Lease.  The Parties shall discuss Tenant’s use of the Factory Utilities in good faith as requested by Tesla, and the Parties shall discuss in good faith any requests by Tenant that Tesla assume responsibility for additional utilities and services to the Premises.  

	
 
	
(b)
	
Tenant Utilities.  Tenant shall, at its expense, install, configure, maintain, and/or procure the utilities and services to be solely used by Tenant and required for Tenant to accomplish the Purpose as reasonably determined by Tenant and as identified in Appendix B as a Tenant Responsibility (collectively, “Tenant Utilities”).  As of the date of this Agreement, the Tenant Utilities shall be the utilities and services set forth in Appendix B as the Tenant Utilities.  Tesla will use Commercially Reasonable Efforts not to interfere with Tenant’s use of Tenant Utilities.  Tesla shall not be responsible for providing any Tenant Utilities to Tenant.  Tesla shall not be liable to Tenant for any interruption or failure of service of any Tenant Utilities to the Premises from any cause whatsoever, except to the extent of Tesla’s gross negligence, willful misconduct, or failure to fulfill its commercially reasonable maintenance obligations for the Tenant Utilities Tesla has undertaken to maintain as identified in Appendix B, nor shall such interruption or failure constitute a constructive eviction or [***] or affect the obligations of Tenant under this Lease or the General Terms in any other way whatsoever.  If Tesla and/or any of its other tenants at the Factory desire to use any portion of the Tenant Utilities, the Parties shall discuss in good faith the terms and conditions of the use, including but not limited to Tenant’s charges for such use.

	
1.4
	
Maintenance and Repairs.  

	
 
	
(a)
	
Tesla Responsibilities.  During the Lease Term and as a Tesla Responsibility at no cost and expense to Tenant, Tesla will maintain, repair and, as necessary, replace: (i) the structure of the Factory (including the structural elements of the roof, the roof membrane, the slab, the foundation, structural elements of the Factory (e.g. column, beam), and exterior walls of the Factory); and (ii) all portions of the Premises and/or Factory not required to be maintained by Tenant under this Lease including the exterior portions of the Premises (e.g. the parking areas and the driveways, alleys, landscape and grounds surrounding the Factory), the Common Areas, those items that are identified as a Tesla Responsibility in the annexed Appendix B, and as otherwise agreed in writing by the Parties.  The Tesla Responsibilities include, without limitation, items identified in Appendix B as a Tesla Responsibility, utility lines serving the Premises inside the Premises; floor coverings; lighting; wiring; all locks and closing devices; plate glass, all window sash, casement or frames, window cases, window frames, security grilles or similar enclosures; doors and door frames; (which may include fire alarms, sprinkler systems for fire, fire proof doors; general air conditioning systems); and all items of repair, maintenance and improvement or reconstruction as may at any time or from time to time be required with respect to the Premises by any governmental agency having jurisdiction.  [***].  Tesla will use Commercially Reasonable Efforts to (i) respond to Tenant’s request for maintenance and repairs based on Tenant’s expressed priorities; (ii) keep Tenant informed of progress and completion of Tenant’s requested maintenance and repairs; and (ii) coordinate with Tenant so as to not interfere with Tenant’s use of the Premises during any such maintenance and repairs.

 

	
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(b)
	
Tenant Responsibilities.  During the Lease Term and at its cost and expense, Tenant shall repair, replace, and maintain the Premises and every part thereof in good and tenantable condition, subject to reasonable wear and tear, including Tenant Improvements which shall include Tenant equipment in the Premises, and all of Tenant’s signs; provided, however, that (i) the foregoing excludes the structural aspects of exterior walls, roof, structural portions of the Premises and structural floor, and (ii) Tesla shall conduct maintenance and repairs as contemplated in Section 1.4(a) above.  Tenant shall complete all maintenance and repair for which it is responsible in a professional and workmanlike manner, with reasonable quality materials and in compliance with applicable Laws and insurance requirements.  Tenant shall deposit all trash in a covered trash container.  Tenant waives the benefits of any current or future Law giving Tenant any rights or remedies as a result of the physical condition of the Premises and any and all rights to make repairs at Tesla’s expense or to terminate this Lease, except as expressly provided herein. Tenant Improvements must be designed and stamped by a licensed Nevada engineer or architect to the extent required by any governmental agency having jurisdiction and submitted to Tesla for review and approval prior to commencement of construction. Tenant Improvements must also comply in full with all applicable Laws.

1.5Signs.  Tenant may, at its cost, place its standard signs within the Premises, subject to applicable Laws and Tesla Policies.  At the end of the Lease Term, Tenant will remove its signs and spot repair, paint, and/or replace the Factory walls or surfaces to which its signs are attached.  Tenant shall not place any other signs on or in the Factory (other than the Premises) or any other portion of the Land without Tesla’s express, prior written consent.

1.6Quiet Enjoyment.  For so long as Tenant is not in default under this Lease beyond any applicable cure period, Tenant will have, subject to the terms of this Lease, peaceful and quiet enjoyment of the Premises.  

1.7Tenant Personnel.  Section 11.2 (Seller Personnel) of the General Terms is hereby incorporated by reference into, and forms an integral part of, this Lease, provided that such provision shall be deemed amended and modified mutatis mutandi solely for purposes of applicability to this Lease and such provision shall be deemed to include, for purposes of this Lease, any and all visitors, employees, directors, officers, agents, servants, contractors, subcontractors and/or subtenants of Tenant or any Tenant Affiliate (collectively “Tenant Personnel”) when they are at the Factory, and assignees, and/or successors of Tenant; provided, however, that: (a) Tenant shall not be obligated to comply with Section 11.2(a)(i) (legal right to work) for visitors who do not perform any work when they visit at the Factory; and (b) Tenant shall not be obligated to comply with Section 11.2(b) (background checks) of the General Terms for visitors who do not perform any work when they visit at the Factory or for any employees, directors, or officers of a Tenant Affiliate.  Tenant shall require all Tenant Personnel who enter the Factory to agree in writing to maintain confidentiality of Tesla’s Confidential Information under terms no less protective than the terms of the NDA.

1.8Insurance.  

	
 
	
(a)
	
General.  The Parties each agree that insurance policies obtained pursuant to this Section shall: (i) be held with one or more insurance companies rated A or better and having a financial size category of VII or larger (both as determined by A.M. Best & Company), and licensed to do business in Storey County, Nevada; (ii) be primary and not contributory with any liability coverage held by the other Party or any Affiliate of the other Party; (iii) provide for severability of interests; and (iv) to the extent possible, provide for a waiver of subrogation.  Each Party shall provide the other with certificates of insurance and copies of insurance policies upon request by the other Party.  Each Party will use Commercially Reasonable Efforts to give the other Party at least [***] days’ prior written notice of any restrictive change, non-renewal or cancellation of any policy obtained pursuant to this Section.  Each Party will be responsible for all deductibles and retentions with regard to their respective insurance policies.

	
 
	
(b)
	
Landlord Insurance.  During the Lease Term, Landlord shall obtain and maintain at its cost the following types and amounts of insurance coverage.  Landlord may insure the Premises through a blanket policy and, if Landlord does so, Landlord will allocate a reasonable portion of the premium to the Premises based on the insurer’s cost calculations.  Further, subject to applicable Laws, Landlord may self-insure any of the foregoing insurance requirements.

	
 
	
(i)
	
[***]for Property Insurance insuring the Factory and improvements to the Factory (including the Premises, but excluding Tenant’s Property and Tenant Improvements) at full replacement cost;

	
 
	
(ii)
	
Commercial General Liability in an amount of $2.5 million per occurrence covering the Common Areas of the Factory (but expressly excluding the Premises); and

	
 
	
(iii)
	
Worker’s Compensation & Employers’ Liability in an amount equal to the greater of $1 million per person and accident or the amount(s) required by applicable Laws of the State of Nevada.

 

	
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(c)
	
Tenant Insurance.  During the Lease Term, Tenant (i) shall obtain and maintain at its cost the types and amounts of insurance that are required by applicable Law or reasonably required by Landlord’s insurance provider(s), and (ii) may obtain and maintain, in its sole discretion and at its sole cost and expense, the following types and amounts of insurance coverage.  

	
 
	
(i)
	
“special form” Property Insurance covering Tenant’s Property and Tenant Improvements, at full replacement cost;

	
 
	
(ii)
	
Commercial General Liability in an amount of [***] covering the Premises, [***]; 

	
 
	
(iii)
	
Worker’s Compensation & Employers’ Liability with respect to Tenant Personnel in an amount equal to [***] or the amount(s) [***]; and 

	
 
	
(iv)
	
Automobile Liability covering hired, owned and non-owned vehicles using standard ISO Business Auto policy or similar form, in an amount of [***].

2.Tesla Responsibilities

2.1Section 2.4 (Tesla Responsibilities) of the General Terms is incorporated by reference into, and forms an integral part of, this Lease, provided that such provision shall be deemed amended and modified mutatis mutandi solely for purposes of applicability to this Lease.  

2.2As a Tesla Responsibility, Tesla shall: (a) maintain the Land; (b) construct the Factory; and (c) procure items for the Premises and/or the Purpose as may be agreed in writing by the Parties.

	
3.
	
[***]

	
3.1
	
[***]  

	
 
	
(a)
	
[***]

	
 
	
(b)
	
[***]

	
 
	
(c)
	
[***] 

	
3.2
	
[***] 

	
 
	
(a)
	
[***]  

	
 
	
(b)
	
[***] 

	
 
	
(c)
	
[***]

	
3.3
	
[***]

	
3.4
	
[***]

	
 
	
(a)
	
[***]

	
 
	
(b)
	
[***]

	
 
	
(c)
	
[***]

	
 
	
(d)
	
[***]  

4.Representations and Warranties.  

4.1General.  Each Party represents and warrants that it (and its Affiliates to the extent applicable): (a) will perform all of its obligations under this Lease in a professional and workmanlike manner, consistent with industry standards and in accordance with all of the terms of this Lease; and (b) has the right and ability to enter into, perform the obligations under and agree to the covenants contained in this Lease.  Tenant further represents that: (c) each obligation of any Tenant entity under this Lease is binding on all Tenant entities which are Parties to this Lease as if each such Tenant entity had agreed to the obligation.  Tesla further represents that: (d) each obligation of any Tesla entity under this Lease is binding on all Tesla entities which are Parties to this Lease as if each such Tesla entity had agreed to the obligation.  

 

	
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4.2Compliance with Laws and Tesla Policies.  

	
 
	
(a)
	
Tenant will, at its cost and expense, obtain all necessary regulatory approvals, licenses, and permits (collectively, “Permits”) applicable to its business and comply with all Laws and Factory Requirements applicable to its business or the performance of its obligations under this Lease, the General Terms, and/or the Contract Documents, as such Laws and/or Factory Requirements may be revised from time to time; provided, however, that the Parties shall consult in good faith and reasonably cooperate to obtain the Permits required for Tenant’s business operations at the Premises.  The foregoing includes all Laws pertaining to any of the following: (i) occupational safety and health; (ii) protection of persons and property from death, injury or damage; (iii) the environment, including all applicable Environmental Requirements; (iv) the use, handling, storage, labeling and disposal of toxic or Hazardous Materials; (v) labor and employment, including equal employment opportunity; (vi) tax; (vii) workmen’s compensation and unemployment insurance, (viii) money laundering, anti-terrorism, trade embargos, and economic sanctions; (ix) anti-bribery and anti-corruption; and (x) to the extent relevant to Tenant’s obligations, Laws with respect to data privacy, data protection, and consumer privacy.  Tenant will, if reasonably requested by Tesla, submit to Tesla evidence of such compliance.  Each Party will also provide the other Party with all information reasonably required in order for the other Party to comply with Laws applicable to it.  

	
 
	
(b)
	
Tesla will, at its cost and expense, comply with all Laws applicable to the performance of its obligations under this Lease, as such Laws may be revised from time to time, in any of the following areas: (i) occupational safety and health; (ii) protection of persons and property from death, injury or damage; (iii) the environment, including all applicable Environmental Requirements; and (iv) the use, handling, storage, labeling and disposal of toxic or Hazardous Materials.

	
 
	
(c)
	
To the extent not prohibited by Law, each Party will promptly notify the other Party in writing of any investigation or inquiry by a governmental authority into whether such Party (or any of its Personnel) is charged with failing to comply with any Laws that may or will impact its performance under this Lease.

	
 
	
(d)
	
Tenant will comply with any Tesla policies, standards, rules, and procedures (collectively, “Tesla Policies”) applicable to performance of Tenant’s obligations under this Lease and/or to the Factory which are disclosed to Tenant in writing and approved by Tenant, as such Tesla Policies may be revised from time to time subject to Tenant’s approval, and Tenant shall not unreasonably withhold, condition, or delay its approval for any such Tesla Policy or any changes thereto.  Without limiting the foregoing, Tenant shall also cause Tenant Personnel to sign Tesla’s Visitor Safety and Non-Disclosure Agreement when entering the Factory.

4.3Debarment.  Section 6.4 (Debarment) of the General Terms is incorporated by reference into, and forms an integral part of, this Lease, provided that such provision shall be deemed amended and modified mutatis mutandi solely for purposes of applicability to this Lease.

4.4Disclaimer.  The warranties set forth herein are exclusive and are in lieu of all other warranties with respect to this Lease, The Premises, the Factory, and/or the Land, whether arising from a course of dealing, course of performance or trade usage, or whether oral, written, express, implied or statutory, all of which are hereby waived by Tesla and Tenant.  

5.Indemnification.  

5.1Indemnification by Tenant.  Notwithstanding Section 12.1(d) of the General Terms, to the extent permitted by Law but subject to Section 5.3 (Procedure; Limitations), Tenant agrees to indemnify, defend and hold harmless Tesla, its Affiliates, and their respective directors, officers, employers and agents (collectively, “Tesla Indemnitees”) from and against any and all costs, fees, penalties, expenses, third-party damages, reasonable attorneys' fees and all other liabilities to any third party whatsoever (“Losses”), arising out of any Claim against any Tesla Indemnitee which arises from or relates to any actual or alleged: (a) personal injury (including death) or property damage to the extent caused by the negligence or willful misconduct of Tenant, any Tenant Personnel, or any of Tenant’s visitors, licensees, employees, directors, officers, agents, servants, contractors and/or subcontractors in connection with this Lease; (b) breach of a Tenant obligation under this Lease with respect to, or violation of, one or more Environmental Requirements for which Tenant is responsible under this Lease; (c) challenge (for example, through a lien or similar impairment) to Tesla's right, title and interest in the Premises, Factory, Land, Goods, or Tesla Property, or right to possession of any of the foregoing, in each case brought by any third party supplier to Tenant or any Tenant Personnel, including toolmakers, subcontractors, and lending institutions; or (d) Claims as contemplated in Section 13.4 (Brokers).  

 

	
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5.2Indemnification by Tesla.  Notwithstanding the provisions of Section 12.1(d) of the General Terms, to the extent permitted by Law but subject to Section 5.3 (Procedure; Limitations), Tesla agrees to indemnify, defend and hold harmless Tenant, its Affiliates, and their respective directors, officers, employers and agents (collectively, “Tenant Indemnitees”) from and against any and all Losses arising out of any Claim against any Tenant Indemnitee which arises from or relates to any actual or alleged: (a) personal injury (including death) or property damage to the extent caused by the negligence or willful misconduct of Tesla or any of Tesla’s visitors, licensees, employees, directors, officers, agents, servants, contractors and/or subcontractors in connection with this Lease; (b) breach of a Tesla obligation under this Lease with respect to, or violation of, one or more Environmental Requirements for which Tesla is responsible under this Lease; (c) challenge to Tenant’s sole right, title and interest in materials, work-in-process, Goods or Tenant’s Property, or right to possession of any of the foregoing, in each case brought by any third party supplier to Tesla or agent to Tesla, including toolmakers, subcontractors, and lending institutions; or (d) Claims as contemplated in Section 13.4 (Brokers).

5.3Procedure; Limitations.  Sections 7.3 (Procedure) and 7.4 (Limitations) of the General Terms are incorporated by reference into, and form an integral part of, this Lease, provided that such provisions shall be deemed amended and modified mutatis mutandi solely for purposes of applicability to this Lease.

6.Casualty.  If all or substantially all of the Factory or the Premises are damaged, or a part of the Factory is damaged so that the operation of Tenant at the Premises is adversely affected by a fire or other casualty (a “Casualty Event”), Tesla will notify Tenant promptly in writing of the occurrence of the Casualty Event, and will use Commercially Reasonable Efforts to give the notice within [***] days, which notice shall include an estimate as to the amount of time to restore the Premises (such notice is the “Casualty Notice”).  In case of the occurrence of a Casualty Event, the Parties shall discuss in good faith regarding the restoration of the Factory or the Premises, and Tesla shall use Commercially Reasonable Efforts to restore them as soon as practicable but in any event within [***]; provided, however, that, if Tesla reasonably determines after such good-faith discussion with Tenant that it cannot restore the Premises or such damaged portion of the Factory within a period of [***], then the Casualty Event will be deemed to be a Force Majeure Event and either Party may terminate this Lease upon written notice, provided that such Party was not grossly negligent in causing or failing to prevent the Casualty Event.  If neither Party exercises the foregoing termination right, or less than all or substantial all of the Premises are damaged by a Casualty Event, then Tesla will, as a Tesla Responsibility, use Commercially Reasonable Efforts to restore the Premises and/or such damaged portion of the Factory in a commercially reasonable period of time if and to the extent that Tesla deems it is commercially reasonable and feasible to do so.  [***] while Tesla restores the Premises and/or such damaged portion of the Factory adversely affecting Tenant’s operation (and for any additional period reasonably required for Tenant’s restoration of any improvements or equipment installed by Tenant and time reasonably required for Tenant to be fully operational at the Premises) in the proportion which the area of the Premises, if any, affected by the casualty or related restoration work bears to the total area of the Premises.  

7.Condemnation.  Tesla will promptly notify Tenant of any threatened Taking known to Tesla and will allow Tenant to participate in any negotiations with public authorities.  If all or substantially all of the Premises is taken for any public or quasi-public use under governmental law, ordinance, or regulation, or by right of eminent domain, or by private purchase in lieu of any condemnation (collectively, a “Taking” or “Taken”), or if any part of the Premises, the Factory, or the Land is Taken and the partial Taking would prevent or materially interfere with Tenant’s access to or use of the Premises, then Tenant may, at its option, terminate this Lease by giving written notice to Tesla.  Such termination will be effective as of the effective date of the Taking and will be deemed to be a termination due to a Force Majeure Event by either Party under the General Terms and this Lease.  If part of the Premises is Taken and Tenant does not terminate the Lease, (a) Tesla will, as a Tesla Responsibility, restore the Premises within a commercially reasonable period of time, and (b) [***].  If any Taking occurs, then Tesla will be entitled to the entire award for the Premises but Tesla shall have no right to any award for the value of Tenant’s Property, Tenant Improvements, and/or Tenant’s moving costs.  Tenant may separately pursue a claim against the condemning authority in connection with a Taking for the value of Tenant’s property, moving costs, loss of business, and other claims it may have.

 

	
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8.Subordination, Estoppel Certificates and Liens.  

8.1Mortgages.  At Tesla’s written request, Tenant will subordinate this Lease and Tenant’s interest and rights under this Lease to any existing or future deed of trust, security deed, mortgage, security assignments and any other similar encumbrances (each, a “Mortgage”), provided that the holder of the Mortgage has executed, acknowledged and delivered to Tenant a commercially reasonable Subordination, Attornment and Non-Disturbance Agreement that provides that:  (a) Tenant’s possession of the Premises and other rights under the Lease will not be disturbed in any proceeding to foreclose the Mortgage or in any other action instituted in connection with such Mortgage, (b) Tenant will not be named as a defendant in any foreclosure action or proceeding which may be instituted by the holder of such Mortgage, and (c) if the holder of the Mortgage or any other person acquires title to the Premises through foreclosure or otherwise, the Lease will continue in full force and effect as a direct lease between Tenant and the new owner, and the new owner will assume and perform Tesla’s obligations under this Lease.  The holder of any Mortgage may, at any time, subordinate its Mortgage to this Lease, without Tenant’s consent, by giving written notice to Tenant.  

8.2Estoppel Certificates.  Tenant shall, within [***] days of Tesla’s request, execute and deliver to Tesla estoppel certificates(s) to: (a) certify that this Lease is unmodified and in full force and effect or, if modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect and the date to which [***], if any; (b) acknowledge that there are not, to Tenant’s knowledge, any uncured defaults on the part of Tesla hereunder, or stating the nature of defaults if such exist; and (c) evidence the status of this Lease.  If Tenant fails to timely respond to a request for an estoppel certificate, Tesla may deliver an additional request accompanied by a second copy of the same estoppel certificate.  If Tenant does not respond within [***] Business Days after such second request, Tenant will be deemed to have agreed to all matters set forth in good faith in the estoppel certificate, except to the extent that Tesla has actual knowledge to the contrary.

8.3Mechanic’s Liens.  Tenant will not allow any person working on behalf of either Tenant or any Tenant Personnel to place any lien or similar impairment on the Land, Factory, or Premises.  

9.Environmental Requirements.  

9.1Responsibilities Matrix.  Unless expressly provided otherwise in the Responsibilities Matrix, Tenant shall install, operate, and maintain the Tenant Utilities in full compliance with all applicable Environmental Requirements and Tesla shall have such responsibility with respect to the Factory Utilities.

9.2Tesla Obligations.  Tesla shall, as a Tesla Responsibility and during the Lease Term: (a) cause the Land and Factory to comply with all Environmental Requirements, except (i) to the extent of Tenant’s obligations under Section 9.3, or (ii) to the extent that non-compliance with an Environmental Requirement is or was caused by Tenant, any Tenant Personnel, or any of Tenant’s visitors, licensees, employees, directors, officers, agents, servants, contractors and/or subcontractors; (b) be responsible for (i) coordination and arrangements with Tenant and all other entities located at the Land and permitted by Tesla, if any, for compliance with all Environmental Requirements with respect to the entire site, and (ii) any and all filings and permits with respect to the entire site as required under any Environmental Requirements, and Tesla will discuss in good faith such filings as related to Tenant’s operations in the Premises. 

9.3Tenant Obligations.  

	
 
	
(a)
	
Tenant shall not transport, store, use, generate, manufacture, or release any Hazardous Materials in or about the Premises, Land, or Factory, nor shall Tenant permit any Tenant Personnel to do any of the foregoing, except if and to the extent such activity is: (i) related to the Purpose; (ii) in compliance with all Environmental Requirements (including Section 9.5 of this Lease as applicable); and (iii) notified in advance in writing by Tenant (except in the case of ordinary office and cleaning supplies containing [***] in normal and customary amounts).  Further, except as expressly provided otherwise in this Lease or the Responsibilities Matrix, Tenant shall cause the Premises (as distinct from the Factory and Land) to comply with all Environmental Requirements during the Lease Term, including as applicable by conducting remediation, cleanup and repairs as required by applicable Law and/or any Environmental Requirements; provided, however, that Tesla shall conduct such remediation, cleanup and repairs at its expense if and to the extent that the non-compliance with one or more Environmental Requirements was caused by Tesla or any of Tesla’s visitors, licensees, employees, directors, officers, agents, servants, contractors and/or subcontractors.  Further, Tenant shall conduct remediation, cleanup and repairs with respect to the Land and Factory if and to the extent that the non-compliance with one or more Environmental Requirements was caused by Tenant, any Tenant Personnel, or any of Tenant’s visitors, licensees, employees, directors, officers, agents, servants, contractors and/or subcontractors.

 

	
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(b)
	
Tenant shall provide all information that is reasonably requested by Tesla in connection with, and required for, Tesla’s performance of its obligations under Section 9.2 above, and access to the Premises and Tenant’s records as required to confirm and evaluate the accuracy and thoroughness of such information.  Tenant shall not contest any findings or remediation (proposed or required) identified in a filing by Tesla in connection with any Environmental Requirements applicable to the site.  Tesla will use Commercially Reasonable Efforts to discuss in good-faith with Tenant any such findings or remediation, but only to the extent that (i) the finding(s) and/or remediation pertain to the Premises, and (ii) such discussion will not, in Tesla’s sole but reasonable determination, result in a breach of confidentiality or waiver of applicable privilege.

9.4Pre-Existing Issues.  Notwithstanding anything to the contrary herein or in the General Terms, Tenant shall not be liable for any non-compliance with any Environmental Requirements or any other environmental issue which existed in the Land, Factory and/or Premises before the Commencement Date and was not caused by Tenant.

	
9.5
	
[***]

	
 
	
(a)
	
[***]

	
 
	
(b)
	
[***]

	
 
	
(i)
	
[***]

	
 
	
(ii)
	
[***]

	
 
	
(c)
	
[***]

	
 
	
(d)
	
[***]

	
 
	
(f)
	
[***]

	
 
	
(g)
	
[***]

10.Liability.  

10.1Limitations of Liability and Exclusions.  Section 12.1 (Limitations of Liability and Exclusions) of the General Terms is incorporated by reference into, and forms an integral part of, this Lease, provided that such provision shall be deemed amended and modified mutatis mutandi solely for purposes of applicability to this Lease.  The foregoing provision governs each Party’s liability pursuant to this Lease; provided, however, that the following shall also be deemed to be direct damages for purposes of this Lease:

	
 
	
(a)
	
actual and reasonable damages and liability incurred by a Party with respect to environmental conditions or issues (including actual and reasonable costs of remediation, if applicable), either (a) to the extent caused by the other Party and/or (b) to the extent such conditions or issues are the legal responsibility of the other Party; the foregoing includes, without limitation, any and all losses, fines, penalties, liabilities, damages (including punitive damages), remedial costs and expenses (including investigation, remediation, removal, repair, corrective action, and/or cleanup expenses), and costs (including actual and reasonable attorneys’ fees, consultant fees and/or expert witness fees) suffered or incurred by a Party arising from any of the following to the extent caused by acts or omissions of the other Party or any employee or agent thereof: (i) the presence of any Hazardous Materials in, under, on or from the Premises, Factory, and/or Land (e.g. in connection with any spills or the transfer of chemicals from a tanker to storage for use in production activities at the Factory); or (ii) failure to comply with any applicable Environmental Requirement; 

	
 
	
(b)
	
if Tesla terminates for Tenant’s Lease Default, the [***];

	
 
	
(c)
	
if Tesla terminates for Tenant’s Lease Default, the actual and reasonable costs and expenses to Tesla of soliciting new tenants during [***], including any costs and expenses for re-fixturing, alterations and other costs in connection with the Premises for any reasonable or necessary alterations to bring the Premises back to the condition as of the Commencement Date subject to reasonable wear and tear;

10.2Force Majeure.  Section 12.2 (Force Majeure) of the General Terms is incorporated by reference into, and forms an integral part of, this Lease, provided that such provision shall be deemed amended and modified mutatis mutandi solely for purposes of applicability to this Lease.

 

	
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11.Term and Termination.  

11.1Term.  The term of this Lease (the “Lease Term” or “Amended Lease Term”) will begin on the Amendment Effective Date and end on the effective date of termination or expiration of the General Terms and each Contract entered into by the Parties thereunder (the “Expiration Date”).  

11.2Termination, Generally.  This Lease may only be terminated as provided in this Section 11 (Term and Termination).  Termination by a Party will be without prejudice to any other rights and remedies available to a Party.  Neither Party will be obliged to pay any termination charges or demobilization fees to the other Party in connection with any termination of this Lease, except as may be expressly set forth in this Lease.

11.3Termination.  

	
 
	
(a)
	
Subject to Sections 2.1 (Tesla Responsibilities) above, the Party who is not in Lease Default may terminate this Lease as follows: (i) if the other Party breaches a material obligation under the Lease and fails to cure the breach within [***] days after receipt of notice of such breach expressly stating the non-breaching Party’s intent to terminate (“Notice of Termination”) or, if the breach cannot reasonably be cured within such [***]-day period, [***] days after receipt of Notice of Termination provided the Party in Lease Default commences and diligently pursues a cure within the [***]-day period; (ii) if the other Party becomes a debtor in a bankruptcy, insolvency, receivership, or similar proceeding commenced by a third party that is not dismissed within a reasonable time after commencement; or (iii) immediately upon Notice of Termination in the event of an incurable material breach, including (A) a Party’s repudiation of this Lease, (B) in case of Section 4.3 (Debarment), or (C) if the other Party makes an assignment for the benefit of creditors in violation of this Lease or voluntarily institutes proceedings in bankruptcy or insolvency.  Each of the foregoing types of breach shall be deemed to be a “Lease Default.”  The Party that issues the Notice of Termination may approve a longer cure period with respect to any Lease Default in its sole discretion.  For purposes of this subsection, each of the following will be deemed to be a material breach of this Lease: (x) Tenant’s abandonment of the Premises; (y) [***]; and (z) either Party’s assignment, encumbrance or subletting in violation of the provisions hereof.

	
 
	
(b)
	
The Parties may also terminate this Lease: (i) as provided in Section 10.2 (Force Majeure); (ii) as provided in Section 6 (Casualty); (iii) as provided in Section 7 (Condemnation); or (iv) for convenience (i.e. without cause) upon prior written notice to the other Party if such other Party experiences a Change of Control Event, but only if both: (A) the Change of Control Event will, or is reasonably likely to, materially and adversely affect the terminating Party’s interests pertinent to the General Terms and the Contract(s), and (B) the terminating Party terminates within [***] after such Change of Control Event.  

	
 
	
(c)
	
Tenant may terminate this Lease pursuant to Section 11.1 of the General Terms.

	
 
	
(d)
	
Subject to Section 11.3 (Extension of Lease) of the General Terms, this Lease shall also automatically terminate without any further action by the Parties upon expiration or termination of the General Terms and all Contracts by and between the Parties under the General Terms.  

11.4Obligations Upon Termination or Expiration.  

	
 
	
(a)
	
Immediately upon the date of expiration or termination of the Lease and in addition to any actions or payments expressly required hereunder but subject to Section 11.3 (Extension of Lease) of the General Terms, Tenant shall vacate and deliver to Tesla possession of the Premises (i) free and clear of all liens, charges, or encumbrances thereon resulting from any act or omission on Tenant’s part, (ii) free and clear of all violations of applicable Laws excluding any violation for which Tenant is not responsible, including any violation of the Environmental Requirements which existed prior to the Commencement Date, (iii) broom clean, in good condition, normal wear and tear excepted, free of all toxic or Hazardous Materials and waste materials of any nature brought onto the Premises or caused by Tenant or for which Tenant is otherwise responsible, but excluding any of them for which Tenant is not responsible, and (iv) having removed all Tenant Improvements so that the Premises are in substantially the same condition as they are in at Commencement Date and/or Production Date or when installed, if later, normal wear and tear excepted.  

	
 
	
(b)
	
Prior to such delivery but subject to Section 11.3 (Extension of Lease) of the General Terms, Tenant shall remove all Tenant’s Property and Tenant Improvements that Tenant has the right to remove or is obligated to remove under this Lease and shall repair all damage caused by and perform all restoration made necessary by the removal of any Tenant Improvements or Tenant’s Property normal wear and tear excepted.  If and to the extent that Tenant does not comply with the foregoing when it surrenders the Premises, (i) Tesla may elect to retain or dispose of Tenant Improvements and dispose of Tenant’s Property in any manner, and (ii) Tenant shall reimburse Tesla upon demand for Tesla’s costs for storing, removing, and disposing of any Tenant Improvements or Tenant’s Property.

 

	
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11.5
	
Holding Over.  

	
 
	
(a)
	
If Tenant remains in possession of the Premises after the effective date of termination or after expiration of the Lease Term (and provided that the Preparation Period has expired), unless otherwise provided in Section 11.3 (Extension of Lease) of the General Terms (the “Holding Over”), such possession by Tenant shall be deemed to be a month-to-month tenancy which is subject to termination by either Party by providing [***] days’ prior written notice to the other Party.  All provisions of this Lease, except those pertaining to Lease Term and option to extend, shall apply to such month-to-month tenancy, unless otherwise provided in Section 11.3 (Extension of Lease) of the General Terms; provided that [***] in case of expiration or termination of this Lease or the General Terms for any reason other than as set forth in subparagraph (i) above.  

	
 
	
(b)
	
If the Holding Over continues more than [***] days, then Tenant will be liable to Tesla for the rental revenue lost by Tesla as a result of the holdover (other than as a result of a termination of any executed lease for any portion of the Premises) and for any amounts Tesla is required to pay to any new tenant (whether in the form of rent abatement, monetary damages, or otherwise) as a result of the holdover.  If Tenant wishes to extend its occupation of the Premises after the effective date of expiration or termination of this Lease, Tenant may request an extension in writing and Tesla will discuss such extension with Tenant in good faith but Tesla shall have no obligation to grant an extension.

	
 
	
(c)
	
If the Holding Over continues more than [***] days, then upon [***] day prior written notice to Tenant: (A) Tesla shall have an unconditional right of entry to the Premises and may use such reasonable force as it may deem necessary for the purpose of gaining admittance to and retaking possession of the Premises without any liability in trespass; (B) Tesla may expel and remove Tenant, those claiming under Tenant, and their effects, as allowed by Law, without any liability in trespass; (C) if Tesla removes any Tenant’s Property from the Premises, Tesla may either store such property in a public warehouse or at a place selected by Tesla in the State of Nevada at Tenant’s expense or scrap or recycle such property in its sole discretion and use the resulting funds (if any) towards any indebtedness of Tenant to Tesla, in each case without any liability to Tenant other than to provide any remaining balance of proceeds from scrap or recycling to Tenant; (D) Tesla may remove any and all Tenant Improvements in the Premises at Tenant’s expense; and (E) Tenant hereby releases Tesla from all actions, proceedings, claims, and demands whatsoever for and in respect of Tesla’s exercise of any of the foregoing rights except in case that such action, proceeding, claim and/or demand are raised based on Tesla’s intentional torts, willful misconduct or gross negligence.

12.Dispute Resolution.  

12.1Governing Law.  This Lease will be interpreted and construed in accordance with the following substantive Laws and the Laws of the United States generally applicable therein, without regard to any provisions of choice of law rules that would result in a different outcome: (a) the Laws of California with respect to contract matters; and (b) the Laws of Nevada with respect to leasehold matters.  The UN Convention on Contracts for the International Sale of Goods will not apply to this Lease.  

12.2Dispute Resolution.  In the event any disputes, differences or controversies arise between the Parties, out of or in relation to or in connection with the provisions of this Lease, the Parties shall thoroughly explore all possibilities for an amicable settlement.  Section 15.3 (Arbitration) of the General Terms is incorporated by reference into, and forms an integral part of, this Lease, provided that such provision shall be deemed amended and modified mutatis mutandi solely for purposes of applicability to this Lease.  Each Party agrees to continue performing its obligations under this Lease while a dispute is being resolved unless and until such obligations are terminated by the termination or expiration thereof.

13.Miscellaneous.

13.1Assignment and Subcontracting.  

	
 
	
(a)
	
Without prior written consent of the other Party, neither Party may assign this Lease and Tenant may not sublet its rights hereunder, and any attempt to do so shall be void; provided, however, that: (i) each Party may, by a written notice but without requiring the other Party’s consent or meeting any other condition, add an Affiliate which operates in the Factory as a co-party to this Lease; and (ii) Tesla may, with Tenant’s prior written consent, which shall not be unreasonably withheld, conditioned or delayed, assign any or all of its rights, benefits or remedies to an Affiliate which assumes all of Tesla’s obligations hereunder.

 

	
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(b)
	
Tenant may not subcontract any of its obligations under this Lease without Tesla’s prior written consent (such consent will not be unreasonably withheld, conditioned, or delayed by Tesla), and any attempt to do so shall be void.  If Tenant subcontracts any of its obligations under this Lease to a third party, Tenant will: (i) be solely responsible for payments to the subcontractor; (ii) include in its purchase order or any other contract with the subcontractor a waiver of subcontractor liens on the Premises and Factory to the maximum extent permitted by applicable Law; (iii) before permitting any subcontractor to use Tesla Property and/or access the Factory, obtain Tesla’s prior written consent, which shall not be unreasonably withheld, conditioned, or delayed by Tesla; and (iv) replace any subcontractor used by Tenant in connection with this Lease as reasonably requested by Tesla within a reasonable time after receipt of notice from Tesla and following a good faith discussion.  Tesla has no obligation with respect to any subcontractor of Tenant.  Any subcontracting, assignment or delegation by Tenant does not relieve Tenant of any responsibility under this Lease, and Tenant remains responsible to the same extent as if the subcontracted, assigned or delegated responsibilities were retained by Tenant.  [***] shall not be deemed to be a waiver by Tesla of any provision hereof.  Consent to one assignment or subletting shall not be deemed consent to any subsequent assignment or subletting.  In the event of default by any assignee, subtenant or any other successor of Tenant under this Lease, in the performance of any of the terms hereof, Tesla may proceed directly against Tenant without the necessity of exhausting remedies against such assignee, subtenant or successor.  If and to the extent that Tesla unreasonably withholds, conditions or delays its consent to any proposed subcontractor, Tesla will be deemed to have failed to perform a Tesla Responsibility and Section 2.4(b) of the General Terms will apply.  

	
 
	
(c)
	
In the event of a Change of Control Event affecting a Party, the person or entity which acquires Control of the Party shall be subject to the terms and conditions of, and shall assume all of the acquired Party’s obligations under, this Lease.  

	
 
	
(d)
	
If Tesla sells, transfers, assigns or otherwise disposes of any portion of the Land and Factory covered by this Lease and/or the Factory Utilities to a Tesla Affiliate or a third party, any such sale, transfer, assignment or disposal shall be subject to any and all of Tenant’s rights under this Lease.  Tesla shall first notify in writing to and discuss with Tenant in good faith if Tesla intends to sell, transfer, assign or otherwise dispose of any portion of the Land and Factory covered by this Lease and/or the Factory Utilities to any third party.

	
 
	
(e)
	
This Lease shall be binding upon the respective successors and permitted assigns of the Parties.

13.2Audit and Inspection.  

	
 
	
(a)
	
Tenant will permit Tesla and its agents and representatives to enter the Premises if reasonably required and with reasonable prior notice and in compliance with Tenant’s reasonable security and occupational safety procedures for any of the following: 

	
 
	
(i)
	
an emergency at any time; 

	
 
	
(ii)
	
a law enforcement or government inspection at any time; 

	
 
	
(iii)
	
employee health & safety (EHS);

	
 
	
(iv)
	
security;

	
 
	
(v)
	
audit (e.g., PPAP);

	
 
	
(vi)
	
evaluation of compliance with Environmental Requirements and/or for purposes of any Tesla filings or obligations under one or more Environmental Requirements; 

	
 
	
(vii)
	
as separately approved in writing by Tenant following a good faith discussion with Tesla; and/or 

	
 
	
(viii)
	
maintenance or repair of Tesla Property used by or for Tenant in the Premises.  

 

	
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(b)
	
Tesla and its authorized representatives shall have the right, from time to time with reasonable prior written notice and subject to the NDA and compliance with Tenant’s reasonable security and occupational safety procedures, to access the Premises as approved by Tenant (such approval will not be unreasonably withheld, conditioned, or delayed by Tenant) for any of the following purposes:  (i) to determine whether the Premises are in good condition and whether Tenant is complying with its obligations under this Lease; (ii) to do any necessary or appropriate maintenance and to make any restoration to the Premises or the Factory and other improvements in which the Premises are located that Tesla has under the Lease the right or obligation to perform; (iii) to serve, post, or keep posted any notices required or allowed under the provisions of this Lease; and/or (iv) to shore the foundations, footings, and walls of the Factory and to erect scaffolding and protective barricades around and about the Factory or Premises (but without preventing entry to the Premises), and to do any other act or thing necessary for the safety or preservation of the Premises or the building and the other improvements in which the Premises are located if any excavation or other construction is undertaken or is about to be undertaken on any adjacent property or nearby street.  

	
 
	
(c)
	
Tenant will maintain records as required to demonstrate its compliance with the terms of this Lease.  Tesla and its representatives may audit Tenant’s records for the three-year period prior to the audit date using reasonable efforts not to interrupt Tenant’s operations in the Premises, to the extent needed to verify compliance with this Lease, and Tenant will make such records available to Tesla and its auditors for examination and copying upon their reasonable request; provided that Tenant is not obliged to make available any technical or engineering records, data and/or information which is confidential or proprietary to Tenant and which is owned or controlled by Tenant without the prior written agreement between the Parties.  Each Party shall bear its own expenses in connection with any such audit.  Tesla shall not be liable in any manner for any inconvenience, disturbance, loss of business, nuisance, or other damage arising out of Tesla’s entry on the Premises, nor shall any such entry constitute a constructive eviction or in any way affect Tenant’s obligations under this Lease or [***].  

13.3Authority.  Each Party represents to the other that it has the full right and authority to bind itself without the consent or approval of any other person or entity and that it has full power, capacity, authority and legal right to execute and deliver this Lease and to perform all of its obligations hereunder.

13.4Brokers.  Each Party represents and warrants that it has dealt with no broker, agent or other person in connection with this Lease, and agrees to indemnify and hold the other Party harmless from and against any claims by any broker, agent or other person claiming a commission or other form of compensation by virtue of having dealt with such Party with regard to this Lease.

13.5Confidentiality.  The then-current Non-Disclosure Agreement executed by the Parties (“NDA”) sets forth the Parties’ respective confidentiality obligations hereunder.  The NDA is hereby incorporated by reference in this Lease, and the terms and conditions of the NDA will continue in force during the Lease Term and thereafter during the Confidentiality Period (as defined in the NDA).

13.6Counterparts.  This Lease may be executed in counterparts, each of which shall be an original and together which shall constitute one and the same instrument.

13.7Covenant of Good Faith.  Each Party, in its respective dealings with the other Party under or in connection with this Lease, shall act in good faith and with fair dealing.

13.8Environmentally Friendly Practices.  In addition to complying with all Environmental Requirements, to the maximum extent practicable, each Party will use environmentally conscious materials and practices in connection with this Lease.

13.9Entire Agreement.  This Lease (including its accompanying addenda and exhibits, the recitals and Basic Information at the beginning hereof, and together with applicable provisions in the General Terms, the Pricing Agreement, and any documents incorporated or referenced in either of the foregoing) constitutes the entire agreement between the Parties with respect to its subject matter, and supersedes all prior oral or written representations or agreements by the Parties with respect thereto.  No subsequent terms, conditions, understandings, or agreements purporting to modify the terms of this Lease will be binding unless in writing and signed by a Director-level or higher for Tesla and an authorized employee of Tenant.  

 

	
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13.10Memorandum of Lease.  If requested by Tenant and during the Lease Term, Tesla will execute a memorandum of lease with respect to this Lease.  Tenant shall be responsible for recording such memorandum of lease at its expense if Tenant elects to do so.

13.11No Third Party Beneficiaries.  This Lease is entered into solely between Tesla and Tenant and, except for the Parties’ indemnification obligations hereunder, will not be deemed to create any rights in any third parties or to create any obligations of either Tesla or Tenant to any third parties.

13.12No Waiver.  The failure of either Party to enforce on a particular occasion any right or remedy provided in this Lease or by law or in equity will not be deemed a waiver of that right or remedy on a subsequent occasion or a waiver of any other right or remedy.

13.13Notices.  Section 16.1 (Notices) of the General Terms is hereby incorporated by reference into, and forms an integral part of, this Lease provided that such provision shall be deemed amended and modified mutatis mutandi solely for purposes of applicability to this Lease.  Copies of all notices to Tenant shall also be sent to Panasonic Corporation of North America, Two Riverfront Plaza, Newark, NJ 07102, Attn: General Counsel.

13.14Relationship of Parties.  The Parties are independent contractors under this Lease and no other relationship is intended, including a partnership, franchise, joint venture, agency, employer/employee, fiduciary, master/servant relationship, tenancy-in-common, joint tenancy, financing, or other special relationship, express or implied.  Neither Party shall act in a manner that expresses or implies a relationship other than that of independent contractor, nor bind the other Party.  Tesla and Tenant will treat this Lease (including its accompanying addenda and exhibits) as a lease in their separate books and records and in any reports to any third party.

13.15Rules of Interpretation.  Section 16.7 (Rules of Interpretation) of the General Terms is hereby incorporated by reference into, and forms an integral part of, this Lease provided that such provision shall be deemed amended and modified mutatis mutandi solely for purposes of applicability to this Lease.

13.16Severability.  If for any reason a court of competent jurisdiction finds any provision of this Lease to be unenforceable, that provision of this Lease will be enforced to the maximum extent permissible so as to implement the intent of the Parties, and the remainder of this Lease will continue in full force and effect.

13.17Survival.  Any provision of this Lease that contemplates or governs performance or observance subsequent to termination or expiration will survive the expiration or termination hereof for any reason.  

13.18Time.  Time is of the essence as to the performance of each Party’s obligations under this Lease.

13.19Defined Terms.    

	
 
	
(a)
	
“Business Day” means any day that is not a Saturday, Sunday, or federal holiday.  

	
 
	
(b)
	
“CCR Rules” means all policies, procedures, rules and regulations applicable to the Factory and/or the Land (collectively, the “CCR Rules”).

	
 
	
(c)
	
"Common Areas" shall mean all areas of the Factory intended or designated by Tesla from time to time as for the common use or benefit of the tenants of the Factory and their employees, agents, and other invitees, including all parking areas, pedestrian walkways, driveways and access roads, entrances and exits, and landscaped areas.

	
 
	
(d)
	
“Environmental Requirements” means all applicable present and future Laws regulating or relating to human health, safety, or environmental conditions on, under, or about the Premises, Factory, Land, or the environment, including but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA); the Resource Conservation and Recovery Act; and all state and local counterparts.

	
 
	
(e)
	
“Factory Requirements” means, collectively, all CCR Rules and insurance requirements applicable to the Factory and/or the Land.

	
 
	
(f)
	
“Factory Systems” means, collectively, HVAC systems, fire suppression systems, lighting systems, electrical systems, plumbing systems, or other mechanical and building systems.

 

	
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(g)
	
“Hazardous Materials” means and includes any substance, material, waste, pollutant, or contaminant listed or defined as hazardous or toxic under any Environmental Requirements. 

	
 
	
(h)
	
“Law(s)” means any statute, regulation, ordinance, rule, order, decree or governmental requirement enacted, promulgated or imposed by any governmental authority at any level (e.g., municipal, county, province, state or national).  For the avoidance of doubt, the term “Laws” includes any and all applicable Anti-Bribery Laws and Anti-Money Laundering Laws. 

	
 
	
(i)
	
[***]

	
 
	
(j)
	
“Party” refers to either Tesla or Tenant and “Parties” refers collectively to Tesla and Tenant.  

	
 
	
(k)
	
“Tenant’s Property” has the same meaning as the term Seller’s Property, as defined in Section 9.1 of the General Terms.

	
 
	
(l)
	
“Taxes” means, for purposes of this Lease, all real estate taxes, assessments and governmental charges.  Taxes do not include any estate taxes or inheritance taxes, transfer, gift or franchise taxes, or gross receipts taxes of Tesla, any “roll back” or similar taxes attributable to periods before the Commencement Date, or any federal, state or local income taxes, any tax in lieu of net income tax, any penalties or interest other than those attributable to Tenant’s failure to comply timely with its obligations under this Lease, nor any special assessments incurred as a result of the initial construction or subsequent enlargement of the Premises. 

	
 
	
(m)
	
“Tesla Property” has the meaning set forth in Section 9.1 of the General Terms.

	
 
	
(n)
	
“Tesla Responsibility” (including its derivations) has the meaning set forth in Section 2.4 (Tesla Responsibilities) of the General Terms. 

	
 
	
(o)
	
“Tesla-Supplied Items” means, collectively, the raw materials, components, supplies, and/or services to be provided by Tesla hereunder as a Tesla Responsibility.

 

Exhibits

 

Appendix A-1:  Legal Description of Land

Appendix A-2:  Site Plan for Premises

Appendix B:  Factory Utilities, Tenant Utilities, and Certain Factory Systems and Tenant Improvements

Appendix C:  Utility Rates

Appendix D:  [***]

 

 

 

	
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Appendix A-1:  Legal Description of Land

 

[***]

 

	
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Appendix A-2: Site Plan for Premises

 

[***]

 

	
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Appendix B:  Factory Utilities, Tenant Utilities, and Certain Factory Systems and Tenant Improvements

 

[***]

 

	
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Appendix C:  Utility Rates

 

[***]

 

	
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Appendix D:  [***]

Per Section [***] of this Lease, Tenant is required to comply with all Environmental Requirements relevant to the battery cell production materials supplied to Tenant for use in production of battery cells at Gigafactory 1. 

[***]

 

 

	
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