Tesla 2011 Annual Report Download - page 159

CONFIDENTIAL TREATMENT REQUESTED BY TESLA MOTORS, INC.
TESLA AND TMC CONFIDENTIAL INFORMATION
EXECUTION VERSION
(b) Development . Each of the Parties shall use its commercially reasonable efforts to perform the Services and deliver the Deliverables in
accordance with the Initial Statement of Work and Specification or Final Specifications, as the case may be. For avoidance of doubt, the Initial
Statement of Work and Specification and the Final Specifications shall contain the full and complete statements of the requirements for the
Deliverables and no additional requirements shall alter the requirements for the Deliverables unless mutually agreed to by the Parties pursuant to
the process set forth in Section 2(e). Unless otherwise designated in the Initial Statement of Work and Specification or Final Statement of Work,
each Party shall have the right to sub-contract all or part of its development obligations under this Agreement; provided that said subcontractors
are bound to observe the provisions of this Agreement, and that the delegating Party is liable in the event that subcontractors violate the
provisions of this Agreement (whether or not such person or entity is a Party).
(c) Delivery Dates . Each Party (the “ Performing Party ”) shall use commercially reasonable efforts to complete and deliver its
Deliverables by the Delivery Date set forth in the Deliverables Schedule. The Performing Party agrees to notify the other Party (the “ Receiving
Party ”)
of any circumstances when and as they arise, that may lead to a deviation from such Delivery Date. If Performing Party is not be able to
complete performance according to the Initial Statement of Work and Specification or Final Statement of Work, as the case may be, due to the
Receiving Party’s inability to deliver information necessary for the Performing Party to meet its obligations under the Initial Statement of Work
and Specification or the Final Statement of Work, as the case may be, the scheduled date on which a Deliverable was due will be extended for
the time of the delay to meet a Delivery Date for a Deliverable or other required performance which is delayed on account of failure of the
Receiving Party to complete a prerequisite performance or deliver prerequisite material in timely fashion. Deliverables shall be delivered in such
format and on such media as set forth in the Initial Statement of Work and Specification or Final Statement of Work, as the case may be, or as
the Parties may mutually agree upon in writing. The Performing Party will notify the Receiving Party in writing as soon as reasonably possible,
if it will not be able to deliver a Deliverable within the timeframe set forth in the Deliverables Schedule together with the reason for its inability
to do so.
(d) Acceptance Process .
(i) Acceptance of Non-Prototype Powertrain Systems Deliverables . Upon delivery of a Deliverable (including, without limitation,
the Initial Deliverables) by the Performing Party to the Receiving Party, to the extent that the Deliverable is subject to acceptance, the Receiving
Party will test whether the Deliverable conforms in all material respects to the applicable part of the Initial Statement of Work and Specification
or Final Specifications, as the case may be. Excluding Deliverables which are Prototype Powertrain Systems, the Receiving Party will accept or
reject each Deliverable within fifteen (15) Business Days after delivery and will give the Performing Party written notice of acceptance or
rejection thereof, provided however, in the event that a notice of rejection is not received by the Performing Party within the fifteenth (15 )
Business Day period, the
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***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the
Commission.
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