Blueprint





 






 



MANUFACTURING AGREEMENT


 


 



This Manufacturing Agreement (the “Agreement”) is effective February ____, 2017 (the
“Effective
Date”),


 



BETWEEN:


	
 

	


ELECTRAMECCANICA VEHICLES CORP., an entity incorporated
under the laws of the Province of British Columbia, Canada, with an
address of Suite 102 East 1st Avenue, Vancouver, British Columbia,
Canada, V5T 1A4 (“EMV”);


 


	


AND:

	

CHONGQING
ZONGSHEN AUTOMOBILE INDUSTRY CO., LTD., a company organized and
existing under the laws of China, with its head office located
at:


Zongshen
Industry Zone Banan District, Chongqing PC:
400054(“Manufacturer”)


	
 

	
 


	
 

	


ELECTRAMECCANICA VEHICLES CORP., ( “EMV”),Suite 102
East 1st Avenue, Vancouver, British Columbia, Canada, V5T
1A4


	
 

	
 







 



Recitals:


 



WHEREAS EMV has expended considerable time, effort, and resources
in the business of designing, manufacturing and selling electronic
vehicles; and


 


EMV在设计、


 



WHEREAS the Manufacturer desires to manufacture the Products and
represents to EMV that Manufacturer has sufficient expertise,
resources, and personnel to perform its obligations under this
Agreement; and


 



WHEREAS EMV desires to have Manufacturer act as a manufacturer of
the Products on the terms and conditions set forth
herein.


 


EMV。


 



Therefore, in consideration of the mutual covenants and promises
contained herein, the parties hereto agree as follows:


 


 



* Confidential treatment has been requested for certain portions of
this Exhibit. The confidential portions of this Exhibit have been
omitted and filed separately with the Securities and Exchange
Commission. Such portions have been marked with “****”
at the exact place where material has been omitted.


 



1


 




 








 






 


 



1. DEFINITIONS


 



“GAAP” means International Accounting Standards
as promulgated by the International Accounting Standards Board
consistently applied.


 



“Lead-time” is defined as the amount of time between
Manufacturer receiving an order and EMV receipt of the goods
ordered. The ordering processes are listed in
Section 4.


 



"Products" shall mean the electric vehicle
named Solo, together with any accompanying documentation,
packaging, or other materials identified (if any). The parties may
add or delete Products on mutual agreement.


 



"Proprietary
Rights" shall mean all rights
of EMV and its licensors in the Products including, without
limitation and whether registered or
unregistered other
than as required under this agreement,
copyright, patent, design patent, trademark, trade dress, trade
secret, and publicity rights, arising under applicable law and
international conventions.


 



“Purchase
Order” means a written
order submitted by EMV to purchase a specific quantity of a Product
or Products in accordance with this Agreement. Each Purchase Order
shall include the quantity and type of Products to be manufactured
and purchased; the unit price; the Product revision level;
scheduled delivery dates; and “sold to,” “invoice
to,” and “ship to” address.


 



"Specifications"
means the functional, appearance, fit-and-finish and performance
specifications (including,without
limitation, bills of materials, schematic diagrams, and Product,
component and assembly drawings) relating to the
testing and manufacturing of each confirmed Product by both parties
as provided in writing by EMV to
the Manufacturer from time
to time.


 


"Territory"
shall be defined as the People’s Republic of
China。


 



2. MANUFACTURING


 



2.1 Manufacturing
License


 



License to Specifications.
Subject to the terms of this Agreement, subject to Manufacturer
meeting EMV’s requirements for quality, price and
lead-time, EMV hereby grants Manufacturer an exclusive,
non-transferable, license (without the right to sublicense) under
EMV's Proprietary Rights
in the Territory, during the term of this Agreement, to use the
Specifications solely for the purpose of manufacturing the
Products to fulfil
Purchase Orders for EMV.


 


 



* Confidential treatment has been requested for certain portions of
this Exhibit. The confidential portions of this Exhibit have been
omitted and filed separately with the Securities and Exchange
Commission. Such portions have been marked with “****”
at the exact place where material has been omitted.


 



2


 




 








 






 


 



License to EMV Firmware.
Subject to the terms of this Agreement, subject to Manufacturer
meeting EMV’s requirements for quality, price and
lead-time, EMV hereby grants Manufacturer an exclusive,
non-transferable, license (without the right to sublicense) under EMV's
Proprietary Rights in the Territory, during the term of this
Agreement, to copy the EMV firmware as may be provided by EMV from
time to time onto Product units in the manufacturing process at
each EMV-approved Manufacturer manufacturing
facility.


 



Subject to the terms of this Agreement, EMV grants to Manufacturer
and Manufacturer accepts, for the term of this Agreement, the right
to manufacture the Products only in the Territory as necessary to
fulfil Purchase Orders for Products made by EMV,
provided that such manufacturing is at Manufacturer's own cost for
the purchase of the components of each order as well as assembling
cost for finished products and in accordance with this
Agreement.


 



2.2 Specifications


 



2.2.1 Specification


 


EMV
shall provide the Manufacturer with the Specifications of the
Product pursuant to the terms of this Agreement, including 2D
drawing of the components (including material, surface treatment,
quality standard and testing item etc.), 3D drawing (including
detailed structure design), and the Manufacturer shall implement
development and manufacturing of the Product only in accordance
with the Specifications. In addition, EMV shall provide the
Manufacturer with the performance testing criteria and items for
the vehicle.


 



2.2.2


 



Manufacturer shall keep detailed manufacturing records for all
units manufactured. Manufacturer's manufacturing records shall be
available to EMV during spot checks and site
inspections pursuant to Section 2.4, and upon request
to allow EMV to provide such information to certification
authorities as may be required.


 



2.2.3


 


Manufacturer
agrees not to alter the Products from the Specifications (including
without limitation their packaging) without EMV's prior written
consent. EMV agrees not to alter the Products produced by
Manufacturer (including, without limitation their packaging)
without Manufacturer’s prior written consent.


 


 



* Confidential treatment has been requested for certain portions of
this Exhibit. The confidential portions of this Exhibit have been
omitted and filed separately with the Securities and Exchange
Commission. Such portions have been marked with “****”
at the exact place where material has been omitted.


 



3


 




 








 






 


 



2.2.4


 



Manufacturer warrants to EMV that the Products assembled or
manufactured by Manufacturer will (i) conform in all respects
to their Specifications; (ii) will be merchantable, of good
material and workmanship, with respect to such assembly or
manufacture under normal use and service for three (3) years from
the manufacture and assembly of the Products, not including
the easily worn parts, list to be confirmed by both
parties.


 



2.3 Preferred Vendors


 



For the key components, including battery, motor, controller, the
Manufacturer shall provide the optional vendors list to EMV
according to the capability of the vendors in the Territory. EMV
shall specify in writing the preferred vendors list for specific
component parts for each of the Products, which may also differ by
market based on required standards for such markets. Manufacturer
shall acknowledge such preferred vendor component list in writing
and warrants that for each component for which preferred vendors
are specified such components shall only be sourced
from the preferred vendors specified by EMV for each
component. Upon an update of the preferred vendor component list by
either party, EMV and the Manufacture will negotiate and agree to
the updated vendor as well as price and lead time for the
Product(s) based on any such sourcing changes.


 


For the
components which are not key components, by its sole discretion,
the Manufacturer can determine the vendors list according to the
capability of the vendors and warrant the vendors can meet the
manufacturing standard of EMV.


 



2.4 Testing
and Inspections


 



Spot Testing. Upon prior
written notice to Manufacturer, EMV or its authorized
representative(s) may conduct spot functional tests of the Products
at Manufacturer's facility at which Products are being manufactured
during Manufacturer's normal business hours. The parties will
mutually agree upon the timing of such investigations, which will
be conducted in such a manner as not to unduly interfere with
Manufacturer's operations. If any Products fail any part of the
test procedure set forth on the Specifications, EMV may require
such Products to be rejected, and Manufacturer will promptly take
all steps necessary to correct such failures at its
expense.


 



Site Inspections. Upon prior
written notice to Manufacturer, and subject to the confidentiality
provisions herein, EMV will have the right to perform on-site
inspections at Manufacturer's manufacturing facilities and
Manufacturer will fully cooperate with EMV in that regard at
mutually agreed upon times. If an inspection or test is made on
Manufacturer's premises, Manufacturer will provide EMV's inspectors
with reasonable assistance at no additional charge. In the event
that any on-site inspection of the Products indicates that the
Products do not conform to the requirements of this Agreement,
Manufacturer will not ship such Products until such nonconformity
has been cured and only Products meeting the conformance criteria
may be shipped.


 


 



* Confidential treatment has been requested for certain portions of
this Exhibit. The confidential portions of this Exhibit have been
omitted and filed separately with the Securities and Exchange
Commission. Such portions have been marked with “****”
at the exact place where material has been omitted.


 



4


 




 








 






 


 



2.5 Quality
Assurance


 



Quality Plan. Manufacturer will
establish, maintain and manage a quality assurance program for the
Products that is reasonable for the industry and sufficient to
achieve compliance with the Specifications. The parties will
prepare a final product quality evaluation form, and the Products
will not be shipped until the parties jointly inspect the quality
and complete such forms.


 



2.6 Engineering
Changes.


 



ECOs. Either EMV or
Manufacturer may, from time to time, submit written requests to the
other, for engineering change orders ("ECOs") for changes to the Products. ECOs will include
documentation of the change to effectively support an investigation
of the impact of the engineering change. The Parties agree to
discuss the ECO within one month following the request for the ECO.
The parties agree that 1 month is a reasonable time
period to permit Manufacturer to
evaluate ECO impact regarding potential excess manufacturing costs
and price, if any, and non-recurring costs, if
any.


 



No Changes. No changes will be
made to the Products without EMV's prior written consent and no
approved change will be made effective prior to the date approved
by EMV in writing. Manufacturer will not change or modify the
processes for the Products without EMV's prior written consent.
Manufacturer will reimburse EMV for all expenses incurred by EMV to
qualify changes to such materials or processes that are undertaken
by Manufacturer without EMV's prior written
consent.


 



2.7 Limitations


 



Title to all Proprietary Rights shall at all times be and remain
with EMV and its licensors. Except as expressly authorized by EMV
in writing, Manufacturer will not, and will legally require its
employees and agents not to: (i) modify, translate, reverse
engineer, decompile, disassemble, create derivative works of or
copy EMV Products or related documentation; (ii) remove, alter, or
cover any copyright or trademark notices or other proprietary
rights notices placed by EMV on or in the Products.


 



2.8 Exclusivity


 


The
manufacturing license granted in this Agreement is exclusive within
the Territory.


 



2.9 Packaging,
Advertising and Promotion


 



Manufacturer shall include the information provided by EMV in the
packaging in which the Products are sold and shall modify any of
the packaging if requested by EMV.


 



2.10 Reserved
Rights


 



Except as expressly provided in this Agreement, EMV does not grant
any right to Manufacturer to (a) use, copy, or display (except for
promotional purposes) the Products; (b) assign, sublicense, or
otherwise transfer its rights or delegate its obligations under
this Agreement or any of the rights, licenses, Products, or
materials to which it applies; or (c) modify, amend, alter or
otherwise vary the Products.


 


 



* Confidential treatment has been requested for certain portions of
this Exhibit. The confidential portions of this Exhibit have been
omitted and filed separately with the Securities and Exchange
Commission. Such portions have been marked with “****”
at the exact place where material has been omitted.


 



5


 




 








 






 


 


 



3. SHARING OF INVESTMENT
投资的分摊


 



3.1 Each of EMV and Manufacturer shall be responsible for certain
expenses, for the purposes of carrying out the development of
Products, in the following manner:


 


	


Activity

	


Contribution (In Percentage)


	


EMV

	


Manufacturer


	


Design and Development Costs


 

	


****%

	


****%


	


Manufacturing equipment (including improvement on existing
equipment)

	
 

	


****%


	


Road Test and Laboratory Tests


 

	


****% by EMV for all the road test & laboratory test
during R&D stage before finalizing design of overall vehicle
and parts by EMV

	


****% by Manufacturer for all the road test & laboratory
test during mass production stage to reach the technical standard
after finalizing design of overall vehicle and parts by
EMV.


 


	

Homologation
fees for vehicle and spare parts

	


****% for EMV’s market.


 

	

 



****% for Manufacturer’s market.


 


	


Mould & tooling cost

	


****%

	


****%







 



3.2 The
investment of production preparation


 


The
Manufacturer will review and consider the Specifications and the
Products provided by EMV, and shall deliver to EMV a list and
estimated expense of all necessary equipment, mould, tooling, and
performance experiments. Manufacturer will not purchase or develop
any such equipment, mould or tooling, and EMV shall bear no such
related expense, until EMV has approved of such estimated
expenses.


 


 



* Confidential treatment has been requested for certain portions of
this Exhibit. The confidential portions of this Exhibit have been
omitted and filed separately with the Securities and Exchange
Commission. Such portions have been marked with “****”
at the exact place where material has been omitted.


 



6




 








 






 


 



3.3


 



Both parties agree with the following timetable for the payment of
the mould & tooling cost:


	


Item

	


Percentage to be paid by EMV


	


When Manufacturer begins making mould & tooling


 

	


 50 % of the total mould & tooling cost



50%


	


When Manufacturer completes mould & tooling


 

	


 40 % of the total mould & tooling cost


 


	


Delivery of the 1st serial production order


 

	


 10% of the total mould & tooling cost


 







 



3.4 Target Purchase Volume


 



Under this Agreement, subject to Manufacturer meeting EMV’s
requirements for quality, price and lead-time and being granted the
manufacturing license hereunder, the minimum purchase volume of the
Product (Solo) is 50,000 units within the period of three (3) years
(calendar year of 2018, 2019, 2020). In case that EMV fails to
reach the target volume within the specified period of the
agreement, EMV shall reimburse the Manufacturer the investment of
the equipment by the percentage of unachieved volume.


 


In
addition, during the valid period of this agreement, EMV guarantee
the annual purchase volume will be not less than the purchase
volume of the previous year.


 



4. FORECASTS AND PURCHASE
ORDERS


 



4.1 Forecasts.


 


On a
periodic basis, EMV shall provide Manufacturer with a
latest _6_month rolling forecast of Product requirements
(“Forecast”), as currently anticipated pursuant to
Exhibit A.


 


 



* Confidential treatment has been requested for certain portions of
this Exhibit. The confidential portions of this Exhibit have been
omitted and filed separately with the Securities and Exchange
Commission. Such portions have been marked with “****”
at the exact place where material has been omitted.


 



7


 




 








 






 



4.2 Purchase
Orders.


 



EMV will order Products by issuing Purchase Orders to Manufacturer.
Each Purchase Order will include, at a minimum,
quantities of Product required and the price and
Lead-time/requested delivery dates. Manufacturer will confirm
whether receipt of, and accept, all Purchase Orders conforming
hereto within seven
(_7_) business days of receipt for the orders started
from the 2nd quarter of
2018. The Manufacturer may need more time to confirm the trial
orders at the 1st quarter
of 2018. Manufacturer shall base such confirmations on its
manufacturing capability and spare reasonable business efforts to
satisfy all Purchase Orders that substantially conform with the
most recent Forecast issued by
EMV.


 



For purposes of this Agreement, Purchase Orders must be submitted
to Manufacturer, either via mail or electronic mail, to
the following address:


 


CHONGQING
ZONGSHEN AUTOMOBILE INDUSTRY CO., LTD.


Zongshen
Industry Zone Ba’nan District, Chongqing CHINA


400054


Email:
●


Phone:
+86 ●


Mobile:
+86 ●


 



Manufacturer will notify EMV for any change of the mailing address,
email address and the sales coordinator.


 



4.3 Manufacturer
Assessment


 



Based on the Forecast, EMV and Manufacturer shall meet at least
quarterly to set and update mutually agreeable key performance
targets in a variety of areas including, without
limitations, annual pricing, Lead-time, quality
and on-time delivery. EMV shall
evaluate Manufacturer’s performance against such targets and
the parties shall agree corrective actions.


 



4.4 Response
Time.


 



Manufacturer shall make commercially reasonable efforts to
manufacture and deliver Products in accordance with the Purchase
Orders issued by EMV. If Manufacturer is unable to meet the
delivery schedule set forth in a Purchase Order,
Manufacturer shall notify EMV within_seven (_7_) business
days following EMV’s
issuance of such Purchase Order. If Manufacturer subsequently
becomes aware of circumstances that may lead to delays in delivery,
Manufacturer shall notify EMV as soon as reasonably
possible.


 



The Manufacturer will make commercially reasonable efforts to
deliver Products on or prior to the delivery date indicated on the
Purchase Order (the “Delivery
Target”). In order for a
Product to be included as an on time delivery each Product needs to
also meet all Specifications. The assessment of whether the
Delivery Target has been achieved shall be calculated on a per
shipment basis.


 


 



* Confidential treatment has been requested for certain portions of
this Exhibit. The confidential portions of this Exhibit have been
omitted and filed separately with the Securities and Exchange
Commission. Such portions have been marked with “****”
at the exact place where material has been omitted.


 



8


 




 








 






 


 



4.5 Order
Adjustments.


 



4.5.1 Order Quantity
Adjustment


 



After Manufacturer’s acceptance of Purchase Order, in case of
order quantity adjustment within the lead time set forth
in each Purchase Order,
EMV shall inform Manufacturer in written form as soon as reasonably
possible. Manufacturer will use commercially reasonable efforts to
meet increases/decreases requested by EMV, and will quote any
applicable charges resulting from changes in
costs associated with such quantity adjustment
following the issuance of a Purchaser Order. EMV shall bear such
charges, subject to an updated Purchase Order being signed by both
parties.


 



4.5.2 Order
Specification Adjustment


 


After
Manufacturer’s acceptance of Purchase Order, in case of order
specification adjustment within the lead time set forth in each
Purchase Order, EMV shall inform Manufacturer in written form as
soon as reasonably possible. Manufacturer will use commercially
reasonable efforts to meet changes requested by EMV, and will quote
any applicable charges resulting from changes in costs and lead
time associated with such specification adjustment. EMV shall bear
such charges, subject to an updated Purchase Order being signed by
both parties. In the event that any such specification adjustment
results in Manufacturer accumulating stock, which is no longer
suitable for use by Manufacturer in mass production, EMV shall
reimburse the costs actually incurred by Manufacturer.


 


 



4.6 Rescheduling
of Delivery Date


 



EMV may reschedule the delivery of Products by sending Manufacturer
a written change order pursuant to the schedule set forth
in each Purchase Order.
Manufacturer agrees to use commercially reasonable efforts to
accommodate requests for rescheduling (acceleration and delay), and
before accepting such rescheduling requests, will quote any
applicable charges resulting from changes in costs associated with
such rescheduling, which charges shall be the sole
responsibility of EMV, subject to an updated Purchase Order being
signed by both parties.


 



4.7 Cancellations


 



In the event that EMV desires to cancel some quantity of Products
ordered under a Purchase Order, Manufacturer shall, upon receipt of
such written notice, stop work to the extent specified
therein. EMV agrees to pay
Manufacturer for completed work
and work-in-process, under the same terms and conditions as set out
in section 5 below, that cannot be used to fill other orders,
including Manufacturer’s costs for actual and reasonable
labor and supplies incurred pursuant to Purchase Orders [up to the
date of receipt of notice of cancellation].


 


 



* Confidential treatment has been requested for certain portions of
this Exhibit. The confidential portions of this Exhibit have been
omitted and filed separately with the Securities and Exchange
Commission. Such portions have been marked with “****”
at the exact place where material has been omitted.


 



9


 




 








 






 


 


 



4.8 Cancellation
Documentation


 



Manufacturer will provide EMV with documentation adequate to
support such claim for cancellation charges. Notwithstanding the
foregoing, EMV shall have no obligation to pay cancellation charges
where cancellations are the result of any failure of Manufacturer
to perform its obligations under this Agreement. Upon payment of
the cancellation charges, all Products, components,
work-in-process, non-useable, and non-returnable/non-cancelable
components in-house or on order shall become the property of EMV.
Upon the request of EMV, all such Products, components, and
work-in-process shall be shipped to EMV in accordance with the
shipment terms below. The parties should use commercially
reasonable efforts to resolve any disagreement for the cancellation
charges or cancellation issues.


 



5. COMMERCIAL
CLAUSE


 



5.1 Invoices and
Payment


 



5.1.1 EMV shall pay 30% of total amount of a Purchase Order as a
deposit after Manufacturer receives EMV’s order, and then
Manufacturer shall schedule the production.



5.1.2 Manufacturer will invoice EMV for Products net ten (10) days
from when the parties sign the Quality Evaluation Form to confirm
delivery of Products.



5.1.3 EMV shall pay 70% of total amount of a Purchase Order within
ten (10) days of receipt of Manufacturer’s invoice as
provided in Section 5.1.2 above.



5.1.4 The product settlement shall be in Chinese Yuan.


 



5.2 Pricing


 


The
price of Products will be determined by both parties at the
beginning of each calendar year.


 


The
Manufacturer shall have the right to make modifications to Product
pricing during a given year when the prices of raw materials,
within the order cycle, experience massive variations in prices
(massive variations in prices refer to the monthly average price
changes of five main raw materials: steel, aluminum, copper,
composite materials, engineering plastics exceed 5% from window
query of Chinese futures trading), upon providing EMV with not less
than sixty (60) days’ notice of such price change, provided
that no such price changes will apply to any Purchase Order already
submitted by EMV at such time, or within such sixty (60) day
period.


 


Subject
to the above, if there is a change on export tax policy in China,
the Manufacturer shall inform EMV in writing as soon as possible
and both parties shall confirm any price changes and Purchase
Orders which will be applied with new price prior to any change in
price being effective.


 


 



* Confidential treatment has been requested for certain portions of
this Exhibit. The confidential portions of this Exhibit have been
omitted and filed separately with the Securities and Exchange
Commission. Such portions have been marked with “****”
at the exact place where material has been omitted.


 



10


 




 








 






 


 


 



5.3 Packaging and
Shipping.


 



Manufacturer shall package each Product in accordance with
EMV’s Specifications, or, if not specified by EMV, in
accordance with generally accepted commercial standards. All
shipments made by Manufacturer to EMV or to EMV’ customers
shall be in accordance with the shipping term stated in EMV’s
Purchase Order. Shipments will be made in accordance with
EMV’s specific routing instructions, including method of
carrier to be used. EMV shall be responsible for all shipping costs
resulting from the shipment of Products in accordance with its
Purchase Orders.


 



5.4 Taxes.


 



EMV shall be responsible for customs taxes or duties resulting from
the sale or shipment of Products in accordance with its Purchase
Orders.



Manufacturer shall be responsible for value added, sales and use or
similar taxes levied by the Peoples Republic of China resulting
from the acquisition of components used in the manufacture of
Products in accordance with the Purchase Orders.


 



5.5 Shipping
Reports.


 



Manufacturer shall provide written shipping reports to EMV for each
delivery. Such reports shall include information concerning all
shipments of Products on that day, including type of Products,
quantities, and name/address of shipping destination.


 



5.6 Inspection and
Claim


 



EMV has the right to examine the goods on arrival and has Fifteen
(15) business days to notify Manufacturer of any claim for
damages on account of the condition, grade or quality of the goods,
or non-conformity to the Specifications. The notice must set forth
the basis of the claim in reasonable detail. EMV acknowledges that
failure to notify Manufacturer of a claim within specified period
in reasonable detail shall constitute acceptance of the
goods.



Within 15 working days upon receiving the Claim Notice from EMV,
the Manufacturer shall analyze and respond to the Claim. The
Manufacturer shall promptly replace or repair, at its sole expense,
any defective Products arising from the assembly or manufacturing
by the Manufacturer due to failure of the set Standard and
Specification within the Product Warranty Period,
including without limitations related shipping
expenses. The replacement parts are preferred to be shipped by vessel together with
the next shipment of mass production order. Shipment by air will be
confirmed by both parties in emergency case.


 


 



* Confidential treatment has been requested for certain portions of
this Exhibit. The confidential portions of this Exhibit have been
omitted and filed separately with the Securities and Exchange
Commission. Such portions have been marked with “****”
at the exact place where material has been omitted.


 



11


 


 




 








 






 


 



6. MARKETING REGIONS 销售区域



 


EMV and
the Manufacturer agree that the Manufacturer will be responsible
for marketing of the Products in the region of Asia (India not
included).


 


Within
Japan, the Manufacturer will supply the components to any assembler
appointed by EMV, subject to any further agreement to be negotiated
in good faith by both parties to specify details.



 



7. INTELLECTUAL PROPERTY



 



7.1 Ownership


 


EMV
represents and warrants to the Manufacturer that it has title
and/or right to use and to license the Proprietary Rights to the
Manufacturer hereunder.



 



7.2 EMV Liability



 


EMV
shall protect, defend, hold harmless, indemnify and reimburse
Manufacturer from and against any liability, cost or expense
arising from a claim that the Products constitute an infringement
of any third party’s intellectual property right or any other
right. In the event that any suit, action involving any claim
against Manufacturer based upon the use hereunder of drawings and
technical information provided by EMV, Manufacturer shall notify
EMV within ten( 10) business days in written form. EMV shall bear
all costs, including, without limitations attorneys’ fees,
and damages finally awarded against Manufacturer or any amount paid
in settlement which is attributable to any such allegation or
claim.


 



* Confidential treatment has been requested for certain portions of
this Exhibit. The confidential portions of this Exhibit have been
omitted and filed separately with the Securities and Exchange
Commission. Such portions have been marked with “****”
at the exact place where material has been omitted.


 



12


 




 








 






 


 


 



8. TERMINATION



 



8.1 Term


 


This
Agreement shall have a term of four (4) years from the effective
date first set forth above, and shall automatically renew for
additional one year terms unless earlier terminated by either
party.



 



8.2 Termination


 


EMV may
terminate this Agreement in the event the Manufacturer fails to
achieve satisfactory assessments in two consecutive assessments
conducted in accordance with section 4.3 and the Manufacturer has
failed to take corrective action to substantially meet the
performance targets agreed by EMV and the
Manufacturer within180 days of the second
assessment.


 


Either
party may terminate this Agreement in the event of a material
breach of the Agreement provided such breach is not remedied within
_sixty_ (_60_) calendar days following delivery of notice of such
breach.


 



8.3 Automatic Termination


  


This
Agreement shall be terminated automatically, without notice, (i)
upon the institution by or against either party of insolvency,
receivership or bankruptcy proceedings, (ii) upon either parties
making an assignment for the benefit of creditors, or (iii) upon
either parties dissolution.


 



8.4 Effect of Termination


 


Upon
the termination of this Agreement by either party: (i) the rights
and licenses granted to Manufacturer pursuant to this Agreement
(including, without limitation the right to manufacture) will
automatically cease; (ii) all payments owing from EMV to
Manufacturer shall become immediately due and payable upon
termination; (iii) all EMV trademarks, marks, trade names, patents,
copyrights, designs, drawings, formulae or other data, photographs,
samples, literature, and sales aids of every kind shall remain the
property of EMV; and (iv) within sixty (_60_) business days after the
termination of this Agreement, Manufacturer shall prepare all such
items in its possession for shipment, as EMV may direct, at EMV's
expense. Manufacturer shall not make or retain any copies of any
confidential items or information which may have been entrusted to
it.


 



8.5 Survival Provisions


 


If this
Agreement is terminated for any reason, those provisions which by
their nature would survive such termination, including without
limitations section 9 and section 10, will survive termination.
Termination shall not affect any other rights which either party
may have at law or in equity.


 



9. CONFIDENTIALITY


 



9.1 Definitions


 


For
purposes of this Agreement, "Confidential Information" of a party
means information or materials disclosed or otherwise provided by
such party ("Disclosing Party") to the other party ("Receiving
Party") that are marked or otherwise identified as confidential or
proprietary, or which are known or ought to be known to be their
nature or the nature of disclosure to be confidential.


Without
limitation of the generality of the foregoing, and notwithstanding
any exclusions described below, "Confidential Information" of EMV
includes the EMV Proprietary Rights, including any portion thereof,
modifications and derivatives thereof, and information or materials
derived therefrom.


 


  



* Confidential treatment has been requested for certain portions of
this Exhibit. The confidential portions of this Exhibit have been
omitted and filed separately with the Securities and Exchange
Commission. Such portions have been marked with “****”
at the exact place where material has been omitted.


 



13


 


 




 








 






 


 



9.2 Use of Confidential Information


 


The
Receiving Party shall not use Confidential Information of the
Disclosing Party for any purpose other than in furtherance of this
Agreement and the activities described herein. The Receiving Party
shall not disclose Confidential Information of the Disclosing Party
to any third parties except as otherwise permitted hereunder. The
Receiving Party may disclose Confidential Information of the
Disclosing Party only to those employees, contractors or
consultants who have a need to know such Confidential Information
and who are bound to retain the confidentiality thereof under
provisions (including, without limitation, provisions relating to
non-use and nondisclosure) no less strict than those required by
the Receiving Party for its own comparable Confidential
Information. The Receiving Party shall maintain Confidential
Information of the Disclosing Party with at least the same degree
of care it uses to protect its own proprietary information of a
similar nature or sensitivity, but no less than reasonable care
under the circumstances. Any copies of the Disclosing Party's
Confidential Information shall be identified as belonging to the
Disclosing Party and prominently marked
"Confidential."


 



9.3 Exemptions


 


Notwithstanding
the foregoing, the Receiving Party’s confidentiality
obligations will not apply to Confidential Information which (i) is
already in the Receiving Party’s possession at the time of
disclosure to the Receiving Party, (ii) is or becomes part of
public knowledge other than as a result of any action or inaction
of the Receiving Party, (iii) is obtained by the Receiving Party
from an unrelated third party without a duty of confidentiality, or
(iv) is independently developed by the Receiving
Party.


 



9.4 Judicial Action


 


This
Agreement will not prevent the Receiving Party from disclosing
Confidential Information of the Disclosing Party to the extent
required by a judicial order or other legal obligation, provided
that, in such event, the Receiving Party shall promptly notify the
Disclosing Party to allow intervention (and shall cooperate with
the Disclosing Party) to contest or minimize the scope of the
disclosure (including application for a protective order). Each
party shall advise the other party in writing of any
misappropriation or misuse of Confidential Information of the other
party of which the notifying party becomes aware.


 



9.5 Remedies


 


Each
party (as Receiving Party) acknowledges that the Disclosing Party
considers its Confidential Information to contain trade secrets of
the Disclosing Party and that any unauthorized use or disclosure of
such information would cause the Disclosing Party irreparable harm
for which its remedies at law would be inadequate. Accordingly,
each party (as Receiving Party) acknowledges and agrees that the
Disclosing Party shall be entitled, in addition to any other
remedies available to it at law or in equity, to the issuance of
injunctive relief, without bond, enjoining any breach or threatened
breach of the Receiving Party's obligations hereunder with respect
to the Confidential Information of the Disclosing Party, and such
further relief as any court of competent jurisdiction may deem just
and proper.


 


 



* Confidential treatment has been requested for certain portions of
this Exhibit. The confidential portions of this Exhibit have been
omitted and filed separately with the Securities and Exchange
Commission. Such portions have been marked with “****”
at the exact place where material has been omitted.


 



14


 


 




 








 






 


 



9.6 Expiration of Agreement


 


Upon
(i) the expiration of this Agreement or termination of this
Agreement by mutual agreement of the parties, or (ii) termination
of the Manufacturer's rights under Section 8, above, each party (as
Receiving Party) shall immediately return to the Disclosing Party
all Confidential Information of the Disclosing Party embodied in
tangible (including electronic) form, or, at the option of the
Disclosing Party, certify in writing to the Disclosing Party that
all such Confidential Information has been destroyed.


 



9.7 Exceptions


 


Each
party agrees that the terms and conditions of this Agreement shall
be treated as Confidential Information of the other party; provided
that each party may disclose the terms and conditions of this
Agreement: (i) as required by judicial order or other legal
obligation, provided that, in such event, the party subject to such
obligation shall promptly notify the other party to allow
intervention (and shall cooperate with the other party) to contest
or minimize the scope of the disclosure (including application for
a protective order); (ii) as required by the applicable securities
laws, including, without limitation, requirements to file a copy of
this Agreement (redacted to the extent reasonably permitted by
applicable law) or to disclose information regarding the provisions
hereof or performance hereunder; (iii) in confidence, to legal
counsel; (iv) in confidence, to accountants, banks, and financing
sources and their advisors; and (v) in confidence, in connection
with the enforcement of this Agreement or any rights hereunder; and
(vi) in confidence (on a counsel-only basis), to outside counsel
for a third party which plans to acquire all or substantially all
the equity or assets of, or to merge with, such party, in
connection with a "due diligence" investigation for such a
transaction.


 



9.8 Reverse Engineering


 


The
Manufacturer shall not disassemble, decompile or otherwise reverse
engineer the Product unless for failure mode analysis
investigation.


 



10. GENERAL TERMS


 



10.1 Non-assignability and Binding Effect


 


Neither
Party shall assign any of its rights or obligations under this
Agreement to any third party directly or indirectly without the
prior written consent of the other Party. Subject to the foregoing,
this Agreement shall be binding upon and inure to the benefit of
the parties hereto, their successors and assigns.


 


 



* Confidential treatment has been requested for certain portions of
this Exhibit. The confidential portions of this Exhibit have been
omitted and filed separately with the Securities and Exchange
Commission. Such portions have been marked with “****”
at the exact place where material has been omitted.


  



15


 


 




 








 






 


 



10.2 Notices


 


Notices
under this Agreement shall be sufficient only if personally
delivered, delivered by a major commercial rapid delivery courier
service, or E-mail and other digital communication system , with
return receipt requested, to a party at its address first set forth
above or as amended by notice pursuant to this subsection. If not
received sooner, notice by any of these methods shall be deemed to
occur _seven_(7)
business days after deposit.


 



10.3 Compliance with Local Laws


Manufacturer
will comply with all applicable laws, restrictions and regulations
in the Peoples Republic of China. EMV will comply with all
applicable laws, restrictions and regulations in
Canada.


 



10.4 Arbitration and Governing Law


 


All
disputes arising out of or in connection with this contract, or in
respect of any defined legal relationship associated therewith or
derived therefrom, shall be referred to and finally resolved by
administered by the Hong Kong International Arbitration Centre
(HKIAC) under the UNCITRAL Arbitration Rules in force when the
Notice of Arbitration is submitted, as modified by the HKIAC
Procedures for the Administration of International Arbitration. The
place of arbitration shall be Hong Kong.This Agreement shall be
governed by and construed under the laws of Hong Kong without
regard to choice of laws principles. The language of arbitration
shall be English


 



10.5 Partial Invalidity


 


If any
provision of this Agreement is held to be invalid, then the
remaining provisions shall nevertheless remain in full force and
effect, and the invalid or unenforceable provision shall be
replaced by a term or provision that is valid and enforceable and
that comes closest to expressing the intention of such invalid or
unenforceable term or provision.


 



10.6 No Agency


 


The
parties hereto are independent contractors. Nothing contained
herein or done in pursuance of this Agreement shall constitute
either party the agent of the other party for any purpose or in any
sense whatsoever, or constitute the parties as partners or joint
venturers.


 



10.7 No Waiver


 


No
waiver of any term or condition of this Agreement shall be valid or
binding on either party unless the same shall have been mutually
assented to in writing by both parties. The failure of either party
to enforce at any time any of the provisions of this Agreement, or
the failure to require at any time performance by the other party
of any of the provisions of this Agreement, shall in no way be
construed to be a present or future waiver of such provisions, nor
in any way effect the ability of either party to enforce each and
every such provision thereafter.


 


 



* Confidential treatment has been requested for certain portions of
this Exhibit. The confidential portions of this Exhibit have been
omitted and filed separately with the Securities and Exchange
Commission. Such portions have been marked with “****”
at the exact place where material has been omitted.


 



16


 




 








 






 


 



10.8 No Publicity


 



Either party, or any entity or representative acting on behalf of
the Party, shall not refer to the other party, the Products and
information furnished pursuant to the provisions of this contract
in any press release or commercial advertising, or in connection
with any news release or commercial advertising, without first
obtaining explicit written consent to do so from the other party.
The party, within 2 working days upon receiving the request for
publicity from the other party, shall reply the other
party.


 



10.9 Force Majeure


 


Non-performance
by either party shall be excused to the extent that performance is
rendered impossible by strike, fire, flood, earthquake, or
governmental acts, orders or restrictions; provided that the party
unable to so perform uses commercially reasonable efforts to
mitigate the impact of such non-performance. Notwithstanding any
such efforts, any such non-performance shall be cause for
termination of this Agreement by the other party if the
non-performance continues for more than six (6)
months.


 



10.10 Attorneys' Fees


 


The
prevailing party in any legal action brought by one party against
the other and arising out of this Agreement shall be entitled, in
addition to any other rights and remedies it may have, to
reimbursement for its expenses, including costs and reasonable
attorneys' fees.


 



10.11 Entire Agreement


 


This
Agreement sets forth the entire agreement and understanding of the
parties relating to the subject matter herein and merges all prior
discussions between them. No modification of or amendment to this
Agreement, nor any waiver of any rights under this Agreement, shall
be effective unless in writing signed by the parties.


 



10.12 Counterparts


 


This
Agreement may be executed in two or more counterparts and all
counterparts so executed shall for all purposes constitute one
agreement, binding on all parties hereto.


 



10.13 Language & Text


 


This
Agreement is made out in Chinese and English, both of which are of
the same legal effect. Where any inconsistency occurs in account of
the interpretation of these two texts, the English text shall be
deemed superior.


 



10.14 Effectiveness


 


This
agreement shall come into effect immediately when it is signed by
duly authoried representatives of both parties.


  



[Signature Page Follows]


 


 



* Confidential treatment has been requested for certain portions of
this Exhibit. The confidential portions of this Exhibit have been
omitted and filed separately with the Securities and Exchange
Commission. Such portions have been marked with “****”
at the exact place where material has been omitted.


 


17


 




 








 






 


 


IN
WITNESS WHEREOF, each party to this agreement has caused it to be
executed on the date indicated above.


 


 


 



ELECTRAMECCANICA VEHICLES
CORP.


 



s/ Jerry Kroll


Name:
Jerry Kroll


Title:
CEO and General Manager


 



CHONGQING ZONGSHEN AUTOMOBILE INDUSTRY CO.,
LTD.


 



/s Liu Gang


Name:
LIU GANG  


Title:
Authorized Signatory


 



* Confidential treatment has been requested for certain portions of
this Exhibit. The confidential portions of this Exhibit have been
omitted and filed separately with the Securities and Exchange
Commission. Such portions have been marked with “****”
at the exact place where material has been omitted.


 



18


 


 




 








 






 


 


 



EXHIBIT A



3-YEAR PRODUCTION CAPACITY FORECAST


 


 


	
 

	


Total


	


2018

	


5000


	


2019

	


20000


	


2020

	


50000


	


Total

	


75000







 


1. At
the 1st stage, the facility & equipment is planned to be
equipped according to 30,000 units/year as production
capability.


 


2.
Production capability can be adjusted to 50,000 units/year or even
more according to market demand at the 2nd stage.


 


3. The
investment on facility & equipment at the 1st stage will
be discussed and confirmed according to the Development
Timetable.


 


 



* Confidential treatment has been requested for certain portions of
this Exhibit. The confidential portions of this Exhibit have been
omitted and filed separately with the Securities and Exchange
Commission. Such portions have been marked with “****”
at the exact place where material has been omitted.


 


19


 


 




 








 






 


 


 


	


Exhibit B


	


SOLO DEVELOPMENT TIMETABLE


	


Ref no.

	


Key Activity

	


Responsible party

	


Output

	


Target Finish Date

	


Remarks


	


1

	


Optimize design on 3D data

	


ZS

	


Evaluation report on 3D data

	


****

	
 


	


2

	


First round CAE analysis on optimized 3D data

	


ZS

	


CAE analysis report

	


****

	
 


	


3

	


Confirm suppliers

	


ZS

	


Suppliers list

	


****

	
 


	


4

	


Calculation on cost, including vehicle’s components cost,
tooling cost, testing cost on vehicle and components

	


ZS

	


List of vehicle’s components cost, toolings cost, vehicle and
components test cost

	


****

	
 


	


5

	


Improvement & modification on optimized 3D design and second
round CAE analysis

	


ZS

	


3D data, evaluation report and CAE analysis report

	


****

	
 


	


6

	


Prototype and evaluation

	


ZS & EMV

	


3 units of prototype and evaluation report

	


****

	


EMV engineer at ZS for evaluation & confirmation


	


7

	


Molding Sample

	


ZS

	


Sample assembly and evaluation report

	


****

	
 


	


8

	


Performance testing and sample improvement &
modification

	


ZS

	


Testing report & improvement plan

	


****

	
 


	


9

	


Sample homologation

	


EMV

	


Certificate

	


****

	
 


	


10

	


Small batch samples & test

	


ZS

	


1.sample, 2. Test report

	


****

	
 


	


11

	


Improvement & modification on small batch samples

	


ZS

	


Complete technical data after improvement

	


****

	
 


	


12

	


Small batch production

	


ZS

	


10 units sample

	


****

	


****, 10 units for each month


	


Notes:1.
The timetable is based on the arrival date of the sample from EMV.
2. Each item shall be subject to the finish date of the previous
item. 3. Both parties shall try best to find an optimized solution
in case of any problems which may lead to delay of the
project.







 


 



* Confidential treatment has been requested for certain portions of
this Exhibit. The confidential portions of this Exhibit have been
omitted and filed separately with the Securities and Exchange
Commission. Such portions have been marked with “****”
at the exact place where material has been omitted.


 



20