Document:

ex-99.1

 NEITHER THIS NOTE NOR THE SECURITIES THAT MAY BE ISSUED BY THE COMPANY UPON CONVERSION HEREOF (COLLECTIVELY, THE "SECURITIES") HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THE SECURITIES NOR ANY INTEREST OR PARTICIPATION THEREIN MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED: (1) IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE 1933 ACT, OR APPLICABLE STATE SECURITIES LAWS; OR (11) IN THE ABSENCE OF AN OPINION OF COUNSEL, IN A FORM ACCEPTABLE TO THE ISSUER, THAT REGISTRATION IS NOT REQUIRED UNDER THE 1933 ACT OR; (111) UNLESS SOLD, TRANSFERRED OR ASSIGNED PURSUANT TO RULE 144 UNDER THE 1933 ACT.
 

 10% CONVERTIBLE PROMISSORY NOTE
 

 MATURITY DATE OF APRIL 13, 2019 *THE "MATURITY DATE"
 

 $200,000 APRIL 13, 2018 *THE "ISSUANCE DATE"
 

 FOR VALUE RECEIVED, Spindle, Inc., a Nevada Corporation (the "Company") doing business in Mesa, Arizona , hereby promises to pay to the order of Labrys Fund, LP, an accredited investor and Delaware limited partnership, or its assigns (the "Holder"), the principal amount of Two Hundred Thousand Dollars ($200,000) ("Note"), on demand of the Holder at any time on or after April 13, 2019 (the "Maturity Date"), and to pay interest on the unpaid principal balance hereof at the rate of Ten Percent (10%) per annum (the "Interest Rate") commencing on the date hereof (the "Issuance Date"). This Note carries an original issue discount of $20,000.00 (the "OID"), to cover the Holder's accounting fees, due diligence fees, monitoring, and/or other transactional costs incurred in connection with the purchase and sale of the Note, which is included in the principal balance of this Note. Thus, the purchase price of this Note shall be $180,000.00, computed as follows : the Principal Amount minus the OID.
 

 1.
 Payments of Principal and Interest.
 

 a.
 Pre-Payment and Payment of Principal and Interest. The Company may pay this Note in full, together with any and all accrued and unpaid interest, plus any applicable pre-payment premium set forth herein and subject to the terms of this Section 1.a, at any time on or prior to the date which occurs 180 days after the Issuance Date hereof (the "Prepayment Date"). In the event the Note is not prepaid in full on or before the Prepayment Date, it shall be deemed a "Pre-Payment Default" hereunder. Until the Ninetieth (90th) day after the Issuance Date the Company may pay the principal at a cash redemption premium of 120%, in addition to outstanding interest, without the Holder's consent ; from the 91st day to the One Hundred and Twentieth (120th) day after the Issuance Date, the Company may pay the principal at a cash redemption premium of 125%, in addition to outstanding interest, without the Holder's consent; from the 121st day to the Prepayment Date, the Company may pay the principal at a cash redemption premium of 130%, in addition to outstanding interest, without the Holder's consent. After the Prepayment Date up to the Maturity Date this Note shall have a cash redemption premium of 135% of the then outstanding principal amount of the Note, plus accrued interest and Default Interest, if any, which may only be paid by the Company upon Holder's prior written consent. At any time on or after the Maturity Date, the Company may repay the then outstanding principal plus accrued interest and Default Interest (defined below), if any, to the Holder.
 

 b.
 Demand of Repayment. The principal and interest balance of this Note shall be paid to the Holder hereof on demand by the Holder at any time on or after the Maturity Date. The Default Amount (defined herein), if applicable, shall be paid to Holder hereof on demand by the Holder at any time such Default Amount becomes due and payable to Holder.
 

 

 

 
 

 c.
 Interest. This Note shall bear interest ("Interest") at the rate of Ten Percent (10%) per annum from the Issuance Date until the same is paid, or otherwise converted in accordance with Section 2 below, in full and the Holder, at the Holder's sole discretion , may  include any accrued but unpaid Interest in the Conversion Amount. Interest shall commence accruing on the Issuance Date, shall be computed on the basis of a 365-day year and the actual number of days elapsed and shall accrue daily and, after the Maturity Date, compound quarterly . Upon an Event of Default, as defined in Section 10 below, the Interest Rate shall increase to Eighteen Percent (18%) per annum for so long as the Event of Default is continuing ("Default Interest").
 

 d.
 General Payment Provisions. This Note shall be paid in lawful money of the United States of America by check or wire transfer to such account as the Holder may from time to time designate by written notice to the Company in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a Business Day (as defined below), the same shall instead be due on the next succeeding day which is a Business Day and, in the case of any interest payment date which is not the date on which this Note is paid in full , the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. For purposes of this Note, "Business Day" shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the State of Massachusetts are authorized or required by law or executive order to remain closed.
 

 2.
 Conversion of Note. At any time after the Pre-payment Date, the Conversion Amount (see Paragraph 2(a)(i)) of this Note shall be convertible into shares of the Company's common stock (the "Common Stock") according to the terms and conditions set forth in this Paragraph 2.
 

 a
 Certain Defined Terms. For purposes of this Note, the following terms shall have the following meanings:
 

 "Conversion Amount" means the sum of (a) the principal amount of this Note to be converted with respect to which this determination is being made, (b) Interest; and (c) Default Interest, if any, if so included at the Holder's sole discretion.
 

 i.
 "Conversion Price" means a 35% discount to the lowest trading price during the previous twenty (20) trading days to the date of a Conversion Notice.
 

 i.
 "Person" means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.
 

 iv.
 "Shares" means the Shares of the Common Stock of the Company into which any balance on this Note may be converted upon submission of a "Conversion Notice" to the Company substantially in the form attached hereto as Exhibit 1.
 

 b.
 Holder's Conversion Rights. At any time after the Pre-payment Date, the Holder shall be entitled to convert all of the outstanding and unpaid principal and accrued interest of this Note into fully paid and non-assessable shares of Common Stock in accordance with the stated Conversion Price. The Holder shall not be entitled to convert on a Conversion Date that amount of the Note in connection with that number of shares of Common Stock which would be in excess of the sum of the number of shares of Common Stock issuable upon the conversion of the Note with respect to which the determination of this provision is being made on a Conversion Date, which would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock of the Company on such Conversion Date.
 

 

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 For the purposes of the provision to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder. Subject to the foregoing, the Holder shall not be limited to aggregate conversions of 4.99% ("Conversion Limitation 1"). The Holder shall have the authority to determine whether the restriction contained in this Section 21bl will limit any conversion hereunder, and accordingly, the Holder may waive the conversion limitation described in this Section 21b), in whole or in part, upon and effective after 61 days prior written notice to the Company to increase or decrease such percentage to any other amount as determined by Holder in its sole discretion ("Conversion Limitation 2").
 

 c.
 Fractional Shares. The Company shall not issue any fraction of a share of Common Stock upon any conversion; if such issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share except in the event that rounding up would violate the conversion limitation set forth in section 2(b) above.
 

 d.
 Conversion Amount. The Conversion Amount shall be converted pursuant to Rule 144(b)(1)(ii) and Rule 144(d)(1)(ii) as promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended, into unrestricted shares at the Conversion Price.
 

 e.
 Mechanics of Conversion. The conversion of this Note shall be conducted in the following manner:
 

 Holder's Conversion Requirements. To convert this Note into shares of Common Stock on any date set forth in the Conversion Notice by the Holder (the "Conversion Date"), the Holder shall transmit by email, facsimile or otherwise deliver, for receipt on or prior to 11:59 p.m., Eastern Time, on such date or on the next business day, a copy of a fully executed notice of conversion in the form attached hereto as Exhibit 1 to the Company.
 

 i.
 Company's Response. Upon receipt by the Company of a copy of a Conversion Notice, the Company shall as soon as practicable, but in no event later than one (1) Business Day after receipt of such Conversion Notice, send, via email, facsimile or overnight courier, a confirmation of receipt of such Conversion Notice to such Holder indicating that the Company will process such Conversion Notice in accordance with the terms herein. Within two (2) Business Days after the date the Conversion Notice is delivered, the Company shall have issued and electronically transferred the shares to the Broker indicated in the Conversion Notice; should the Company be unable to transfer the shares electronically, it shall, within two (2) Business Days after the date the Conversion Notice was delivered, have surrendered to an overnight courier for delivery the next day to the address as specified in the Conversion Notice, a certificate , registered in the name of the Holder, for the number of shares of Common Stock to which the Holder shall be entitled.
 

 i.
 Record Holder. The person or persons entitled to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date.
 

 iv.
 Timely Response by Company. Upon receipt by Company of a Conversion Notice, Company shall respond within one business day to Holder confirming the details of the Conversion, and provide within two business days the Shares requested in the Conversion Notice.
 

 

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 v.
 Liquidated Damages for Delinquent Response. If the Company fails to deliver for whatever reason (including any neglect or failure by, e.g., the Company, its counsel or the transfer agent) to Holder the Shares as requested in a Conversion Notice within three (3) business days of the Conversion Date, the Company shall be deemed in "Default of Conversion." Beginning on the fourth (41h) business day after the date of the Conversion Notice, after the Company is deemed in Default of Conversion , there shall accrue liquidated damages (the "Conversion Damages") of $2,000 per day for each day after the third business day until delivery of the Shares is made, and such penalty will be added to the Note being converted (under the Company's and Holder's expectation and understanding that any penalty amounts will tack back to the Issuance Date of the Note). The Parties agree that, at the time of drafting of this Note, the Holder's damages as to the delinquent response are incapable or difficult to estimate and that the liquidated damages called for is a reasonable forecast of just compensation.
 

 vi.
 Liquidated Damages for Inability to Issue Shares. If the Company fails to deliver Shares requested by a Conversion Notice due to an exhaustion of authorized and issuable common stock such that the Company must increase the number of shares of authorized Common Stock before the Shares requested may be issued to the Holder, the discount set forth in the Conversion Price will be increased by 5 percentage points (i.e. from 35% to 40%) for the Conversion Notice in question and all future Conversion Notices until the outstanding principal and interest of the Note is converted or paid in full. These liquidated damages shall not render the penalties prescribed by Paragraph 2(e)(v) void, and shall be applied in conjunction with Paragraph 2(e)(v) unless otherwise agreed to in writing by the Holder. The Parties agree that, at the time of drafting of this Note, the Holder's damages as to the inability to issue shares are incapable or difficult to estimate and that the liquidated damages called for is a reasonable forecast of just compensation.
 

 vii.
 Rescindment of Conversion Notice. If: (i) the Company fails to respond to Holder within one business day from the date of delivery of a Conversion Notice confirming the details of the Conversion, (ii) the Company fails to provide the Shares requested in the Conversion Notice within three business days from the date of the delivery of the Conversion Notice, (iii) the Holder is unable to procure a legal opinion required to have the Shares issued unrestricted and/or deposited to sell for any reason related to the Company's standing with the SEC or FINRA, or any action or inaction by the Company, (iv) the Holder is unable to deposit the Shares requested in the Conversion Notice for any reason related to the Company's standing with the SEC or FINRA, or any action or inaction by the Company , (v) if the Holder is informed that the Company does not have the authorized and issuable Shares available to satisfy the Conversion , or (vi) if OTC Markets changes the Company's designation to 'Limited Information' (Yield), 'No Information' (Stop Sign), 'Caveat Emptor' (Skull and Crossbones) , or 'OTC', 'Other OTC' or 'Grey Market' (Exclamation Mark Sign) on the day of or any day after the date of the Conversion Notice, the Holder maintains the option and sole discretion to rescind the Conversion Notice ("Rescindment") by delivering a notice of rescindment to the Company in the same manner that a Conversion Notice is required to be delivered to the Company pursuant to the terms of this Note.
 

 

 

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 vii.
 Transfer Agent Fees and Legal Fees. The issuance of the certificates shall be without charge or expense to the Holder. The Company shall pay any and all Transfer Agent fees, legal fees, and advisory fees required for execution of this Note and processing of any Notice of Conversion, including but not limited to the cost of obtaining a legal opinion with regard to the Conversion. The Holder will deduct $2,000 from the principal payment of the Note solely to cover the cost of obtaining any and all legal opinions required to obtain the Shares requested in any given Conversion Notice. These fees do not make provision for or suffice to defray any legal fees incurred in collection or enforcement of the Note as described in Paragraph 13. All expenses incurred by Holder, for the issuance and clearing of the Common Stock into which this Note is convertible into, shall immediately and automatically be added to the balance of the Note at such time as the expenses are incurred by Holder.
 

 ix.
 Conversion Right Unconditional. If the Holder shall provide a Notice of Conversion as provided herein, the Company's obligations to deliver Common Stock shall be absolute and unconditional, irrespective of any claim of setoff, counterclaim, recoupment, or alleged breach by the Holder of any obligation to the Company.
 

 3.
 Other Rights of Holder: Reorganization, Reclassification, Consolidation, Merger or Sale. Any recapitalization, reorganization , reclassification, consolidation , merger, sale of all or substantially all of the Company's assets to another Person or other transaction which  is effected in such a way that holders of Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock , securities , cash or other assets with respect to or in exchange for Common Stock is referred to herein as "Organic Change." Prior to the consummation of any (i) Organic Change or (ii) other Organic Change following which the Company is not a surviving entity, the Company will secure from the Person purchasing such assets or the successor resulting from such Organic Change (in each case, the "Acquiring Entity") a written agreement (in form and substance reasonably satisfactory to the Holder) to deliver to Holder in exchange for this Note, a security of the Acquiring Entity evidenced by a written instrument substantially similar in form and substance to this Note, and reasonably satisfactory to the Holder. Prior to the consummation of any other Organic Change, the Company shall make appropriate provision (in form and substance reasonably satisfactory to the Holder) to ensure that the Holder will thereafter have the right to acquire and receive in lieu of or in addition to (as the case may be) the shares of Common Stock immediately theretofore acquirable and receivable upon the conversion of the Note, such shares of stock, securities , cash or other assets that would have been issued or payable in such Organic Change with respect to or in exchange for the number of shares of Common Stock which would have been acquirable and receivable upon the conversion of the Note as of the date of such Organic Change (without taking into account any limitations or restrictions on the convertibility of the Note set forth in Section 2(b) or otherwise) . All provisions of this Note must be included to the satisfaction of Holder in any new Note created pursuant to this section.
 

 4.
 Representations and Warranties of the Company. In connection with the transactions provided for herein, the Company hereby represents and warrants to the Holder the following:
 

 a.
 Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation and has all requisite corporate power and authority to carry on its business as now conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on its business or properties.
 

 

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 b.
 Authorization. All corporate action has been taken on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement. The Company has taken all corporate action required to make all of the obligations of the Company reflected in the provisions of this Agreement, valid and enforceable obligations. The shares of capital stock issuable upon conversion of the Note have been authorized or will be authorized prior to the issuance of such shares.
 

 c.
 Fiduciary Obligations. The Company hereby represents that it intends to use the proceeds of the Note primarily for the operations of its business and not for any personal, family, or household purpose. The Company hereby represents that its board of directors, in the exercise of its fiduciary duty, has approved the execution of this Agreement based upon a reasonable belief that the proceeds of the Note provided for herein is appropriate for the Company after reasonable inquiry concerning its financial objectives and financial situation.
 

 5.
 Note Subordination. So long as the Company shall have any obligations under this Note, this note shall be considered subordinate to the $223,000 convertible promissory note with an issuance dated of October 17, 2017 and held by Michael Kelly, a director of the Company.
 

 6.
 Reservation of Shares. The Company shall at all times, so long as any principal amount of the Note is outstanding , reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the conversion of the Note, eight times the number of shares of Common Stock as shall at all times be sufficient to effect the conversion of all of the principal amount, plus Interest and Default Interest, if any, of the Note then outstanding ("Share Reserve"), unless the Holder stipulates otherwise in the "Irrevocable Letter of Instructions to the Transfer Agent. " So long as this Note is outstanding , upon written request of the Holder or via telephonic communication , the Company's Transfer Agent shall furnish to the Holder the then­ current number of common shares issued and outstanding , the then-current number of common shares authorized, the then­ current number of unrestricted shares, and the then-current number of shares reserved for third parties.
 

 7.
 Voting Rights. The Holder of this Note shall have no voting rights as a note holder, except as required by law, however, upon the conversion of any portion of this Note into Common Stock, Holder shall have the same voting rights as all other Common Stock holders with respect to such shares of Common Stock then owned by Holder.
 

 8.
 Reissuance of Note. In the event of a conversion or redemption pursuant to this Note of less than all of the Conversion Amount represented by this Note, the Company shall promptly cause to be issued and delivered to the Holder, upon tender by the Holder of the Note converted or redeemed, a new note of like tenor representing the remaining principal amount of this Note which has not been so converted or redeemed and which is in substantially the same form as this Note, as set forth above.
 

 9.
 Default and Remedies.
 

 a.
 Event of Default. For purposes of this Note, an "Event of Default" shall occur upon:
 

 the Company 's default in the payment of the outstanding principal, Interest or Default Interest of this Note when due, whether at Maturity, acceleration or otherwise ;
 

 i.
 the occurrence of a Default of Conversion as set forth in Section 2(e)(v) ;
 

 iii.
 the failure by the Company for ten (10) days after notice to it to comply with any material provision of this Note not included in this Section 10(a);
 

 iv.
 the Company's breach of any covenants, warranties, or representations made by the Company herein;
 

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 v.
 any of the information in the ORF is false or misleading in any material respect;
 

 vi.
 the default by the Company in any Other Agreement entered into by and between the Company and Holder, for purposes hereof "Other Agreement" shall mean, collectively , all agreements and instruments between, among or by: (1) the Company, and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including without limitation, promissory notes;
 

 vii.
 the cessation of operations of the Company or a material subsidiary;
 

 viii.
 the Company pursuant to or within the meaning of any Bankruptcy Law; (a) commences a voluntary case; (b) consents to the entry of an order for relief against it in an involuntary case; (c) consents to the appointment of a Custodian of it or for all or substantially all of its property; (d) makes a general assignment for the benefit of its creditors; or (e) admits in writing that it is generally unable to pay its debts as the same become due;
 

 ix.
 court of competent jurisdiction entering an order or decree under any Bankruptcy Law that: (a) is for relief against the Company in an involuntary case; (b) appoints a Custodian of the Company or for all or substantially all of its property; or (c) orders the liquidation of the Company or any subsidiary, and the order or decree remains unstayed and in effect for thirty (30) days;
 

 x.
 the Company files a Form 15 with the SEC;
 

 xi.
 the Company's failure to timely file all reports required to be filed by it with the Securities and Exchange Commission;
 

 xi.
 the Company's failure to timely file all reports required to be filed by it with OTC Markets to remain a "Current Information" designated company;
 

 xii.
 the Company's Common Stock is reported as "No Inside" by OTC Markets at any time while any principal, Interest or Default Interest under the Note remains outstanding;
 

 xiv.
 the Company's failure to maintain the required Share Reserve pursuant to the terms of the Irrevocable Letter of Instructions to the Transfer Agent;
 

 xv.
 the Company directs its transfer agent not to transfer , or delays, impairs, or hinders its transfer agent in transferring or issuing (electronically or in certificated form) any certificate for Shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw and stop transfer instructions) on any certificate for any Shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement , statement or threat that it does not intend to honor its obligations pursuant to a Conversion Notice submitted by the Holder) and any such failure shall continue uncured for three (3) Business Days after the Conversion Notice has been delivered to the Company by Holder;
 

 xvi.
 the Company's failure to remain current in its billing obligations with its transfer agent and such delinquency causes the transfer agent to refuse to issue Shares to Holder pursuant to a Conversion Notice;
 

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 xvii.
 the Company effectuates a reverse split of its Common Stock and fails to provide twenty (20) days prior written notice to Holder of its intention to do so; or
 

 xviii.
 OTC Markets changes the Company's designation to 'No Information' (Stop Sign), 'Caveat Emptor' (Skull and Crossbones), or 'OTC', 'Other OTC' or 'Grey Market' (Exclamation Mark Sign
 

 The Term "Bankruptcy Law" means Title 11, U.S. Code, or any similar Federal or State Law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.
 

 b.
 Remedies. If an Event of Default occurs, the Holder may in its sole discretion determine to request immediate repayment of all or any portion of the Note that remains outstanding; at such time the Company will be required to pay the Holder the Default Amount (defined herein) in cash. For purposes hereof, the "Default Amount" shall mean: the product of (A) the then outstanding principal amount of the Note, plus accrued Interest and Default Interest, divided by (B) the Conversion Price as determined on the Issuance Date, multiplied by (C) the highest price at which the Common Stock traded at any time between the Issuance Date and the date of the Event of Default. If the Company fails to pay the Default Amount within five (5) Business Days of written notice that such amount is due and payable, then Holder shall have the right at any time, so long as the Company remains in default (and so long and to the extent there are a sufficient number of authorized but unissued shares) , to require the Company , upon written notice, to immediately issue, in lieu of the Default Amount , the number of shares of Common Stock of the Company equal to the Default Amount divided by the Conversion Price then in effect.
 

 10.
 Vote to Change the Terms of this Note. This Note and any provision hereof may only be amended by an instrument in writing signed by the Company and the Holder.
 

 11.
 Lost or Stolen Note. Upon receipt by the Company of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of an indemnification undertaking by the Holder to the Company in a form reasonably acceptable to the Company and, in the case of mutilation, upon surrender and cancellation of the Note, the Company shall execute and deliver a new Note of like tenor and date and in substantially the same form as this Note; provided, however, the Company shall not be obligated to re-issue a Note if the Holder contemporaneously requests the Company to convert such remaining principal amount, plus accrued Interest and Default Interest, if any, into Common Stock.
 

 12.
 Payment of Collection, Enforcement and Other Costs. If: (i) this Note is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding; or (ii) an attorney is retained to represent the Holder of this Note in any bankruptcy, reorganization, receivership or other proceedings affecting creditors' rights and involving a claim under this Note, then the Company shall pay to the Holder all reasonable attorneys' fees, costs and expenses incurred in connection therewith , in addition to all other amounts due hereunder.
 

 13.
 Cancellation. After all principal, accrued Interest and Default Interest, if any, at any time owed on this Note has been paid in full or otherwise converted in full, this Note shall automatically be deemed canceled , shall be surrendered to the Company for cancellation and shall not be reissued.
 

 14.
 Waiver of Notice. To the extent permitted by law, the Company hereby waives demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note.
 

 

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 15.
 Governing Law. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the laws of the State of Nevada, without giving effect to provisions thereof regarding conflict of laws. Each party hereby irrevocably submits to the non-exclusive jurisdiction of the state and federal courts sitting in Commonwealth of Massachusetts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by sending , through certified mail or overnight courier, a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof . Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
 

 16.
 Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note, at law or in equity (including a decree of specific performance and/or other injunctive relief), and no remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit the Holder's right to pursue actual damages for any failure by the Company to comply with the terms of this Note. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder thereof and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof).
 

 17.
 Specific Shall Not Limit General; Construction. No specific provision contained in this Note shall limit or modify any more general provision contained herein. This Note shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any person as the drafter hereof.
 

 18.
 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude further exercise thereof or of any other right, power or privilege.
 

 19.
 Partial Payment. In the event of partial payment by the Holder, the principal sum due to the Holder shall be prorated based on the consideration actually paid by the Holder such that the Company is only required to repay the amount funded and the Company is not required to repay any unfunded portion of this Note, with the exception of any OID contemplated herein.
 

 20.
 Entire Agreement. This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subjects herein. None of the terms of this Agreement can be waived or modified, except by an express agreement signed by all Parties hereto.
 

 21.
 Additional Representations and Warranties. The Company expressly acknowledges that the Holder, including but not limited to its officer, directors , employees , agents, and affiliates , have not made any representation or warranty to it outside the terms of this Agreement. The Company further acknowledges that there have been no representations or warranties about future financing or subsequent transactions between the parties.
 

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 22.
 Notices. All notices and other communications given or made to the Company pursuant hereto shall be in writing (including facsimile or similar electronic transmissions) and shall be deemed effectively given: (i) upon personal delivery, (ii) when sent by electronic mail or facsimile, as deemed received by the close of business on the date sent, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery. All communications shall be sent either by email, or fax, or to the email address or facsimile number set forth on the signature page hereto. The physical address, email address, and phone number provided on the signature page hereto shall be considered valid pursuant to the above stipulations; should the Company's contact information change from that listed on the signature page, it is incumbent on the Company to inform the Holder.
 

 23.
 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the rest of the Agreement shall be enforceable in accordance with its terms.
 

 24.
 Usury. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it will not seek to claim or take advantage of any law that would prohibit or forgive the Company from paying all or a portion of the principal, Interest or Default Interest on this Note.
 

 25.
 Successors and Assigns. This Agreement shall be binding upon all successors and assigns hereto.
 

 

 

 

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 IN WITNESS WHEREOF, the Company has caused this Note to be signed by its CEO, on and as of the Issuance Date.
 

 

 	 	
	 Spindle, Inc.
	  

	  
	  

	 Signature:
	 /s/ Jack Scott

	  
	  

	 By:
	 Jack Scott

	  
	  

	 Title:
	 CEO

	  
	  

	 Address:
	  

	  
	 Mesa, AZ 85210

	  
	  

	 Email:
	 jscott@spindle.com

	  
	  

	 Phone:
	 800-560-9198

	  
	  

	 Facsimile:
	 480-999-5598

	  
	  

	  
	  

	 LABRYS FUND, LP
	  

	  
	  

	 By:
	 /s/ Thomas Silverman

	  
	  

	 Name:
	 Thomas Silverman

	  
	  

	 Title:
	 Managing Member

 

 

 

 

 	 	
	 Aggregate Principal Amount of Note:
	 US$200,000.00

	  
	  

	 Aggregate Purchase Price:
	 US$180 ,000.00

 

 

 

 

 

 

 

 

 

 

 

 

 11
 

 
 

 Exhibit 1
 Conversion Notice
 

 Reference is made to the 10% Convertible Note issued by Spindle, Inc. (the "Note"), dated April 13, 2018 in the principal amount of $200,000 with 10% interest. This note currently holds a principal balance of $200,000. The features of conversion stipulate a Conversion Price equal to a 35% discount to the lowest trading price during the previous twenty (20) trading days to the date of a Conversion Notice.
 

 In accordance with and pursuant to the Note, the undersigned hereby elects to convert $_____ of the principal/interest balance of the Note, indicated below into shares of Common Stock (the "Common Stock"), of the Company , by tendering the Note specified as of the date specified below.
 

 Date of Conversion: ________________
 

 Please confirm the following information: Conversion Amount: $____________________
 

 Conversion Price: $________________ (_____% discount from $_____________________ )
 

 Number of Common Stock to be issued: __________________________
 

 Current Issued/Outstanding: ____________________________________
 

 If the Issuer is DWAC eligible, please issue the Common Stock into which the Note is being converted in the name of the Holder of the Note and transfer the shares electronically to:
 

 [BROKER INFORMATION]
 

 Holder Authorization:
 

 

 

 

 

 [DATE]
 

 

 

 

 

 

 

 

 

 [CONTINUED ON NEXT PAGE]
 

 

 

 

 12
 

 
 

 PLEASE BE ADVISED, pursuant to Section 2(e)(ii) of the Note, "Upon receipt by the Company of a copy of the Conversion Notice, the Company shall as soon as practicable, but in no event later than one (1) Business Day after receipt of such Conversion Notice, SEND, VIA EMAIL, FACSIMILE OR OVERNIGHT COURIER, A CONFIRMATION OF RECEIPT OF SUCH CONVERSION NOTICE TO SUCH HOLDER INDICATING THAT THE COMPANY WILL PROCESS SUCH CONVERSION NOTICE in accordance with the terms herein. Within two (2) Business Days after the date of the Conversion Confirmation, the Company shall have issued and electronically transferred the shares to the Broker indicated in the Conversion Notice; should the Company be unable to transfer the shares electronically, they shall, within two (2) Business Days after the date of the Conversion Confirmation, have surrendered to FedEx for delivery the next day to the address as specified in the Conversion Notice, a certificate , registered in the name of the Holder, for the number of shares of Common Stock to which the Holder shall be entitled."
 

 

 Spindle, Inc.
 

 /s/ Jack Scott
 Jack Scott
 CEO
 Spindle, Inc.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 13Blueprint

 

 

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

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