Entry into Pilot Outsourcing Agreement

Southern Charter Financial Group Limited (SNC) would like to update the market that it has successfully entered into the pilot outsourcing agreement with Three Summit Ventures Pte Ltd, the Licensor (Pilot Outsourcing Agreement), and has paid the initial portion of the outsourcing fee of NZD$100,000. As advised in SNC's notice of meeting dated 15 December 2022, the Pilot Outsourcing Agreement was entered into as part of SNC's strategy for the commercialisation of the rights granted under the licence agreement to manufacture and supply a self-cleaning, antimicrobial, surface coating product (Coating Product). The key terms of the Pilot Outsourcing Agreement are the same as the proposed terms set out in the notice of meeting, being: 1. Under the Pilot Outsourcing Agreement, the Licensor will: a. identity and set up the pilot manufacturing facility and equipment; b. enter into and manage any leases for the facility and equipment; c. obtain appropriate licences and permits required for the pilot manufacturing facility; d. identify suppliers for the raw materials needed for production of the Coating Product; e. send the manufactured products to an independent, accredited, third-party laboratory for any required certifications before sale of the Coating Product, including in relation to ISO22196 (Measurement of antibacterial activity on plastics and other non-porous surfaces) and ISO21702 (Measurement of antiviral activity on plastics and other non-porous surfaces); and f. recruit and train all core personnel, including a General Manager and sales and marketing personnel. 2. In consideration, SNC will pay a fixed fee of approximately NZD$300,000 per annum towards the renting of the Facilities and a fixed fee of approximately NZD$100,000 per annum for the engagement of the Licensor to carry out the services listed above including the engagement of core personnel. Invoices under the Pilot Outsourcing Agreement will be payable in 30-day instalments. 3. A commission of 30% of gross profit is payable by SNC to the Licensor on each successful sale of the Coating Product, payable to the Licensor on SNC receiving payment in full from a customer. 4. The Licensor will be under an obligation to report regularly regarding the commercialisation and manufacturing progress of Coating Product against the deliverables in the Pilot Outsourcing Agreement. 5. SNC has the ability to terminate the Pilot Outsourcing Agreement at any time, with prior notice to the Licensor, with no break fees. The setup of the pilot manufacturing facility is underway and is scheduled to commence commercial manufacturing this year. SNC will update the market again in due course. ENDS End CA:00407079 For:SNC Type:MKTUPDTE Time:2023-02-21 10:57:21