Entry into Pilot Outsourcing Agreement

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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