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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): October 9, 2023

 

 

 

ELECTRAMECCANICA VEHICLES CORP.

(Exact name of registrant as specified in its charter)

 

 

 

British Columbia, Canada 001-38612 98-1485035
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)

 

6060 Silver Drive

Third Floor
Burnaby
, British Columbia, Canada

 
V5H 0H5
(Address of principal executive offices)   (Zip Code)

 


Registrant’s telephone number, including area code: (604) 428-7656

 

Not applicable
(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Shares, no par value SOLO The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company  ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨

 

 

 

 

 

 

Item 5.02Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

Departure of Mark Orsmond as Chief Financial Officer

 

On October 12, 2023, ElectraMeccanica Vehicles Corp. (the “Company”) announced that Mark Orsmond is no longer serving as the Company’s Chief Financial Officer, effective October 9, 2023, and will be departing the Company. Mr. Orsmond had been serving as the Company’s principal financial officer and principal accounting officer.

 

Pursuant to Mr. Orsmond’s employment agreement with the Company, dated August 22, 2022 (the “Orsmond Employment Agreement”), Mr. Orsmond is entitled to certain payments and benefits, including (i) all accrued and unpaid statutory holiday and vacation pay (if any), salary, and expense reimbursement, up to and including the Date of Termination (as defined in the Orsmond Employment Agreement); (ii) an amount equal to 13 months’ salary; (iii) benefits for 12 months from the Date of Termination; and (iv) the opportunity to exercise any unexercised and fully vested portion of any options on the Date of Termination any time during the 12 months thereafter. In accordance with the Orsmond Employment Agreement, Mr. Orsmond will be required to enter into an agreement providing for a general release of claims in favor of the Company as a condition precedent to receiving any payments or benefits under the Orsmond Employment Agreement.

 

Additionally, on October 11, 2023, the Company and Orsim Finance Ltd (“Orsim”) entered into a consulting services agreement, effective October 13, 2023, pursuant to which Mr. Orsmond, an employee of Orsim, will provide certain consulting and transitional services to the Company through December 31, 2023, subject to certain excluded periods and termination rights by either party (the “Orsmond Consulting Agreement”). In consideration of the services to be provided by Mr. Orsmond, the Company will pay Orsim a consulting fee of CAN$45,810 per month. Orsim and/or Mr. Orsmond have also agreed to certain covenants regarding confidentiality, non-disparagement, non-solicitation and intellectual property rights.

 

Appointment of Stephen Johnston as Chief Financial Officer

 

In connection with the departure of Mr. Orsmond, on October 9, 2023 (the “Start Date”), the Company appointed Stephen Johnston as the Company’s Chief Financial Officer, effective immediately. Mr. Johnston will serve as the Company’s principal financial officer and principal accounting officer.

 

Mr. Johnston, age 53, joins the Company bringing almost 30 years of diverse, global experience having previously served as a Chief Financial Officer, Corporate Controller, and Chief Accounting Officer, as well as partner of a “Big Four” accounting firm. Since June 2023, Mr. Johnston has provided finance and accounting consulting services to the Company. Prior to joining the Company, Mr. Johnston was the Chief Financial Officer of Ideanomics, Inc. (Nasdaq: IDEX), an international manufacturer of electric powered two- and four-wheel mobility solutions (“Ideanomics”). Prior to Ideanomics, Mr. Johnston was the Chief Financial Officer for Dura Automotive Systems, Inc., a global automotive supplier for highly integrated mechatronic systems, and lightweight structural solutions (“Dura”), with oversight of the financial performance of the company’s 22 plants in 11 countries. Prior to Dura, Mr. Johnston served as the North American Regional Chief Financial Officer for Tower Automotive (NYSE: TOWR), a manufacturer of engineered metal structures and complex welded assemblies for body and chassis. Mr. Johnston is a certified public accountant (CPA) and a member of the Michigan Association of CPAs and the American Institute of CPAs.

 

In connection with Mr. Johnston’s appointment as the Company’s Chief Financial Officer, on October 9, 2023, the Company and Mr. Johnston entered into an executive employment agreement (the “Johnston Employment Agreement”). Unless terminated earlier in accordance with the terms of the Johnston Employment Agreement, Mr. Johnston’s employment will continue until the three-year anniversary of the Start Date (the “Initial Term”) and will automatically renew for additional one-year periods unless either the Company or Mr. Johnston provides notice prior to the end of the then-current term. Pursuant to the terms of the Johnston Employment Agreement, Mr. Johnston is entitled to receive, among other things, the following compensation and benefits:

 

·an annual base salary of $425,000, subject to review and adjustment on an annual basis;

 

 

 

 

·a sign-on grant of restricted stock units (“RSUs”) under the Company’s 2020 Stock Incentive Plan (the “Plan”) covering 300,000 shares of the Company’s common stock, which will vest in three equal annual installments from the grant date, subject to such other terms and conditions set forth in the related RSU award agreement to be entered into between the parties;

 

·eligibility for a 2023 pro rata cash bonus based on his achievement of pre-defined personal objectives with a target incentive bonus of $63,750;

 

·beginning January 1, 2024, eligibility to participate in the Company’s annual cash incentive program, with a target incentive bonus of 60% of his base salary;

 

·beginning January 1, 2024, eligibility to receive grants of restricted shares and performance shares and other awards under the Plan, with the amount of and the mix of such equity awards, the vesting schedule and the other terms and conditions of the awards to be established by the compensation committee of the Company’s board of directors in its sole discretion;

 

·in the event of termination of full-time employment by the Company without Cause (as defined in the Johnston Employment Agreement) or by Mr. Johnston for Good Reason (as defined in the Johnston Employment Agreement), a severance payment equal to the sum of: (i) 12 months of his then base salary, plus one month of his then base salary for every completed year of service (to a maximum of 16 months); (ii) six times the monthly amount that is charged to COBRA qualified beneficiaries for the same medical coverage options elected by Mr. Johnston immediately prior to his last day of employment; and (iii) the greater of (a) the average amount paid to Mr. Johnston under the Company’s annual cash incentive program in the two prior years and (b) 80% of Mr. Johnston’s target under the Company’s annual cash incentive program for the current fiscal year, in addition to a pro-rata amount under the Company’s annual cash incentive program for the year in which the termination occurred; and

 

·upon a Change of Control (as defined in the Johnston Employment Agreement), Mr. Johnston’s RSUs (including the sign-on RSUs) shall immediately vest.

 

Any severance pay and other related benefits due under the Johnston Employment Agreement are subject to the requirement that Mr. Johnston execute (and not revoke) a general release and waiver of any claims in connection with his employment and termination. Pursuant to the Johnston Employment Agreement, Mr. Johnston has also agreed to certain undertakings regarding non-solicitation, non-competition and non-disparagement.

 

There are no arrangements or understandings between Mr. Johnston and any other person pursuant to which he was appointed to serve as the Company’s Chief Financial Officer. There are also no family relationships between Mr. Johnston and any director or executive officer of the Company, and Mr. Johnston does not have a direct or indirect material interest in any “related party” transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

 

The foregoing description of the Orsmond Consulting Agreement and the Johnston Employment Agreement is not intended to be complete and is qualified in its entirety by reference to the full text of the Orsmond Consulting Agreement and the Johnston Employment Agreement, each of which is filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K (this “Current Report”), respectively, and is incorporated herein by reference.

 

Item 7.01Regulation FD Disclosure.

 

On October 12, 2023, the Company released a letter from Susan E. Docherty, the Company’s Chief Executive Officer, to its shareholders. A copy of the letter is attached hereto as Exhibit 99.1 to this Current Report and is incorporated herein by reference.

 

The information furnished in this Item 7.01, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such a filing or document.

 

 

 

 

Item 9.01Financial Statements and Exhibits.

 

(d)Exhibits.

 

Exhibit   
Number  Description
10.1  Independent Contractor Consulting Agreement, dated October 11, 2023, between ElectraMeccanica Vehicles Corp. and Orsim Finance Ltd
    
10.2  Executive Employment Agreement, dated October 9, 2023, between ElectraMeccanica Vehicles Corp. and Stephen Johnston
    
99.1  CEO letter, dated October 12, 2023
    
104  Cover Page Interactive Data File (cover page XBRL tags are embedded within the Inline XBRL document)

 

 
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: October 12, 2023ELECTRAMECCANICA VEHICLES CORP.
    
By: /s/ Michael Bridge
   Michael Bridge
   General Counsel and Corporate Secretary

 

 

 

Exhibit 10.1

 

INDEPENDENT CONTRACTOR CONSULTING AGREEMENT

 

This Consulting Agreement (the “Agreement”) is made and entered into as of October 11, 2023, and is effective as of October 13, 2023 (the “Effective Date”) by and between ElectraMeccanica Vehicles corp., having a business address at 6060 Silver Drive, Third Floor, Burnaby, BC, V5H0H5, Canada (the “Company”), and Orsim Finance Ltd, a company with a business address at 992 Hampshire Road, North Vancouver, V7R1V2, Canada (“Consultant”) (each referred to individually as a “Party,” and collectively as the “Parties”).

 

Whereas the Company desires to retain Consultant as an independent contractor to perform consulting services for the Company; Consultant is in the business of providing such services; and Consultant is willing and able to perform the services herein; on the terms described below and in consideration of the mutual promises contained herein, the Parties agree as follows:

 

1.              Services and Fees

 

Consultant shall perform the services described in Exhibit A (the “Services”) for the Company (or its designee), and the Company agrees to pay Consultant the fees described in Exhibit A for Consultant’s performance of the Services. The Company hereby engages Consultant, and Consultant hereby agrees, to provide the Services during the term of this Agreement, as requested by the Company. Consultant agrees to exercise the highest degree of professionalism and to utilize Consultant’s full expertise and creative talents in performing the Services, and to perform the Services in strict accordance with all applicable laws, rules and regulations.

 

2.              Past Activities

 

A.            Existing Obligations. Consultant represents and warrants that Consultant has no agreements, relationships, or commitments to any other person or entity that conflict with the provisions of this Agreement, Consultant’s obligations to the Company under this Agreement, and/or Consultant’s ability to perform the Services. Consultant will not enter into any such conflicting agreement, relationship or commitment during the term of this Agreement.

 

B.             Applicability to Past Services. Consultant agrees that if and to the extent that Consultant provided any services or made efforts on behalf of or for the benefit of Company, or related to the current or prospective business of Company prior to the Effective Date (the “Prior Period”) in anticipation of Consultant’s involvement with the Company, that would have been “Services” if performed during the term of this Agreement, and to the extent that during the Prior Period: (i) Consultant received access to any information from or on behalf of Company that would have been “Confidential Information” (as defined below) if Consultant had received access to such information during the term of this Agreement; or (ii) Consultant (a) conceived, created, authored, invented, developed or reduced to practice any work (including any intellectual property rights with respect thereto) on behalf of or for the benefit of Company, or related to the current or prospective business of Company, that would have been an “Invention” (as defined below) if conceived, created, authored, invented, developed or reduced to practice during the term of this Agreement; or (b) incorporated into any such item any pre-existing invention, improvement, development, concept, discovery or other proprietary information that would have been a “Prior Invention” (as defined below) if incorporated into such item during the term of this Agreement; then any such information shall be deemed “Confidential Information” hereunder and any such item shall be deemed an “Invention” or “Prior Invention” hereunder, and this Agreement shall apply to such activities, information or item as if disclosed, conceived, created, authored, invented, developed or reduced to practice during the term of this Agreement. Consultant further acknowledges that Consultant has been fully compensated for all services provided during any such Prior Period. In any event, Consultant agrees that the fees under this Agreement is good and valuable consideration for the transfer to the Company of all title, rights and ownership in and to the work product resulting from any and all services provided by Consultant to the Company during any Prior Period.

 

 

 

 

3.              Confidentiality

 

A.            Definition of Confidential Information.Confidential Information” means any information (including any and all combinations of individual items of information) that relates to the actual or anticipated business and/or products, research or development of the Company, its affiliates or subsidiaries, or to the Company’s, its affiliates’ or subsidiaries’ technical data, trade secrets, or know-how, including, but not limited to, research, product plans, or other information regarding the Company’s, its affiliates’ or subsidiaries’ products or services and markets therefor, customer lists and customers (including, but not limited to, customers of the Company on whom Consultant called or with whom Consultant became acquainted during the term of this Agreement), software, developments, inventions, discoveries, ideas, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances, personal information, employee personal information, and other business information disclosed by the Company, its affiliates or subsidiaries, either directly or indirectly, in writing, orally or by drawings or inspection of premises, parts, equipment, or other property of Company, its affiliates or subsidiaries. Notwithstanding the foregoing, Confidential Information shall not include any such information which Consultant can establish (i) was publicly known or made generally available prior to the time of disclosure to Consultant; (ii) becomes publicly known or made generally available after disclosure to Consultant through no wrongful action or inaction of Consultant; or (iii) is in the rightful possession of Consultant, without confidentiality obligations, at the time of disclosure as shown by Consultant’s then-contemporaneous written records; provided that any combination of individual items of information shall not be deemed to be within any of the foregoing exceptions merely because one or more of the individual items are within such exception, unless the combination as a whole is within such exception.

 

B.             Non-use and Non-disclosure. During and after the term of this Agreement, Consultant will hold in the strictest confidence, and take all reasonable precautions to prevent any unauthorized use or disclosure of Confidential Information, and Consultant will not (i) use the Confidential Information for any purpose whatsoever other than as necessary for the performance of the Services on behalf of the Company, or (ii) disclose the Confidential Information to any third party without the prior written consent of an authorized representative of Company. Consultant may also disclose Confidential Information to the extent compelled by applicable law; provided however, prior to such disclosure, Consultant shall provide prior written notice to Company and seek a protective order or such similar confidential protection as may be available under applicable law. Consultant agrees that no ownership of Confidential Information is conveyed to the Consultant. Without limiting the foregoing, Consultant shall not use or disclose any Company property, intellectual property rights, trade secrets or other proprietary know-how of the Company to invent, author, make, develop, design, or otherwise enable others to invent, author, make, develop, or design identical or substantially similar designs as those developed under this Agreement for any third party. Consultant agrees that Consultant’s obligations under this Section 3.B shall continue after the termination of this Agreement.

 

C.             Other Client Confidential Information. Consultant agrees that Consultant will not improperly use, disclose, or induce the Company to use any proprietary information or trade secrets of any third party with which Consultant has an obligation to keep in confidence. Consultant also agrees that Consultant will not bring onto the Company’s premises or transfer onto the Company’s technology systems any unpublished document, proprietary information, or trade secrets belonging to any third party unless disclosure to, and use by, the Company has been consented to in writing by such third party.

 

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D.            Third Party Confidential Information. Consultant recognizes that the Company has received and in the future will receive from third parties their personal, confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. Consultant agrees that at all times during the term of this Agreement and thereafter, Consultant owes the Company and such third parties a duty to hold all such confidential or proprietary information in the strictest confidence and not to use it or to disclose it to any person, firm, corporation, or other third party except as necessary in carrying out the Services for the Company consistent with the Company’s agreement with such third party.

 

4.              Ownership

 

A.             Assignment of Inventions. Consultant agrees that all right, title, and interest in and to any copyrightable material, notes, records, drawings, designs, inventions, improvements, developments, discoveries, ideas and trade secrets conceived, discovered, authored, invented, developed or reduced to practice by Consultant, solely or in collaboration with others, during the term of this Agreement and arising out of, or in connection with, performing the Services under this Agreement and any copyrights, patents, trade secrets, mask work rights or other intellectual property rights relating to the foregoing (collectively, “Inventions”), are the sole property of the Company. Consultant also agrees to promptly make full written disclosure to the Company of any Inventions and to deliver and assign (or cause to be assigned) and hereby irrevocably assigns fully to the Company all right, title and interest in and to the Inventions.

 

B.             Pre-Existing Materials. Subject to Section 4.A, Consultant will provide the Company with prior written notice if, in the course of performing the Services, Consultant incorporates into any Invention or utilizes in the performance of the Services any invention, discovery, idea, original works of authorship, development, improvements, trade secret, concept, or other proprietary information or intellectual property right owned by Consultant or in which Consultant has an interest, prior to, or separate from, performing the Services under this Agreement (“Prior Inventions”), and the Company is hereby granted a nonexclusive, royalty-free, perpetual, irrevocable, transferable, worldwide license (with the right to grant and authorize sublicenses) to make, have made, use, import, offer for sale, sell, reproduce, distribute, modify, adapt, prepare derivative works of, display, perform, and otherwise exploit such Prior Inventions, without restriction, including, without limitation, as part of or in connection with such Invention, and to practice any method related thereto. Consultant will not incorporate any invention, discovery, idea, original works of authorship, development, improvements, trade secret, concept, or other proprietary information or intellectual property right owned by any third party into any Invention without Company’s prior written permission, including without limitation any free software or open source software”.

 

C.             Moral Rights. Any and all assignments to the Company of Inventions include all rights of attribution, paternity, integrity, modification, disclosure and withdrawal, and any other rights throughout the world that may be known as or referred to as “moral rights,” “artist’s rights,” “droit moral,” or the like (collectively, “Moral Rights”). To the extent that Moral Rights cannot be assigned under applicable law, Consultant hereby waives and agrees not to enforce any and all Moral Rights, including, without limitation, any limitation on subsequent modification, to the extent permitted under applicable law. If Consultant has any other rights to Company Inventions that cannot, under applicable law, be assigned to the Company, Consultant unconditionally and irrevocably waives the enforcement of such rights and all claims and causes of action of any kind against the Company with respect to such rights. Consultant agrees, at the Company’s request and expense, to consent to and join in any action to enforce such rights. If Consultant has any right to Company Inventions that can neither be assigned to the Company nor waived by Consultant, Consultant unconditionally and irrevocably grants to the Company during the term of such rights, an exclusive, irrevocable, perpetual, worldwide, fully-paid and royalty-free license, with rights to sublicense through multiple levels of sublicensees, to develop, make, have made, use, sell, have sold, offer for sale, import, reproduce, create derivative works of, distribute, publicly perform, and publicly display by all means now known or later developed, Company Inventions.

 

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D.             Maintenance of Records. Consultant agrees to keep and maintain adequate, current, accurate, and authentic written records of all Inventions made by Consultant (solely or jointly with others) during the term of this Agreement, and for a period of three (3) years thereafter. The records will be in the form of notes, sketches, drawings, electronic files, reports, or any other format that is customary in the industry and/or otherwise specified by the Company. Such records are and remain the sole property of the Company at all times and upon Company’s request, Consultant shall deliver (or cause to be delivered) the same.

 

E.             Further Assurances. Consultant agrees to assist Company, or its designee, at the Company’s expense, in every proper way to secure the Company’s rights in Inventions in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments that the Company may deem necessary in order to apply for, register, obtain, maintain, defend, and enforce such rights, and in order to deliver, assign and convey to the Company, its successors, assigns and nominees the sole and exclusive right, title, and interest in and to all Inventions and testifying in a suit or other proceeding relating to such Inventions. Consultant further agrees that Consultant’s obligations under this Section 4.E shall continue after the termination of this Agreement.

 

F.             Attorney-in-Fact. Consultant agrees that, if the Company is unable because of Consultant’s unavailability, dissolution, mental or physical incapacity, or for any other reason, to secure Consultant’s signature with respect to any Inventions, including, without limitation, for the purpose of applying for or pursuing any application for any Canadian, United States or foreign patents or mask work or copyright registrations covering the Inventions assigned to the Company in Section 4.A, then Consultant hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Consultant’s agent and attorney-in-fact, to act for and on Consultant’s behalf to execute and file any papers and oaths and to do all other lawfully permitted acts with respect to such Inventions to further the prosecution and issuance of patents, copyright and mask work registrations with the same legal force and effect as if executed by Consultant. This power of attorney shall be deemed coupled with an interest, and shall be irrevocable.

 

G.             Use of Name. Consultant consents to the use by the Company of Consultant’s name and likeness in written Company information and oral presentations to current or prospective customers, partners, investors or others without prior approval from Consultant, provided that such Company information or presentations accurately describe the nature of Consultant’s relationship with and/or contribution to the Company.

 

5.              Obligations

 

A.             During the term of this Agreement, Consultant shall not, without the prior written consent of the Company, engage in any work activity that competes with the Company’s business or enter into any consulting or advisory relationship with any third party commercial entity that is engaged in any business activity that is the same as, is substantially similar to, or competes with, the Company’s business.

 

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B.             Consultant hereby agrees to sign any further confidentiality and intellectual property/inventions assignment agreement required by the Company. Further, Consultant shall require all Consultant’s employees, contractors, or other third-parties performing Services under this Agreement to execute a Confidential Information and Assignment Agreement in the form contained in Exhibit B, and promptly provide a copy of each such executed agreement to the Company prior to any such parties performing any Services under this Agreement. Consultant’s violation of this Section 5 will be considered a material breach under Section 8.B.

 

C.             Engagement of Consultant’s Employees or Contractors. Consultant agrees to seek written approval from the Company prior to engaging any Consultant’s employee or contractor in connection with providing the Services to the Company, which approval the Company may withhold at its discretion.

 

D.             Non-disparagement Agreement. The parties hereby agree that during and after Consultant’s engagement with the Company, each party will permanently refrain from directly or indirectly expressing, publishing or broadcasting, or otherwise disseminating or distributing any comments, statements or other communications, which a reasonable person would regard as reflecting adversely on the character, reputation or goodwill of the other party, or any of its affiliated companies, or any of their respective directors or employees, or which a reasonable person would regard as reflecting adversely on any aspect of the other party’s, any affiliate companies’ management, operations, finances, businesses, products, or services. Nothing in this Agreement will prevent the parties from cooperating with any governmental authority in any investigation or proceeding, from providing truthful testimony or making truthful allegations to any governmental authority, or from enforcing any of such party’s rights pursuant to this Agreement or the transactions contemplated hereby.

 

E.             No Personal Benefit. Consultant will not receive or accept for Consultant’s own benefit or for any other person’s benefit, either directly or indirectly, any commission, rebate, discount, gratuity or profit from any person having or proposing to have one or more business transactions with the Company, without the prior approval of the Company. For purposes of this subsection (D), “Person” means any individual, partnership, limited partnership, joint venture, syndicate, sole proprietorship, company or company with or without share capital, unincorporated association, trust, trustee, executor, administrator or other legal personal representative, regulatory body or agency, government or governmental agency or entity however designated or constituted.

 

6.              Representations and Warranties

 

A.             Compliance with Laws and Regulations. Consultant covenants and warrants that Consultant shall comply with all applicable Canadian, United States and foreign federal, state, provincial and local laws and regulations.

 

B.             Exclusion/Debarment. Consultant represents and warrants that Consultant has never been, and shall never be, during the term of this Agreement, excluded from participation in Medicare, Medicaid or any other federal health care program, as defined in 42 U.S.C. § 1320a-7b(f). Consultant represents and warrants that Consultant has not been, and shall not be during the term of this Agreement, excluded from any federal contracting by the United States General Services Administration. Consultant further represents and warrants that no final adverse action, as that term is defined in 42 U.S.C. § 1320a-7e(g), has occurred or is pending or threatened against Consultant. Consultant represents and warrants that neither Consultant nor any of Consultant’s employees or agents performing Services hereunder (each a “Consultant Representative”) is not under investigation by the FDA or any other regulatory agency nor has Consultant or any Consultant Representative been debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded by any federal department or agency.

 

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C.             Criminal Conviction. Consultant represents and warrants that neither Consultant nor any Consultant Representative have been criminally convicted or found civilly liable for violating any federal, provincial, state or local laws applicable to Consultant or the Company.

 

D.             Conflict of Interest. Consultant represents and warrants that Consultant does not have any actual or potential personal or professional conflicts of interest that affect Consultant’s ability to provide the Services. Consultant further represents and warrants that Consultant will not enter into agreements or arrangements with any other person or organization that creates a conflict of interest with the performance of Services under this Agreement.

 

E.             Required Notices. Consultant shall notify the Company immediately in writing if any representation, warranty, statement, covenant or other obligation of this Section is no longer accurate.

 

7.              Reports

 

Consultant agrees that Consultant will periodically keep the Company advised as to Consultant’s progress in performing the Services under this Agreement. Consultant further agrees that Consultant will, as requested by the Company, prepare written reports with respect to such progress. The Company and Consultant agree that reasonable time expended in preparing such written reports will be considered time devoted to the performance of the Services.

 

8.              Term and Termination

 

A.             Term. The term of this Agreement will begin on the Effective Date of this Agreement and will continue until December 31, 2023, or the mutual agreement of the Parties.

 

B.             Termination. The Company may, at its sole discretion, immediately terminate this Agreement at any time by paying Consultant the fees Consultant would have been paid during the notice period provided for under this Section. Consultant agrees that regardless of the characterization of Consultant’s relationship with the Company relating to the Services, the terms of this termination provision will be operative at all times, and Consultant will not be entitled to any further notice, fees, pay or compensation of any kind (except for fees, if any, accrued and owing under this Agreement up to the date of termination), and for clarity, without limiting the foregoing, you will not be entitled to reasonable notice at common law or any other statutory notice or pay, other than as stated herein.

 

C.             Termination for Breach. The Company or Consultant may terminate this Agreement immediately, without notice, at any time, upon the occurrence of any of the following events:

 

(a)Material breach of any law or regulation by the other party;

 

(b)Material breach of the terms of this Agreement by the other party;

 

(c)Any dishonest act, conduct involving moral turpitude, or any other conduct that could adversely affect the reputation or public image of the other party; or

 

(d)The inability or refusal of the other party to perform and discharge the obligations hereunder.

 

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D.             Return of Company Materials. Upon the termination of this Agreement, or at any time upon the Company’s request, Consultant will immediately deliver to the Company, and will not keep in Consultant’s possession, recreate, or deliver to anyone else, any and all Company property, including, but not limited to, Confidential Information, Third Party Information, all work product resulting from the Services, tangible embodiments of the Inventions, all devices and equipment belonging to the Company, all electronically-stored information and passwords to access such property, those records maintained pursuant to Section 4.D and any reproductions of any of the foregoing items that Consultant may have in Consultant’s possession or control, without altering or deleting any such property prior to delivering it to the Company. Consultant further agrees that any property situated on the Company’s premises and owned by the Company, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Company personnel at any time with or without notice.

 

E.             Survival. Upon any termination, all rights and duties of the Company and Consultant toward each other shall cease except:

 

(1)            The Company will pay, within thirty (30) days after the effective date of termination, all amounts owing to Consultant for Services completed and accepted by the Company prior to the termination date and related reimbursable expenses, if any, submitted in accordance with the Company’s policies and in accordance with the provisions of Section 1 of this Agreement; and

 

(2)            Section 3 (Confidentiality), Section 4 (Ownership), Section 5.B (Conflicting Obligations), Section 6 (Return of Company Materials), Section 8 (Term and Termination), Section 9 (Independent Contractor; Benefits), Section 10 (Indemnification), Section 11 (Non-solicitation), Section 12 (Limitation of Liability), Section 13 (Arbitration and Equitable Relief), and Section 14 (Miscellaneous) will survive termination or expiration of this Agreement in accordance with their terms.

 

9.              Independent Contractor; Benefits

 

A.             Independent Contractor. It is the express intention of the Company and Consultant that Consultant perform the Services as an independent contractor to the Company. Nothing in this Agreement shall in any way be interpreted, deemed or construed to constitute Consultant as an agent, joint-venturer, partner, employee or representative of the Company. Without limiting the generality of the foregoing, Consultant is not authorized to bind the Company to any liability or obligation or to represent that Consultant has any such authority. Consultant agrees to furnish (or reimburse the Company for) all tools and materials necessary to accomplish this Agreement and shall incur all expenses associated with performance, except as expressly provided in Exhibit A. Consultant acknowledges and agrees that Consultant is obligated to report as taxable income all fees and compensation received by Consultant pursuant to this Agreement. Consultant agrees to and acknowledges the obligation to pay all self-employment and other taxes on such fees and compensation.

 

B.             Benefits. The Company and Consultant agree that Consultant will receive no Company-sponsored or employment benefits from the Company where benefits include, but are not limited to, paid vacation, sick leave, paid time off, incentive compensation, allowances, perquisites, employee group insurance, medical insurance, and retirement pay. Consultant shall be solely responsible for all tax returns and payments required to be filed with or made to any federal, state, or local tax authority with respect to Consultant’s performance of services and receipt of fees under this Agreement. Because Consultant is an independent contractor, the Company will not withhold or make payments for social security, make unemployment insurance or disability insurance contributions, or obtain worker’s compensation insurance on Consultant’s behalf. Consultant agrees to accept exclusive liability for complying with all applicable provincial and federal laws governing self-employed individuals, including obligations such as payment of taxes, social security, disability, and other contributions based on fees paid to Consultant, Consultant’s agents, or Consultant’s employees under this Agreement. Consultant hereby agrees to indemnify and defend the Company against any and all such taxes or contributions, including penalties and interest. If Consultant is reclassified by a government agency or a court as the Company’s employee, Consultant will become a reclassified employee and will receive no benefits from the Company, except those mandated by applicable law, even if by the terms of the Company’s benefit plans or programs of the Company in effect at the time of such reclassification, Consultant would otherwise be eligible for such benefits.

 

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10.           Indemnification

Consultant agrees to indemnify and hold harmless the Company and its affiliates and their directors, officers and employees from and against all taxes, losses, damages, liabilities, costs and expenses, including attorneys’ fees and other legal expenses, arising directly or indirectly from or in connection with (i) any negligent, reckless or intentionally wrongful act of Consultant or Consultant’s assistants, employees, contractors or agents, (ii) a determination by a court or agency that the Consultant is not an independent contractor, where such determination results in any cost, expense, compensation, damages or loss to the Company, (iii) any breach by the Consultant or Consultant’s assistants, employees, contractors or agents of any of the covenants contained in this Agreement and corresponding Confidential Information and Invention Assignment Agreement, (iv) any failure of Consultant to perform the Services in accordance with all applicable laws, rules and regulations, or (v) any violation or claimed violation of a third party’s rights resulting in whole or in part from the Company’s use of the Inventions or other deliverables of Consultant under this Agreement.

 

11.            Non-solicitation; Non-Interference with Business

 

A.             Non-solicitation. To the fullest extent permitted under applicable law, from the date of this Agreement until twelve (12) months after the termination of this Agreement (the “Restricted Period”), neither Party will, for any reason, without the other Party’s prior written consent, directly or indirectly, solicit or attempt to solicit any of the other Party’s employees to terminate, breach or change their engagement with the other Party, or solicit or attempt to solicit employees of the other Party at all, either for the Party’s own benefit or for the benefit of any other person or entity. The Parties agree that nothing in this Section 11 shall affect either Party’s continuing obligations under this Agreement during and after this twelve (12) month period, including, without limitation, Consultant’s obligations under Section 3.

 

B.             Non-Interference with Business. During the term of this Agreement and for a period of twelve (12) months thereafter, Consultant agrees not to solicit or induce any employee, supplier, independent contractor or customer of the Company to terminate, breach or alter their relationship with the Company. In addition, during this period, Consultant will not, whether for Consultant’s own account or for the account of any other person, firm, corporation or other business organization, intentionally interfere with any person or other entity that is, or during the period of Consultant’s engagement by the Company was, a partner, supplier, customer or client of the Company or its affiliates.

 

12.            Limitation of Liability

 

IN NO EVENT SHALL COMPANY BE LIABLE TO CONSULTANT OR TO ANY OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, OR DAMAGES FOR LOST PROFITS OR LOSS OF BUSINESS, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY, WHETHER BASED IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHER THEORY OF LIABILITY, REGARDLESS OF WHETHER COMPANY WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. IN NO EVENT SHALL COMPANY’S LIABILITY ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT EXCEED THE AMOUNTS PAID BY COMPANY TO CONSULTANT UNDER THIS AGREEMENT FOR THE SERVICES, DELIVERABLES OR INVENTION GIVING RISE TO SUCH LIABILITY.

 

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13.            Dispute Resolution and Equitable Relief

 

A.            Dispute Resolution. SUBJECT TO STATUTORY COMPLAINT RIGHTS CONSULTANT IS ENTITLED TO, In consideration of Consultant’s consulting relationship with Company, its promise to RESOLVE all disputes related to Consultant’s relationship with the Company and Consultant’s receipt of the FEES paid to Consultant by THE Company, at present and in the future, Consultant agrees that any and all controversies, claims, or disputes with anyone (including Company and any employee, officer, director, shareholder or benefit plan of the Company in their capacity as such or otherwise), arising out of, relating to, or resulting from Consultant’s relationship with the Company or the termination of Consultant’s relationship with the Company, including any breach of this Agreement, shall be RESOLVED CONFIDENTIALLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT AS FOLLOWS:

 

(1)            AMICABLE NEGOTIATION – THE PARTIES AGREE THAT, BOTH DURING AND AFTER THE PERFORMANCE OF THEIR RESPONSIBILITIES UNDER THIS AGREEMENT, EACH OF THEM WILL MAKE BONA FIDE EFFORTS TO RESOLVE ANY DISPUTES ARISING BETWEEN THEM BY AMICABLE NEGOTIATION;

 

(2)            MEDIATION – IF THE PARTIES ARE UNABLE TO NEGOTIATE RESOLUTION OF A DISPUTE, EITHER PARTY MAY REFER THE DISPUTE TO MEDIATION BY PROVIDING WRITTEN NOTICE TO THE OTHER PARTY. IF THE PARTIES CANNOT AGREE ON A MEDIATOR WITHIN THIRTY (30) DAYS OF RECEIPT OF THE NOTICE TO MEDIATE, THEN EITHER PARTY MAY MAKE APPLICATION TO THE ADR INSTITUTE OF BRITISH COLUMBIA TO HAVE ONE APPOINTED. THE MEDIATION WILL BE HELD IN VANCOVER, BRITISH COLUMBIA, IN ACCORDANCE WITH THE NATIONAL MEDIATION RULES OF THE ADR INSTITUTE OF CANADA, AND EACH PARTY WILL BEAR A ONE-HALF SHARE OF THE MEDIATOR’S FEES;

 

(3)            ARBITRATION – IF, AFTER MEDIATION, THE PARTIES HAVE BEEN UNABLE TO RESOLVE A DISPUTE AND THE MEDIATOR HAS BEEN INACTIVE FOR MORE THAN 30 DAYS, OR SUCH OTHER PERIOD AGREED TO IN WRITING BY THE PARTIES, EITHER PARTY MAY REFER THE DISPUTE FOR FINAL AND BINDING ARBITRATION BY PROVIDING WRITTEN NOTICE TO THE OTHER PARTY. IF THE PARTIES CANNOT AGREE ON AN ARBITRATOR WITHIN THIRTY (30) DAYS OF RECEIPT OF THE NOTICE TO ARBITRATE, THEN ANY PARTY MAY MAKE APPLICATION TO THE ADR INSTITUTE OF BRITISH COLUMBIA TO APPOINT ONE. THE ARBITRATION WILL BE HELD IN VANCOUVER, BRITISH COLUMBIA, IN ACCORDANCE WITH BRITISH COLUMBIA’s ARBITRATION ACT, AND EACH PARTY WILL BEAR ITS OWN COSTS, INCLUDING A ONE-HALF SHARE OF THE ARBITRATOR’S FEES, SUBJECT TO ANY AWARD OF COSTS BY THE ARBITRATOR.

 

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B.             THE PARTIES AGREE THAT THE ARBITRATOR SHALL HAVE THE POWER TO DECIDE ANY MOTIONS BROUGHT BY EITHER PARTY TO THE ARBITRATION, INCLUDING MOTIONS FOR SUMMARY JUDGMENT AND/OR ADJUDICATION AND MOTIONS TO DISMISS. THE PARTIES AGREE THAT THE ARBITRATOR SHALL ISSUE A WRITTEN DECISION ON THE MERITS AND THAT THE ARBITRATOR SHALL HAVE THE POWER TO AWARD ANY REMEDIES AVAILABLE UNDER APPLICABLE LAW, AND THAT THE ARBITRATOR SHALL AWARD COSTS TO THE PREVAILING PARTY WHERE PROVIDED BY APPLICABLE LAW. THE PARTIES AGREE THAT THE DECREE OR AWARD RENDERED BY THE ARBITRATOR MAY BE ENTERED AS A FINAL AND BINDING JUDGMENT IN ANY COURT HAVING JURISDICTION THEREOF. THE PARTIES AGREE THAT THE ARBITRATOR SHALL ADMINISTER AND CONDUCT ANY ARBITRATION IN ACCORDANCE WITH BRITISH COLUMBIA LAW, AND THAT THE ARBITRATOR SHALL APPLY SUBSTANTIVE AND PROCEDURAL BRITISH COLUMBIA LAW TO ANY DISPUTE OR CLAIM, WITHOUT REFERENCE TO RULES OF CONFLICT OF LAW.

 

C.             REMEDY. Except as provided by THIS AGREEMENT, arbitration shall be the sole, exclusive, and final remedy for any dispute between Consultant and the Company. Accordingly, except as provided for by this agreement, neither Consultant nor the Company will be permitted to pursue court action regarding claims that are subject to arbitration.

 

D.             AVAILABILITY OF INJUNCTIVE RELIEF. the Parties agree that EITHER party may also petition ANY COURT OF COMPETENT JURISDICTION for injunctive relief where either party alleges or claims a violation of any agreement regarding INTELLECTUAL PROPERTY, confidential information OR NONINTERFERENCE. In the event either party seeks injunctive relief, the prevailing party shall be entitled to recover reasonable costs.

 

E.             VOLUNTARY NATURE OF AGREEMENT. Consultant acknowledges and agrees that he/she is executing this Agreement voluntarily and without any duress or undue influence by the Company or anyone else. Consultant further acknowledges and agrees that he/she has carefully read this Agreement and has asked any questions needed to FULLY understand the terms, consequences and binding effect of this Agreement, including that Consultant is waiving CONSULTANT’S right to a jury trial. Finally, Consultant agrees that CONSULTANT has been provided an opportunity to seek INDEPENDENT LEGAL advice before signing this Agreement.

 

14.            Miscellaneous

 

A.            Governing Law; Consent to Personal Jurisdiction. This Agreement shall be governed by the laws of the Province of British Columbia, without regard to the conflicts of law provisions of any jurisdiction.

 

B.            Assignability. This Agreement will be binding upon Consultant’s heirs, executors, assigns, administrators, and other legal representatives, and will be for the benefit of the Company, its successors, and its assigns. There are no intended third-party beneficiaries to this Agreement, except as expressly stated. Except as may otherwise be provided in this Agreement, Consultant may not sell, assign or delegate any rights or obligations under this Agreement. Notwithstanding anything to the contrary herein, Company may assign this Agreement and its rights and obligations under this Agreement to any successor to all or substantially all of Company’s relevant assets, whether by merger, consolidation, reorganization, reincorporation, sale of assets or stock, change of control or otherwise.

 

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C.            Entire Agreement. This Agreement constitutes the entire agreement and understanding between the Parties with respect to the subject matter herein and supersedes all prior written and oral agreements, discussions, or representations between the Parties. Consultant represents and warrants that he/she is not relying on any statement or representation not contained in this Agreement. To the extent any terms set forth in any exhibit or schedule conflict with the terms set forth in this Agreement, the terms of this Agreement shall control unless otherwise expressly agreed by the Parties in such exhibit or schedule.

D.            Headings. Headings are used in this Agreement for reference only and shall not be considered when interpreting this Agreement.

 

E.             Severability. If any wording, term, condition, provision, part, article, section, clause, paragraph or subparagraph of this Agreement is held to be indefinite, invalid, illegal or otherwise voidable or unenforceable for any reason, the entire Agreement will not fail on the account thereof, and the remainder of the Agreement or the application of that wording, term, condition, provision, part, article, section, clause, paragraph or subparagraph to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and the balance of the wording, term, condition, provision, part, article, section, clause, paragraph or subparagraph shall be separately valid and enforceable to the fullest extent permitted by law and will in no way be affected or impaired thereby.

 

F.             Modification, Waiver. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in a writing signed by the Parties. Waiver by the Company of a breach of any provision of this Agreement will not operate as a waiver of any other or subsequent breach.

 

G.             Notices. Any notice or other communication required or permitted by this Agreement to be given to a Party shall be in writing and shall be deemed given (i) if delivered personally or by commercial messenger or courier service, (ii) when sent by confirmed facsimile, or (iii) if mailed by registered or certified mail, to the Party at the Party’s address written below or at such other address as the Party may have previously specified by like notice. If by mail, delivery shall be deemed effective three business days after mailing in accordance with this Section 14.G.

 

(1)            If to the Company, to:

 

ElectraMeccanica Vehicles corp.
8127 E. Ray Road

Mesa, AZ 85212

Email: mike.bridge@electrameccanica.com

 

Attention: Michael Bridge

 

(2)             If to Consultant, to the address first written above.

 

H.             Legal Fees. In any court action at law or equity that is brought by one of the Parties to this Agreement to enforce or interpret the provisions of this Agreement, the prevailing Party will be entitled to reasonable legal fees, in addition to any other relief to which that Party may be entitled.

 

I.              Signatures. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original, with the same force and effectiveness as though executed in a single document.

 

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IN WITNESS WHEREOF, the Parties hereto have executed this Consulting Agreement as of the date first written above.

 

ORSIM FINANCE LTD.  ElectraMeccanica Vehicles corp.
    
By: /s/ Mark Orsmond  By: /s/ Susan E. Docherty
Name: Mark Orsmond  Name: Susan E. Docherty
Principal  Title: Chief Executive Officer

 

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EXHIBIT A

 

SERVICES AND FEES

 

1.              Company Contact. Consultant’s principal contact at the Company is:
 
Name: Stephen Johnston
   
Title: CFO
   
Email: Stephen.johnston@electrameccanica.com
   
Phone: (248) 227-8680

 

Consultant Contact. The Company’s principal contact at Consultant is:
 
Name: Mark Orsmond
   
Title: Principal
   
Email: Mark.Orsmond@EMVAuto.onmicrosoft.com  
   
Phone: (604) 377-0014

 

2.              Services. The Services to be provided by Consultant to the Company will include, but will not be limited to, the following:

 

A.Assistance with financial and accounting matters for the Company, including periodic reports filed by the Company with the SEC;
   
B.Assistance with contract assembly as a service opportunities for the Company;
   
C.Collaborate and work with the Company’s employees and consultants in connection with delivery of the Services; and
   
 D.Such other services as agreed to by the Parties from time to time.

 

Consultant will perform Services for the Company as agreed to, as well as on a project-basis as needed. All Services provided by Consultant will be deliverable to the Company in British Columbia, and will be deemed performed for the Company in British Columbia.

 

3.              Fee Schedule

 

A.             Beginning on the Effective Date, the Company will pay Consultant CAN$45,810 per month, plus 5% GST, for all services performed, inclusive of all applicable taxes, and pro-rated for any partial month of engagement. Consultant will not be available to provide Services from November 11, 2023 – November 24, 2023 so will not be paid for such period.

 

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B.             Consultant will provide and pay for all equipment and supplies needed to perform the Services and shall bear all expenses associated therewith. The Company will reimburse Consultant, in accordance with Company policy, for all travel and any other expenses actually, reasonably and properly incurred by Consultant, where such Consultant has incurred such expenses on behalf of the Company, provided Consultant obtains written consent from an authorized agent of the Company prior to incurring such expenses and submits receipts for such expenses to the Company in accordance with the Company’s policy.

 

C.             Consultant shall submit to the Company a monthly written invoice for Services and expenses, and such statement shall be subject to the approval of the contact person listed above or other designated agent of the Company. The Company will remit payment for properly submitted and approved invoices within thirty (30) days following invoice submission.

 

This Exhibit A is made and entered into as of October 10, 2023, and is effective as of October 13, 2023.

 

ORSIM FINANCE LTD.  ElectraMeccanica Vehicles corp.
    
By: /s/ Mark Orsmond   By: /s/ Susan E. Docherty
Name: Mark Orsmond  Name: Susan E. Docherty
Principal  Title: Chief Executive Officer

 

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EXHIBIT B

 

CONFIDENTIAL INFORMATION AND ASSIGNMENT AGREEMENT

 

This Confidential Information and Assignment Agreement (this “Agreement”) is entered into as of October 10, 2023, by and between ElectraMeccanica Vehicles corp., having a business address at 6060 Silver Drive, Third Floor, Burnaby, BC, V5H0H5, Canada (the “Company”), and Orsim Finance Ltd, a company with a business address at 992 Hampshire Road, North Vancouver, V7R1V2, Canada (“Consultant”), and Mark Orsmond (“Service Provider”), an employee of Consultant (each herein referred to individually as a “Party,” or collectively as the “Parties”).

 

RECITALS

WHEREAS:

 

A.Consultant and the Company, have entered into a consulting agreement, dated October ●, 2023 (the “Consulting Agreement”);
B.Section 5 of the Consulting Agreement requires Consultant to have each of Consultant’s employees and contractors with access to Confidential Information (as defined below) execute this Agreement;
C.Service Provider is a worker of Consultant, who wishes to perform work for the Consultant in connection with the services the Consultant is providing to the Company (the “Services”) and, in consideration for being permitted to undertake such work, Service Provider is voluntarily entering into this Agreement; and
D.Capitalized terms used but not defined in this Agreement shall have the meanings assigned to them in the Consulting Agreement.

 

AGREEMENT

 

In consideration for Service Provider being permitted to work in connection with, and Consultant providing, the Services, and the promises contained herein, the Parties agree as follows:

 

1.              Confidentiality

 

A.             Definition.Confidential Information” means any information (including any and all combinations of individual items of information) that relates to the actual or anticipated business and/or products, research or development of the Company, or to the Company’s technical data, trade secrets, or know-how, including, but not limited to, research, product plans, or other information regarding the Company’s products or services and markets therefor, customer lists and customers (including, but not limited to, customers of the Company on whom Service Provider called or with whom Service Provider became acquainted during the term of Service Provider’s employment or engagement), software, developments, inventions, discoveries, ideas, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances, personal information, employee personal information, and other business information disclosed by the Company either directly or indirectly in writing, orally or by drawings or inspection of premises, parts, equipment, or other Company property. Notwithstanding the foregoing, Confidential Information shall not include any such information which Service Provider can establish (i) was publicly known or made generally available prior to the time of disclosure by Company to Service Provider; (ii) becomes publicly known or made generally available after disclosure by Company to Service Provider through no wrongful action or omission of Service Provider; or (iii) is in the rightful possession of Service Provider, without confidentiality obligations, at the time of disclosure by Company as shown by Service Provider’s then-contemporaneous written records; provided that any combination of individual items of information shall not be deemed to be within any of the foregoing exceptions merely because one or more of the individual items are within such exception, unless the combination as a whole is within such exception.

 

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B.             Non-use and Non-disclosure. During and after the term of this Agreement, Service Provider will hold in the strictest confidence, and take all reasonable precautions to prevent any unauthorized use or disclosure of Confidential Information, and Service Provider will not (i) use the Confidential Information for any purpose whatsoever other than as necessary for the performance of the Services on behalf of the Company, or (ii) disclose the Confidential Information to any third party without the prior written consent of an authorized representative of Company. Service Provider agrees that no ownership of Confidential Information is conveyed to the Service Provider. Without limiting the foregoing, Consultant shall not use or disclose any Company property, intellectual property rights, trade secrets or other proprietary know-how of the Company to invent, author, make, develop, or design, or otherwise enable others to invent, author, make, develop, design identical or substantially similar designs as those developed under this Agreement for any third party. Service Provider agrees that Service Provider’s obligations under this Section 1.B shall continue after the termination of this Agreement.

 

C.             Other Service Provider’s Confidential Information. Service Provider agrees that Service Provider will not improperly use, disclose, or induce the Company to use any proprietary information or trade secrets of any third party with which Service Provider has an obligation to keep in confidence. Service Provider also agrees that Service Provider will not bring onto the Company’s premises or transfer onto the Company’s technology systems any unpublished document, proprietary information, or trade secrets belonging to any third party unless disclosure to, and use by, the Company has been consented to in writing by such third party.

 

D.             Third Party Confidential Information. Service Provider recognizes that the Company has received and in the future will receive from third parties their personal, confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. Service Provider agrees that at all times during the term of the Consulting Agreement and thereafter, Consultant and the Service Provider owe the Company and such third parties a duty to hold all such confidential or proprietary information in the strictest confidence and not to use it or to disclose it to any person, firm, corporation, or other third party except as necessary in carrying out the Services for the Company consistent with the Company’s agreement with such third party.

 

2.              Ownership

 

A.             Assignment of Inventions. Service Provider agrees that all right, title, and interest in and to any copyrightable material, notes, records, drawings, designs, inventions, improvements, developments, discoveries, ideas and trade secrets conceived, discovered, authored, invented, developed or reduced to practice by Service Provider, solely or in collaboration with others, during the term of the Consulting Agreement and arising out of or in connection with performing the Services under the Consulting Agreement and any copyrights, patents, trade secrets, mask work rights or other intellectual property rights relating to the foregoing (collectively, “Inventions”), are the sole property of the Company. Service Provider also agrees to promptly make full written disclosure to the Company of any Inventions and to deliver and assign (or cause to be assigned) and hereby irrevocably assigns fully to the Company all right, title and interest in and to the Inventions.

 

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B.             Pre-Existing Materials. Subject to Section 2.A of this Agreement, Service Provider will provide the Company with prior written notice if, in the course of performing the Services, Service Provider incorporates into any Invention or utilizes in the performance of the Services any pre-existing invention, discovery, idea, original works of authorship, development, improvements, trade secret, concept, or other proprietary information or intellectual property right owned by Service Provider or in which Service Provider has an interest, prior to, or separate from, performing the Services under this Agreement (“Prior Inventions”), and the Company is hereby granted a nonexclusive, royalty-free, perpetual, irrevocable, transferable, worldwide license (with the right to grant and authorize sublicenses) to make, have made, modify, use, import, offer for sale, sell, reproduce, distribute, modify, adapt, prepare derivative works of, display, perform, and otherwise exploit such Prior Inventions, without restriction, including, without limitation, as part of or in connection with such Invention, and to practice any method related thereto. Service Provider will not incorporate any invention, discovery, idea, original works of authorship, development, improvements, trade secret, concept, or other proprietary information or intellectual property right owned by any third party into any Invention without Company’s prior written permission, including without limitation any free software or open source software.

 

C.             Moral Rights. Any and all assignments to the Company of Inventions include all rights of attribution, paternity, integrity, modification, disclosure and withdrawal, and any other rights throughout the world that may be known as or referred to as “moral rights,” “artist’s rights,” “droit moral,” or the like (collectively, “Moral Rights”). To the extent that Moral Rights cannot be assigned under applicable law, Service Provider hereby waives and agrees not to enforce any and all Moral Rights, including, without limitation, any limitation on subsequent modification, to the extent permitted under applicable law. If Service Provider has any other rights to Company Inventions that cannot, under applicable law, be assigned to the Company, Service Provider unconditionally and irrevocably waives the enforcement of such rights and all claims and causes of action of any kind against the Company with respect to such rights. Service Provider agrees, at the Company’s request and expense, to consent to and join in any action to enforce such rights. If Service Provider has any right to Company Inventions that can neither be assigned to the Company nor waived by Service Provider, Service Provider unconditionally and irrevocably grants to the Company during the term of such rights, an exclusive, irrevocable, perpetual, worldwide, fully-paid and royalty-free license, with rights to sublicense through multiple levels of sublicensees, to develop, make, have made, use, sell, have sold, offer for sale, import, reproduce, create derivative works of, distribute, publicly perform, and publicly display by all means now known or later developed, Company Inventions.

 

D.             Maintenance of Records. Service Provider agrees to keep and maintain adequate, current, accurate, and authentic written records of all Inventions made by Service Provider (solely or jointly with others) during the term of the Consulting Agreement, and for a period of three (3) years thereafter. The records will be in the form of notes, sketches, drawings, electronic files, reports, or any other format that is customary in the industry and/or otherwise specified by the Company. Such records are and remain the sole property of the Company at all times and upon Company’s request, Service Provider shall deliver (or cause to be delivered) the same.

 

E.             Further Assurances. Service Provider agrees to assist Company, or its designee, at the Company’s expense, in every proper way to secure the Company’s rights in Inventions in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments that the Company may deem necessary in order to apply for, register, obtain, maintain, defend, and enforce such rights, and in order to deliver, assign and convey to the Company, its successors, assigns and nominees the sole and exclusive right, title, and interest in and to all Inventions and testifying in a suit or other proceeding relating to such Inventions. Service Provider further agrees that Service Provider’s obligations under this Section 2.E shall continue after the termination of this Agreement.

 

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F.             Attorney-in-Fact. Service Provider agrees that, if the Company is unable because of Service Provider’s unavailability, dissolution, mental or physical incapacity, or for any other reason, to secure Service Provider’s signature with respect to any Inventions, including, without limitation, for the purpose of applying for or pursuing any application for any Canadian, United States or foreign patents or mask work or copyright registrations covering the Inventions assigned to the Company in Section 2.A of this Agreement, then Service Provider hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Service Provider’s agent and attorney-in-fact, to act for and on Service Provider’s behalf to execute and file any papers and oaths and to do all other lawfully permitted acts with respect to such Inventions to further the prosecution and issuance of patents, copyright and mask work registrations with the same legal force and effect as if executed by Service Provider. This power of attorney shall be deemed coupled with an interest, and shall be irrevocable.

 

3.              Conflicting Obligations. Service Provider represents and warrants that Service Provider has no agreements, relationships, or commitments to any other person or entity that conflict with the provisions of this Agreement, Service Provider’s obligations to the Company under this Agreement, and/or Service Provider’s ability to perform the Services. Service Provider will not enter into any such conflicting agreement, relationship or commitment during the term of the Consulting Agreement. Service Provider shall have no right to subcontract the performance of any Services without the prior written permission of Company. Service Provider’s violation of this Section 3 will be considered a material breach of this Agreement.

 

4.              Return of Materials. Upon the termination of the Consulting Agreement, or upon Company’s earlier request, Service Provider will immediately deliver to the Company, and will not keep in Service Provider’s possession, recreate, or deliver to anyone else, any and all Company property, including, but not limited to, Confidential Information, all work product resulting from the Services, all tangible embodiments of the Inventions, all devices and equipment belonging to the Company, all electronically stored information and passwords to access such property, records maintained pursuant to Section 2.D, and any reproductions of any of the foregoing items that Service Provider may have in Service Provider’s possession or control

 

5.              No Independent Relationship Between Company and Service Provider. At all times, Service Provider is an employee or contractor of Consultant, and has no such relationship with the Company. Nothing in this Agreement shall in any way be construed to constitute Service Provider as an agent, contractor, consultant, employee or representative of the Company. Without limiting the generality of the foregoing, Service Provider is not authorized to bind the Company to any liability or obligation or to represent that Service Provider has any such authority.

 

6.              Severability. If any wording, term, condition, provision, part, article, section, clause, paragraph or subparagraph of this Agreement is held to be indefinite, invalid, illegal or otherwise voidable or unenforceable for any reason, the entire Agreement will not fail on the account thereof, and the remainder of the Agreement or the application of that wording, term, condition, provision, part, article, section, clause, paragraph or subparagraph to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and the balance of the wording, term, condition, provision, part, article, section, clause, paragraph or subparagraph shall be separately valid and enforceable to the fullest extent permitted by law and will in no way be affected or impaired thereby.

 

7.              Modification, Waiver. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in a writing signed by the Parties. Waiver by the Company of a breach of any provision of this Agreement will not operate as a waiver of any other or subsequent breach.

 

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8.              Notices. Any notice or other communication required or permitted by this Agreement to be given to a Party shall be in writing and shall be deemed given (i) if delivered personally or by commercial messenger or courier service, (ii) when sent by confirmed facsimile, or (iii) if mailed by registered or certified mail, to the Party at the Party’s address written below or at such other address as the Party may have previously specified by like notice. If by mail, delivery shall be deemed effective three business days after mailing in accordance with this Section.

(1)    If to the Company, to:

 

ElectraMeccanica Vehicles corp.
8127 E. Ray Road

Mesa, AZ 85212

Email: mike.bridge@electrameccanica.com

 

Attention: Michael Bridge

 

(2)    If to Consultant and/or Service Provider, to Consultant’s address first written above.

 

9.              Enforcement – Service Provider acknowledges and agrees that damages may not be an adequate remedy to compensate the Company for any breach of Service Provider’s obligations under this Agreement, and accordingly agrees that in addition to any and all other remedies available, the Company shall be entitled to obtain relief by way of a temporary or permanent injunction to enforce such obligations.

 

10.             Counterparts – This Agreement may be executed by facsimile and in any number of counterparts, each of which will be deemed to be an original and all of which taken together will be deemed to constitute one and the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have executed this Confidential Information and Assignment Agreement as of the date first set forth above.

 

ElectraMeccanica Vehicles corp.   
    
Signature: /s/ Susan E. Docherty   
Name: Susan E. Docherty    
Title:

Chief Executive Officer

   

 

 

ORSIM FINANCE LTD  Service Provider
    
Signature: /s/ Mark Orsmond   Signature: /s/ Mark Orsmond
Name: Mark Orsmond  Name: Mark Orsmond
Title:

Director

  Title: Director 

 

 Page 19 of 19

 

 

Exhibit 10.2

 

ElectraMeccanica Vehicles Corp.
c/o WeWork, 6060 Silver Drive,
3rd floor. Burnaby, B.C., V5H 0H5
1-604-428-7656 (SOLO)
www.electrameccanica.com

 

October 9, 2023

 

Stephen Johnston

4950 Susans Way

Bloomfield Hills, MI 48302

 

Delivered Electronically via Email

 

Re:          Offer of Employment

 

Dear Stephen:

 

We are delighted to enter into this Executive Employment Agreement (the “Agreement”) to memorialize the terms under which you will serve as Chief Financial Officer of ElectraMeccanica Vehicles Corp. (the “Parent”) and ElectraMeccanica USA, LLC (the “Company”), a wholly-owned subsidiary of Parent. This offer is contingent upon the satisfactory completion of reference, litigation, and background checks.

 

Your start date will be October 9, 2023 (the “Start Date”). Once this Agreement becomes effective, it will form the entire agreement between you and the Company with respect to the matters described in this Agreement and it will supersede and replace any prior understandings (whether oral or written) with respect to the subject matter described herein. If you have any questions about the information below, please contact me directly.

 

Provision Agreement
   
Location:Your principal place of employment will be remote, with frequent trips to the Company’s offices in Mesa, Arizona and Burnaby, British Columbia.
  
Title; Reporting; Duties; No Conflicts: Beginning on the Start Date, you will serve as the Chief Financial Officer of the Company and the Parent, reporting directly to the Parent’s Chief Executive Officer (the “CEO”). While serving as the Chief Financial Officer, you will have control over, and responsibility for, the day-to-day financial and accounting operations acting as the Principle Financial Officer and Principle Accountant for SEC reporting purposes of the Company and Parent and shall have such other duties, authorities and responsibilities commensurate for such or a similar position at a similarly-situated company and such additional duties as may be assigned to you by the CEO from time to time.
   
  You understand that: (i) your employment services will be full-time and exclusive to the Company and Parent and that you will be expected to devote substantially all of your full business time, attention, energy and skills to the Company; (ii) you agree to serve the Company and Parent faithfully, loyally, honestly and to the best of your ability; and (iii) you will not, without the express written consent of the CEO, engage in any other commercial activity or outside employment. You may serve as an independent director for other entities, subject to the prior written approval of the CEO and such service not placing you into any conflict of interest in respect of you duties hereunder and to the companies.
   
  The preceding paragraph is not intended to prohibit you from engaging in charitable or nonprofessional activities such as personal investments or conducting private business affairs, as long as they do not conflict or interfere with the performance of your duties to the Company or Parent. You agree to observe and comply with the rules and policies of the Company and Parent as the same may be adopted and amended from time to time.
   
  By signing this Agreement, you represent and warrant that you are under no contractual or other obligations or commitments that are inconsistent with your obligations under this Agreement, including, without limitation, any restrictions that would preclude you from providing services to the Company or Parent (e.g., a non-compete with a former employer).

 

 

 

 

Term:The initial term of your employment under this Agreement shall commence on the Start Date and shall continue until the three year anniversary of the Start Date (the “Initial Term”). The Initial term will automatically extend on the same terms and conditions set forth below for additional one year periods (each, a “Renewal Term”), unless either party gives the other party written notice of non-renewal at least 30 calendar days prior to the end of the Initial Term or any Renewal Term. The Initial Term, together with all Renewal Terms, are collectively referred to in this Agreement as the “Term”.
  
Base Salary: A rate of $425,000 per year (the “Base Salary”) during the Term to be paid according to the Company’s normal payroll cycle. Your Base Salary will be reviewed annually and may be adjusted by the Compensation Committee of the Board (the “Compensation Committee”) in its sole discretion. For 2023, your Base Salary will be pro-rated based on the number of days from your Start Date through December 31, 2023.
   
Sign-On RSUs: Subject to approval by the Compensation Committee, within 30 days of your Start Date, you will be awarded restricted stock units under our Equity Plan covering 300,000 shares of common stock of the Parent (the “Sign-On RSUs”). The Sign-On RSUs will vest in three equal annual installments from the date of grant. The Sign-On RSUs will be subject to such other terms and conditions specified by the Compensation Committee, the Equity Plan, the award agreement that you must execute as a condition of the grant, and the Company’s insider trading policy. In this respect the parties hereby acknowledged and agreed that, in accordance with the Equity Plan and the award agreement for the Sign-On RSUs, upon the vesting of each Sign-On RSU and the issuance of Company common stock resulting therefrom, each share of common stock may be issued on a net basis such that the resulting number of shares to be issued will be reduced by the then fair market value of the number of shares necessary to pay the requisite federal, state or local withholding taxes associated with the same.
   
2023 Pro-Rata Bonus:You will be eligible for a 2023 pro rata cash bonus (“2023 Bonus”) based on your achievement of pre-defined personal objectives. Your target 2023 Bonus is $63,750. The amount of the 2023 Bonus, if any, will be determined by the Compensation Committee in January or February of 2024 and paid no later than March 31, 2024. You must be actively employed by the Company through the date the 2023 Bonus is paid in order to earn and be eligible to receive the 2023 Bonus. Active employment does not include any period of notice that arises upon termination of employment, whether by contract, or otherwise, unless expressly required by applicable law.
  
Short-Term Incentive Plan (“STIP”): Beginning January 1, 2024, and for each full calendar year during the Term thereafter, you will be eligible to participate in an annual cash incentive program adopted in writing and approved by the Compensation Committee (the “STIP”). Your target incentive under the STIP will equal 60% of your Base Salary. The amount of the STIP, if any, will be determined by the Compensation Committee in January or February of the year following the year during the Term to which the STIP relates, and the earned STIP, if any, will be paid to you no later than March 31 of the year following the year to which the STIP relates (e.g., the STIP for 2024, if any, will be paid no later than March 31, 2025). You must be actively employed by the Company through the date the STIP is paid in order to earn and be eligible to receive the STIP. Active employment does not include any period of notice that arises upon termination of employment, whether by contract, or otherwise, unless expressly required by applicable law.
   
Long-Term Incentive Compensation:Beginning January 1, 2024, and for each full calendar year during the Term thereafter, you will be eligible to receive grants of restricted shares and performance shares and other awards under the Equity Plan (the “Annual Equity Awards”). The amount of Annual Equity Awards, the mix of Annual Equity Awards, the vesting schedule and the other terms and conditions of the Annual Equity Awards will be established by the Compensation Committee in its sole discretion. The Annual Equity Awards will be subject to such other terms and conditions specified by the Compensation Committee, the Equity Plan, the award agreement that you must execute as a condition of the grant(s), and the Company’s insider trading policy.

 

2

 

 

Benefits; Vacation: During the Term of this Agreement, you will be eligible to participate in the Company’s standard company benefit and vacation plans, as such plans may be amended, modified, or terminated by the Company from time to time, with or without notice, in accordance with the applicable benefit and vacation plan documents. For the avoidance of doubt, your participation in such plans will be subject to the terms and conditions set forth in the applicable benefit plan documents.
   
Termination of Employment: This Agreement, and your employment hereunder, may be terminated at any time during the Term, for any reason, by the Board upon at least 30 calendar days’ prior written notice (or any alternative time period agreed to by the parties); provided, that, the Board may terminate your employment immediately for Cause. Upon your termination for any reason, the Company will pay you your accrued but unpaid Base Salary through your date of termination and any accrued but unpaid reasonable business expenses through your date of termination (the “Accrued Obligations”), with such amount paid in compliance in accordance with applicable law. In addition to the Accrued Obligations, you may be entitled to receive severance benefits and equity award acceleration as described below.
   
Resignation on Termination:Unless otherwise indicated in a writing to you from the Board, upon your termination of employment with Company for any reason, and without any further action on your part, you will be deemed to immediately resign all officerships, directorships, managerships, and other positions you hold with the Parent, the Company and their affiliates. If for any reason this provision is determined to be insufficient to effectuate such resignations, you agree to sign any documents or instruments the Company determines necessary to effectuate such resignations.
  
Voluntary Resignation Without Good Reason: This Agreement and your employment hereunder may terminate at any time during the Term provided that you give the Board at least 90 calendar days’ prior written notice of your resignation without Good Reason (which 90-day period may be waived by the Board or extended to a longer period if agreed to by the parties). In such case, you will only be entitled to the Accrued Obligations. The Company may, in its sole discretion, waive the notice provided under this section, in which case your employment will terminate on the earlier date specified by the Company.
   
Death or Disability: This Agreement, and your employment hereunder, will terminate immediately upon your death or Disability (as defined in Exhibit A). In such case, you (or your spouse or estate) will only be entitled to the Accrued Obligations.
   
Termination and Severance Without Cause or for Good Reason: In the event your full-time employment is terminated by the Board without Cause or by you for Good Reason (as defined in Exhibit A), then, in addition to the Accrued Obligations, and subject to your timely execution (and non-revocation) of the release described below, you will be entitled to receive a cash severance payment equal to the sum of: (i) 12 months of your then Base Salary plus one month of your then Base Salary for every completed year of service (to a maximum of 16 months); (ii) 6 times the monthly amount that is charged to COBRA qualified beneficiaries for the same medical coverage options elected by you immediately prior to your last day of employment; and (iii) the greater of (a) your average STIP paid in the two prior years and (b) 80% of the target annual STIP for the current fiscal year (collectively, the “Severance Amount”). The Severance Amount will be paid to you in installments over a 12-month period, in accordance with the Company’s normal payroll cycle, with the first installment paid during the first payroll period following the expiration of the release revocation period described below. In addition to the Severance Amount, you will be entitled to receive a pro-rata STIP for the year in which your termination occurred, with such pro-rata STIP paid at the same time described above.
   
Full Vesting of Equity Awards on Change of Control: Upon the closing of a transaction during the Term that results in a Change of Control, and notwithstanding anything in the Equity Plan to the contrary, your Sign-On RSUs and any other restricted stock units awarded you shall immediately vest.

 

3

 

 

Release Required to Receive Severance: In order to receive the severance pay and other benefits described above, you must, no later than 60 calendar days following your last day of employment, execute (and not revoke) a general release and waiver of any claims that you may have in connection with your employment and termination of employment with the Parent, Company and its affiliates. Notwithstanding anything in this Agreement to the contrary, if the Company concludes that the severance pay and benefits are subject to Section 409A of the Internal Revenue Code, and if the consideration period described in the release, plus the revocation period described in the release, spans two calendar years, then, to the extent required by Section 409A of the Code, such severance payments and benefits shall not begin to be paid until the second calendar year (and such first installment shall include installment payments that would otherwise have been made prior to such date).
   
Restrictive Covenants: This Agreement is contingent upon you, on your Start Date, signing the Restrictive Covenant Agreement attached hereto as Exhibit B.
   
Cooperation:Following the termination of your service with the Company for any reason during the Term, you agree to cooperate fully with the Company and with the Company’s counsel in connection with any present and future actual or threatened litigation, administrative proceeding or other investigation involving the Parent, the Company or any affiliate that relates to events, occurrences or conduct occurring (or claimed to have occurred) during your employment. You are hereby instructed to tell the truth in any litigation, administrative proceeding, or other investigation involving the Parent, the Company and its affiliates, and nothing herein shall be deemed or construed to suggest otherwise. If your cooperation is required pursuant to this section, the Company will: (i) reimburse you for reasonable out-of-pocket expenses (excluding legal fees); and (ii) if such cooperation is required during a period of time you are not receiving severance pay, pay you hourly compensation at a rate equivalent to your hourly Base Salary at the time of your termination of employment.
  
Non-Disparagement; Social Media: During the Term and following the termination of your service for any reason, you agree that you will not criticize, defame, be derogatory toward or otherwise disparage the Parent, the Company, any affiliate, their products, services, or the Parent’s or the Company’s past, present and future officers, directors, managers, stockholders, agents, representatives, employees, or affiliates, or its or their business plans or actions, to any third-party, either orally or in writing; provided that that this provision will not preclude you from giving truthful testimony in response to a lawful subpoena or preclude any conduct protected under any local, state or federal law, including those providing “whistleblower” protection to you or the right to engage in concerted activities. Finally, on the date of your termination of service for any reason, you agree to update your profile on social media websites (such as LinkedIn) to reflect that you are no longer an employee of the Company or Parent.
   
Dispute Resolution: You and the Company agree to meet to informally in a good faith effort to resolve any issues arising under this Agreement. If the parties are unable to resolve their differences, they agree to submit to binding arbitration in Phoenix, Arizona, any and all claims and disputes arising hereunder. The parties agree that any dispute will be heard by a single arbitrator, applying Arizona and Federal substantive law, as applicable, in accordance with the American Arbitration Association’s Employment Arbitration Rules. If necessary, an action may be brought in any court of competent jurisdiction solely to compel arbitration or enforce an arbitration award (or for injunctive relief to enforce the Restrictive Covenants of this Agreement). This Agreement to arbitrate survives the termination of your employment.
   
  You expressly agree and understand that, by agreeing to arbitration to resolve all claims described herein, you, as well as the Company, are waiving your right to a jury or court trial for all such claims. You further understand that arbitration is a private, claim resolution process which utilizes a neutral third-party, instead of a judge or jury, to resolve all claims and typically has more limited discovery than in a case filed in court. You understand that you may refuse to sign this Agreement, but that if the Agreement is not signed, you will not be entitled to the compensation and benefits outlined in this Agreement.
   
  Employee must initial above, indicating their agreement to submit all claims to arbitration.

 

4

 

 

Return of Property: Upon the Company’s request or your termination of employment for any reason, you shall promptly return to the Company all property of the Company, including, but not limited to, originals and hard and electronic copies of records, documents, Confidential Information, computer and office equipment, other equipment, plans, designs, electronic devices, keys, access cards, passwords, credit cards, and other tangible and intangible items, in whatever form, in your possession or control. You understand that all electronic mail, equipment, and all computer hardware and software are property of the Company.
   
Miscellaneous:To the extent required by law, the Company shall withhold from any payments due to you under this Agreement any applicable federal, state or local taxes. You hereby acknowledge that neither the Company nor any of its affiliates, shareholders, members, directors, managers, officers, employees, agents or representatives have provided you with any tax-related advice with respect to the matters covered by this Agreement and that you are solely responsible for obtaining your own tax advice with respect to the matters covered by this Agreement.
  
  This Agreement shall be governed by and construed in accordance with the laws of the State of Arizona without regard to conflicts of law principles. If any term or provision of this Agreement is declared by a court or tribunal of competent jurisdiction to be invalid or unenforceable for any reason, this Agreement shall remain in full force and effect, and either: (i) the invalid or unenforceable provision shall be modified to the minimum extent necessary to make it valid and enforceable; or (ii) if such a modification is not possible, this Agreement shall be interpreted as if such invalid or unenforceable provision were not a part hereof.
   
  Each party acknowledges that such party had the opportunity to be represented by counsel in the negotiation and execution of this Agreement. Accordingly, the rule of construction of contract language against the drafting party is hereby waived by each party.
   
Section 409A of the Code: This Agreement shall comply with Section 409A of the Internal Revenue Code or an exception thereto and each provision of the Agreement shall be interpreted, to the extent possible, to comply with Section 409A or an exception thereto. Nevertheless, the Company does not and cannot guarantee any particular tax effect or treatment of the amounts due under this Agreement. Except for the Company’s responsibility to withhold applicable income and employment taxes from compensation paid or provided to you, the Company will not be responsible for the payment of any applicable taxes on compensation paid or provided pursuant to this Agreement. Neither the time nor schedule of any payment under this Agreement may be accelerated or subject to further deferral except as permitted by Section 409A of the Internal Revenue Code and the applicable regulations. You do not have any right to make any election regarding the time or form of any payment due under this Agreement. Notwithstanding anything in this Agreement to the contrary, if the Company concludes that the Severance Amount is subject to Section 409A of the Internal Revenue Code, then no such Severance Amount will be paid prior to your “separation from service” as defined in Treasury Regulation Section 1.409A-1(h) (applying the default rules of Treasury Regulation Section 1.409A-1(h)). Installment payments made pursuant to this Agreement shall be treated as separate payments for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii).
   
  If the Severance Amount is subject to Section 409A of the Internal Revenue Code, and if you are a “specified employee” as defined in Treasury Regulation Section 1.409A-1(i)(1) on the date of your termination of employment, such payments shall not begin until the first day of the seventh month following your “separation from service” as defined in Treasury Regulation Section 1.409A-1(h) (applying the default rules of Treasury Regulation Section 1.409A-1(h)) (and such first payment shall include all prior payments that would otherwise have been made prior to such date).

 

5

 

 

Section 280G of the Code: In the event that any payments, distributions, benefits or entitlements of any type payable to you, whether or not payable upon a termination of employment (“Payments”): (i) constitute “parachute payments” within the meaning of Section 280G of the Code; and (ii) but for this Section would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code (the “Excise Tax”); then the Payments shall be reduced to such lesser amount (the “Reduced Amount”) that would result in no portion of the Payments being subject to the Excise Tax; provided, however, that such Payments shall not be so reduced if a nationally recognized accounting firm or compensation consulting firm selected by the Company (the “Accountants”) determines that without such reduction, you would be entitled to receive and retain, on a net after-tax basis (including, without limitation, any excise taxes payable under Section 4999 of the Internal Revenue Code, federal, state and local income taxes, social security and Medicare taxes and all other applicable taxes, determined by applying the highest marginal rates which applied (or is likely to apply) to you for the tax year in which the Payments are to be made, or such other rate(s) as the Accountants determine to be likely to apply to you in the relevant tax year(s) in which any of the Payments are expected to be made), an amount that is greater than the amount, on a net after-tax basis, that you would be entitled to retain upon receipt of the Reduced Amount.  Unless otherwise agreed in writing, any determination made under this paragraph shall be made in good faith by the Accountants in a timely manner and shall be binding on the parties absent manifest error. In the event of a reduction of Payments pursuant to this paragraph, the Payments shall be reduced in the order determined by the Accountants that results in the greatest economic benefit to you in a manner that would not result in subjecting you to additional tax under Section 409A of the Internal Revenue Code. For purposes of making the calculations required by this paragraph, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of the Internal Revenue Code, and other applicable legal authority.  The Accountants shall provide detailed supporting calculations to both you and the Company and the Company shall bear the cost of all fees charged by the Accountants in connection with any calculations contemplated by this paragraph. If the provisions of Sections 280G and 4999 of the Internal Revenue Code are repealed without succession or if the Company determines that such provisions do not apply to it and/or you for whatever reason, this paragraph shall be of no further force or effect.

 

If you are in agreement with the terms and conditions of this Agreement, please execute and date the Agreement and return a copy to me.

 

  Sincerely,
   
  ElectraMeccanica Vehicles Corp.
   
    By: /s/ Susan E. Docherty
    Susan E. Docherty, Chief Executive Officer
   
Accepted and agreed to:  
   
/s/ Stephen Johnston   10/9/23
Stephen Johnston Date

 

6

 

 

Exhibit A

 

Offer Letter Definitions

 

Cause” to terminate your employment shall exist if the Company reasonably determines after due inquiry that any one or more of the following has occurred: (i) your commission or conviction of, or plea of guilty or nolo contendere to, a felony; (ii) your material breach of this Agreement, any other agreement you have entered into with the Company which is not cured, if curable, within 10 days following the Company’s written notice to you of such breach; (iii) any breach of fiduciary duty you have to the Company or any misconduct that is materially injurious to the Company or a violation of the Company’s harassment or discrimination policies; (iv) your habitual drug or alcohol use which materially impairs your ability to perform your duties for the Company; (v) your engaging in fraud, embezzlement or any other illegal conduct that is materially injurious to the Company or any of its affiliates; (vi) deliberate or intentional refusal, or habitual failure to discharge your employment duties, responsibilities or obligations or to follow the Company’s policies or procedures which is not cured, if curable, within 10 days following the Company’s written notice to you of such behavior; or (vii) your engaging in any illegal, unethical, or immoral act (inside or outside of the scope of your employment) that results in material reputational or financial harm to the Company or any of its affiliates.

 

Change of Control” shall have the meaning ascribed to it in the Equity Plan. Notwithstanding the foregoing, a transaction that would otherwise be deemed a “Change of Control” that is consummated within nine months of the Start Date shall not constitute a Change of Control under this Agreement.

 

Disability” means you are unable to perform your duties under this Agreement for 90 consecutive days in any 12-month period.

 

Good Reason” means: (i) a material diminution of your Base Salary; (ii) a material diminution of your authorities, duties, or responsibilities; (iii) any action or inaction that constitutes a material breach of this Agreement by the Company; or (iv) material change in the geographic location at which you are required to provide services. For a termination to constitute “Good Reason” for purposes of this Agreement: (1) you must provide a notice of termination to the Company within 30 days of the initial existence of the facts or circumstances constituting such event; (2) the Company must fail to cure such facts or circumstances within 30 days after receipt of such notice; and (3) you must actually terminate your employment within 30 days after the expiration of the cure period described in clause (2).

 

7

 

 

Exhibit B

 

Employee Restrictive Covenant Agreement

 

In consideration for ElectraMeccanica Vehicles Corp. and ElectraMeccanica USA, LLC (collectively, the “Company”) agreement to employ me and provide me with the compensation and benefits described in the attached Agreement and access to the Company’s Confidential Information (as defined below) and trade secrets, I understand, acknowledge and agree, beginning as of the Start Date (as defined in the attached Agreement), as follows:

 

Restrictive Covenants: Non-Solicitation of Customers/Prospective Customers. You agree, for the duration of the Time Limit (as defined below), that you will not, either directly or indirectly, or in any individual or representative capacity, request or solicit any of the Company’s current customers or clients with whom you have had contact in the past year to withdraw, curtail, cancel, or decrease the level of their business with the Company or request that they do business with any third party in competition with the Company. You further agree that, for the duration of the Time Limit, you will not, either directly or indirectly, or in any individual or representative capacity, request or solicit any of the Company’s prospective customers (defined as any person or entity who has been directly solicited to become a customer or client by the Company and with whom you have had contact with within the past year or possesses Confidential Information about) or clients with whom you have had contact with in the past year or possesses Confidential Information about to forgo doing business with the Company or request that such prospective customer or client do business with any third party in competition with the Company.
   
  Non-Solicitation of Employees/Applicants. You agree, for the duration of the Time Limit, that you will not, either directly or indirectly, or in any individual or representative capacity, solicit, induce or encourage or attempt to solicit, induce or encourage any Company employee and/or applicant to terminate his/her employment or prospective employment with the Company.
   
  Non-Competition. You agree, for the duration of the Time Limit, (as defined below), that you will not, either directly or indirectly or in any individual or representative capacity, be employed by, engage, own, manage, operate, control, aid, or assist another in the operation, organization or promotion of, participate in, advise, contract with or otherwise engage in any manner with the ownership, management, operation, or control of any business, which has a place of business or regularly conducts business in the Geographical Limit (as defined below) and that promotes or sells products or services competitive with those of the Company. You acknowledge and agree that a business will be deemed “competitive” with the Company if it performs any of the services or produces, distributes or sells any of the products or services provided or offered by the Company during the term of your relationship with the Company.
   
  Tolling. The non-competition and non-solicitation Time Limits set forth above shall be tolled during any period in which you are in breach of the restrictions set forth herein.
   
  Reasonable Limitations. You hereby acknowledge and agree that the covenants and obligations made and undertaken in this Agreement are fair and reasonable with respect to duration, geographic area and scope of activity, and do not (and shall not) prevent you from earning a livelihood in complying with the covenants herein.
   
  Injunctive Relief. You agree that a breach of the covenants described herein will result in substantial and irreparable damages to the Company, which would be difficult to fully ascertain and calculate, and, by reason of such fact, you agree that, in the event of any such breach or threatened or anticipated breach, the Company will have the right to a restraining order and injunction, both temporary and permanent, enjoining and restraining any such breach or threatened breach, without the necessity of proving actual damages or posting a bond. Such injunctive relief will be in addition to any other remedies available to the Company at law or in equity.

 

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  Survival of Restrictive Covenants. Your acknowledgements and agreements set forth in this Agreement shall survive the expiration or termination of this Agreement and the termination of your employment with the Company for any reason.
   
Notice to Future Employers: You agree that you will notify, and the Company shall have the right to notify, any future or prospective employers, or individuals or entities with whom you may be entering into a contractual relationship, of the Restrictive Covenant provisions of this Agreement for purposes of ensuring that the Company’s interests are protected.
   
Company Proprietary Information: While you are providing services to the Company, the Company may disclose or make available to you, Confidential Information. By signing this Agreement, you agree to: (i) protect and safeguard the confidentiality of the Confidential Information with at least the same degree of care as you would protect your own confidential information, but in no event with less than a commercially reasonable degree of care; and (ii) not use or disclose the Confidential Information, or permit it to be accessed, used or disclosed, for any purpose other than to carry out the duties assigned to you by the Company or as may be required to be disclosed pursuant to applicable federal, state or local law, regulation or a valid order issued by a court or governmental agency of competent jurisdiction. Upon your termination of service for any reason, or upon the Company’s written request, you shall promptly return to the Company all copies, whether in written, electronic or other form or media, of the Confidential Information, or destroy all such copies at the Company’s written request and certify in writing to the Company that such Confidential Information has been destroyed. In addition to all other remedies available at law, the Company may seek equitable relief (including injunctive relief) against you to prevent the breach or threatened breach of this confidentiality covenant and to secure its enforcement. Notwithstanding anything in this Agreement to the contrary, pursuant to the Defend Trade Secrets Act of 2016, you shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If you file a lawsuit for retaliation by the Company for reporting a suspected violation of law, you may disclose the Company’s trade secrets to your attorney and use the trade secret in the court proceeding, if you file any document containing the trade secret under seal and do not disclose the trade secret, except pursuant to court order.
   
  In addition to the obligations above, we may ask that you also sign the Company’s standard Confidentiality and Intellectual Property Assignment Agreement.
   
Definitions: For purposes of this Agreement, the following terms shall have the following meanings:
   
  Confidential Information means non-public information about the Company’s business affairs, products, services, confidential intellectual property, trade secrets, third-party confidential information and other sensitive or proprietary information, whether orally or in written, electronic or other form or media, and whether or not marked, designated or otherwise identified as “confidential.” Confidential Information shall not include information that, at the time of disclosure and as established by documentary evidence: (i) is or becomes generally available to and known by the public other than as a result of, directly or indirectly, any breach of this Agreement by you; (ii) is or becomes available to you on a non-confidential basis from a third-party source, provided that such third-party is not and was not prohibited from disclosing such Confidential Information; (iii) was known by or in the possession of you prior to being disclosed by or on behalf of the Company; or (iv) was or is independently developed by you without reference to or use, in whole or in part, of any of the Confidential Information.

 

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  Geographical Limitmeans the United States of America; if a court determines that the United States of America is too broad, then the state of Arizona; if a court determines that Arizona is too broad, then Maricopa and Pima County; if a court determines that Maricopa and Pima County is too broad, then Maricopa County only; if a court determines that Maricopa County is too broad, then the greater-Phoenix area, Arizona.
   
  Time Limit means the term of your employment with the Company and for a period of 12 months thereafter; if a court determines that 12 months is longer than necessary to protect the Company’s legitimate interests, then 9 months; if a court determines 9 months is longer than necessary to protect the Company’s legitimate interests, then 6 months.
   
Miscellaneous: This Agreement shall be governed by and construed in accordance with the laws of the State of Arizona without regard to conflicts of law principles. If any term or provision of this Agreement is declared by a court or tribunal of competent jurisdiction to be invalid or unenforceable for any reason, this Agreement shall remain in full force and effect, and either: (i) the invalid or unenforceable provision shall be modified to the minimum extent necessary to make it valid and enforceable; or (ii) if such a modification is not possible, this Agreement shall be interpreted as if such invalid or unenforceable provision were not a part hereof.
   
  Each party acknowledges that such party had the opportunity to be represented by counsel in the negotiation and execution of this Agreement. Accordingly, the rule of construction of contract language against the drafting party is hereby waived by each party.
   
  The dispute resolution provisions of the Offer Letter attached hereto are incorporated by reference and by signing below you acknowledge and agree that any dispute arising under this Agreement will be resolved in accordance with the procedures set forth in the Offer Letter.

 

Accepted and agreed to:  
   
/s/ Stephen Johnston   10/9/23
Stephen Johnston Date

 

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Exhibit 99.1

 

October 12, 2023

 

Dear Shareholders:

 

By now, many of you have had a chance to read our announcement last week that we have terminated the proposed agreement to merge with Tevva. I also know that you - understandably - have many questions. While it will take more time than a week to define and commit fully to a new path, ElectraMeccanica’s Board and management team do have a plan for moving forward. I’d like to share some of our thinking, and in so doing address the major areas of shareholder inquiry based on what I’ve heard from your emails and calls.

 

First, we’re confident with our decision to terminate the merger. At this time, we cannot go into much more detail than we provided in last week’s release. Suffice it to say, that - while extremely disappointing – exiting the agreement arrangement was our best option in terms of preserving opportunities to create shareholder value.

 

Second, the Tevva combination wasn’t ElectraMeccanica’s only merger opportunity. During the first and second quarters, we evaluated roughly 100 companies, and had exploratory talks with nearly a dozen. This category and company due diligence performed over the last 6 months now will be leveraged going forward. We’re in direct contact with several additional companies that approached us after last week’s termination announcement, including companies that were previously assessed.

 

Third, ElectraMeccanica’s resources and experience are particularly valuable in the current, difficult economic climate - which shows few signs of easing anytime soon. Loans and investments have slowed dramatically, especially in the EV sector. Capital is less available and when it is available, it’s costly. Manufacturing and assembly space is also at a premium. This means that the right kind of transaction, with the right business, very much remains a viable path to creating longer-term value.

 

Fourth, maximizing shareholder value by identifying the shortest path to scaled, profitable revenue remains our most urgent, and top, priority. While we work on redefining that path, we’re watching every dollar. I expected in Q4 2022 and Q1 2023 that we would be in transition as a business, and so methodically “leaned out” ElectraMeccanica’s balance sheet. Our 50-person team is over 80% smaller than it was 10 months ago, which has substantially lowered our burn rate. And given the flexibility of the Mesa space, contract assembly still remains an option for short-term, incremental revenue generation - again, with the right partner. We are in talks with several candidates.

 

Transforming a business is never easy. It can get more challenging, before it gets better. The bottom line? We continue to be well positioned, prepared and disciplined in pursuing our goal of creating value with the assets that we have. I’ll keep you updated, and I look forward to sharing positive news soon.

 

Susan Docherty, ElectraMeccanica CEO and Board Member

 

 

 

 

Safe Harbor Statement

 

Except for the statements of historical fact contained herein, the information presented in this news release and oral statements made from time to time by representatives of the Company are or may constitute “forward-looking statements” as such term is used in applicable United States and Canadian laws and including, without limitation, within the meaning of the Private Securities Litigation Reform Act of 1995, for which the Company claims the protection of the safe harbor for forward-looking statements. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any other statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects” or “does not expect,” “is expected,” “anticipates” or “does not anticipate,” “plans,” “estimates” or “intends,” or stating that certain actions, events or results “may,” “could,” “would,” “might” or “will” be taken, occur or be achieved) are not statements of historical fact and should be viewed as forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks and other factors include, among others, our ability to identify, negotiate, and conclude strategic transactions that increase shareholder value, and other risks of the automotive industry including, without limitation, those associated with the environment, delays in obtaining governmental approvals, permits or financing or in the completion of development or construction activities or claims limitations on insurance coverage. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Many of these factors are beyond the Company’s ability to control or predict. Important factors that may cause actual results to differ materially and that could impact the Company and the statements contained in this news release can be found in the Company’s filings with the Securities and Exchange Commission. The Company assumes no obligation to update or supplement any forward-looking statements whether as a result of new information, future events or otherwise. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release and in any document referred to in this news release. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities.

 

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