2012

West Coast Customs Business Summary and Term Sheet

Submitted by Wil Cashen West Coast Customs Partners, LLC, 2/6/2012

West Coast Customs is a car remodeling company started in 1993 by Ryan Friedlinghaus on a $5,000.00 loan from his grandfather, Edward Cifranic, becoming a premier world brand. West Coast Customs has become the brand leader globally for custom cars of all makes and models building its value to more than $28 Million. West Coast Customs is the chosen automotive brand of the Hip-hop generation, blending poetry, art and engineering into a customized kaleidoscope of vehicle and product designs. West Coast Customs is ranked as the #1 global custom automotive brand. The brand evokes quality, style, entertainment and performance to all generations Y, X, Zoomers and Boomers. This a-mast brand energy has made West Coast Customs a truly versatile and portable consumer brand finding new markets and is redefining current ones. West Coast Customs was created by Ryan Friedlinghaus who deeply understood the Hip-hop world that projects the bad boy image colored with artistic tattoos, retro mod designs, music and the raw human desire for celebrity attention. Ryan's secret recipe for matching individual personalities to metal and carbon-fiber creates a unique soulful relationship between the vehicle and it's owner. This attachment of man and machine has for more than seven decades been an indefinable bond unable to find a path into main stream retail. Insertions into consumer markets of automotive customizers in the past have been limited to auto parts, car accessories, toys and minor apparel offerings. West Coast Customs is the first and only automotive custom designer and builder to cross the unforgiving crevasse between the automotive aftermarket and main stream global retail. Many factors in technology, media, the internet, market competition and the human condition have lead to the success of West Coast Customs as a growing consumer brand. Growing West Coast Customs WEST COAST CUSTOMS PARTNERS, LLC. has been created to expand the West Coast Customs brand, product and service offering into local markets around the world. WCCP, LLC is a new company designed and created specifically for the sales, support and service of WCC dealerships globally. Automotive local customization and global distribution is the principle and primary market opportunity for West Coast Customs today. A West Coast Customs Partners network of automotive dealership sales and vehicle customization locations of branded product offerings will service the Hip- hop market of X'ers and Y'ers and will fill the need for retro design Zoomers and Boomers. The business activities of WCCP are: 1. Create greater WCC brand and product awareness 2. Identify out-of-the-box market opportunities 3. Establish WCC dealerships throughout North America in major local markets 4. Support organic marketing and advertising in WCC dealer markets 5. Create WCC dealer events and product presentation programs 6. Maintain and control dealership WCC inventories 7. Support dealer sales leads for WCC products and vehicles 8. Provide direct customer support for WCC Dealers 9. Work with dealers to improve WCC vehicles and products 10. Train and support WCC dealer service department 2

Business Equity Value creation of West Coast Customs Partners, LLC. is achieved through a 50 year West Coast Customs North American exclusive license and rights use grant from Ryan Friedlinghaus in exchange for 6,000,000 shares of common stock in WCCP, LLC and other cash considerations. The license represents the exclusive brand use of the WCC name for use in the following market segments: 1. New Car Dealers Sales and Service 2. Used Car Dealers Sales and Service 3. Auto Parts Stores (chains or Mom and Pops) 4. Performance Parts Stores 5. Performance Shops 6. Online Performance Parts Catalogs 7. Automotive OEM Original Equipment Manufacturers Sales and Service 8. Eight (12) West Coast Customs Used Car Dealerships Sales and Service Valuation The valuation of West Coast Customs Partners, LLC. is based on (1) the stated value of the West Coast Customs brand (2) 10% (ten percent) ownership (stock purchase) in West Coast Customs, Inc. (3) exclusive wholesale distribution rights of (one-off or production) WCC vehicles, designs, models, body kits, interior kits, etc. The West Coast Customs brand - equity value is documented as follows: 1. Brand awareness value= $205,367,192 (segment leader) 2. Broadcast Media value= $28,599,127 (television views) 3. Print Media value= $623,428 4. Online value= $30,312,109 Total Current Brand and Media Value= $264,901,856 The West Coast Customs forecast brand - equity value is documented as follows: 1. 2012 Total Brand and Media Value= $264,901,856 2. 2013 Total Brand and Media Value= $325,349,602 3. 2014 Total Brand and Media Value= $512,699,125 4. 2015 Total Brand and Media Value= $909,337,924 5. 2016 Total Brand and Media Value= $1,657,545,613 Market Globally, Young Urban Consumers enjoy an aggregate income of $850 billion annually. These X- Gen and Y- Gen trendsetters and influencers who affiliate with the hip-hop culture exercise a powerful impact on fashion, media, entertainment, transportation design, interior design and other key consumer-focused sectors of this lifestyle. The automotive industry has spent hundreds of millions attempting to reach the 79 million Y- Gen market with a corporate white washed messaging of cool and hip. For the majority of X- Gen'er and Y- Gen trendsetters and influencers the auto companies have failed in their attempts to reach this artistic, highly tech savvy, knowledgeable, media and entertainment driven lifestyle group. West Coast Customs without spending one dollar on advertising or other forms of Pay-for ad and promotions, has become the raining leader of this category attracting major music celebrities such as Wil- I-AM and Justin Bieber and many other major big and small screen stars that have become a part of WCC's custom car world, willingly promote the WCC brand on a global scale through all layers on media exposure. This endearing relationship that has been nurtured between WCC, the celebrity and the global Hip-hop audience places the WCC brand far in front of all competition vying for attention in this large and special market lifestyle segment. 3

The Customer Over the past decade West Coast Customs has positioned its brand as the world renowned trendsetter leader in the automotive Hip-hop lifestyle custom vehicle market for X, Y, Zoomers and Boomer generations. The company has created a strong sustainable business model and market segment expansion strategy to capture hundreds of automotive dealerships in North America and around the world. West Coast Customs has built brand awareness with the majority of X- Gen and Y- Gen trendsetters and influencers making it a valuable brand for automotive dealerships that have an interest in becoming a WCC brand ambassador and product center. WCC's instant brand association with the new car dealer provides the consumer with an emotional connection establishing a link in the customers mind between their dealership and WCC's products and services. WCCP's Customer Analytics Average Annual Expenditures Early Yers' Under 25 Transportation $5,464 Entertainment $1,608 Personal Electronics* $985 Personal Computers $362 Travel $1,000
*Includes: Smart Phones, iPods, iPads, DVD Players, other Digital readers

Yers' 25-34 $8,699 $2,766 $4,932 $998 3,602

TVB

Xers' 26-44 $12,960 $5,855 $3,923 $2,320 $4,849

Zommers 45-64 $11.850 $7,623 $2,523 $3,990 $9,465

Boomers 65+ $4,500 $2,394 $1,001 $190 $6,430

Source:

With numbers estimated as high as 70 million, Generation Y Generation X encompasses the 44 to 50 million Americans born between 1965 and 1980. As a result, Generation X is independent, resourceful and self-sufficient. In the workplace, Generation X values freedom and responsibility. The first generation to grow up with computers, technology is woven into their lives Represents 25%+ of the population in the United States X-Y have a spending power of $200 billion Yers' Trend setters men when asked about luxury "think Cars" Yers' watch 22% less TV then Xers, and 50% less than Boomers Yers' are a confident segment that prefers to spend over saving Yers' are brand loyal and feels personally connected to their choices Yers' get information from the social web Yers' remains loyal to brands but dont like paying full price The X-Y generations demand home entertainment systems, smart-phones and the internet. Automobile marketers must offer Y-Xers' connectivity technology they consider important. Brands must be aware of disenfranchisement of X-Yers'. X-Yers' are "mobile generations Apple most like Brand Trump most disliked brand Gen Y Trend setters women when asked about luxury "CC, High end hotels" Male Yers', luxury means cars: BMW, Ferrari, Porsche, Lamborghini and Audi. Seven out of ten top ranked brands by US Gen Y males, are automakers. Yers' are family and friend oriented. This is why cell phones are so attractive to them. Word-of-mouth marketing is very powerful with Yers' because they are so friend conscious. 4

For X-Yers' viral marketing is a popular and effective medium. Yers' are very optimistic and have a positive outlook on the world. Non-profit sponsorships and cause marketing efforts get a positive response with Yers'. Yers' are tenacious doers; offer products that help them become better. Zoomers and Boomer parents of Gen Yers', are close to their children, and still buy things for them. Concerts (Yers' love live music) and Movies. X-Yers' love extreme sporting events (skateboarding, snowboarding, BMX). Hiking events (Gen Y love the outdoors). Video games and video game competitions

Market Size 2011 Automotive: Accessories (dealer and consumer installed) Custom Build to Order (Scion, Honda- like) Dealer Option Installed Factory Custom (graphics, parts add on, engine) One-Off (Special custom)
Source:
SEMA, NADA, AUTONEWS, AUTO BLOG MKR

$139,860,012 $8,892,468,921 $39,860,012 $972,453,664 $16,402,893 $9,432,435.993 $849,323,167

2011 Parts: New Car Custom/Special Parts (Mopar-like) Automotive Chain Custom/Special Parts (Performance-like)
Source:
SEMA, NADA, AUTONEWS, MKRESEARCH, EMAV

Opportunity West Coast Customs Partners Market Opportunity 2011(used 2011only) Year Sales Percentage Average Margin Gross Profit 2013 .0001% 10% $104,464 2013 .001% 18% $1,808,035 2014 .004% 21% $8,403,749 2015 .008% 25% $20,089,285 2016 .011% 25% $27,622,767 2017 .013% 26% $33,950,891 Profit Picture West Coast Customs Partners Profit Picture Year COGs MFG Fee 2013 90% 08% 2013 82% 07% 2014 79% 06% 2015 75% 04% 2016 75% 03% 2017 75% 03% Staffing West Coast Customs Partners Head Count Year Officers Sales 2013 2 1 2013 3 6 2014 4 11 2015 5 15

$10,044,642,609 Annual Sales $1,044,642 $10,044,642 $40,017,857 $80,357,140 $110,491,068 $130,580,353

Operations $420,000 $680,000 $1,398,230 $2,808,045 $4,400,302 $5,945,033

Expenses $96,000 $155,000 $325,000 $1,550,000 $4,000,582 $4,321,033

MFG Fee $75,214 $635,012 $2,360,960 $2,585,036 $2,738,075 $3,206,883

Profit ($486,750) $338,022 $4,319,558 $13,146,204 $16,483,807 $20,477,341

Operations-Logistics 2 5 8 12

Total 5 14 23 32 5

Year 2016 2017

Officers 5 6

Sales 20 26

Operations-Logistics 20 22

Total 45 54

Product Strategy WCC's strategy following the 4 Ps' (product, place, price, promotion) are based on capturing the consumer relationship via local WCC dealer presence and sales and service activities. -West Coast Customs products draw customers from all over the world that seek to create and own a unique vehicle built by WCC. The X- Gen and Y- Gen customer's passion for personal expression and celebrity status amongst their circle of friends and community creates the need for WCC's products. -Through the expansion of the West Coast Customs brand to local markets around the world, allows the West Coast Customs brand and products to be accessible to everyone in every market. - West Coast Customs automotive products carry the same pricing structure as does the automotive OEMs. Each market segment or niche' has specific products and options in order to capture and retain significant market share. - West Coast Customs business is to support is local dealerships by helping the dealership enhance and increase the awareness of the West Coast Customs global brand and products. WCC's media promotions are syndicated to all WCC dealerships and include Brand and Product PR and advertising for all media outlets such as local television, radio, internet, print, event and specials. Brand Strategy Customer brand and product awareness, preferences and expectations have been created through the airing of hundreds of WCC's award winning television programs for more than a decade. This method of direct communication information and entertainment has helped make West Coast Customs the global custom vehicle brand authority for X, Y, Zoomers and Boomer generations. -Long-term marketing support will be through the creation and distribution of global television programming content, online video programming content, local WCC infotainment radio and television syndication, local WCC dealer advertising and promotions and WCC's global online Social Community of X, Y, Zoomers and Boomer generations of automotive enthusiasts. -WCC is building its online Social Community WCC automotive enthusiasts and is focusing the design and use for the 67%Y Gen's that use social networks and the 36% of Gen Xer's. -The Hip-hop generation of Xer's and Yer's immerse themselves in technology and an artistic creative lifestyle that cements the relationship between West Coast Customs brand, products and end customer with a long lasting bond. Business Strategy West Coast Customs Partners provides to its dealers: (i) an ability to sell premium brand products and services that have less pricing pressure (ii) highly profitable, focused on superior valued products and custom vehicle offerings (iii) Urban Style, Hip-hop unique by design products (iv) little to no retail pricing transparency in markets (v) local sales of a true value added unique and personalized custom product (vi) build a network of dealers promoting customer confidence of a well know brand in hundreds of local markets. West Coast Customs restore the dealers ability to continuously offer a premium product in multiple market segments. Examples of West Coast Customs vehicle products market segments: Compact Sports Car Sport Roadster

Sedan

SUV

Pickup

Cross Over

Sport Utility

Jeep

Companies like TrureCar.com and now even the automotive ,auto manufactures themselves continue to make it harder for dealers across North America to maintain consistent profitability. This environment is driving dealers to find new ways to and value to the product of which the vehicle price is not controlled or (given) to the customer by the manufacture or a third party website service. Pricing transparency displayed on the Internet by anyone is bad for dealers and means, price negotiating is being taken out of dealers' hands, a trend that will continue to grow as the auto manufactures work to control and own the customer. Like personal computers, more cars are built to specification at the factory or the dock for buyers who ordered them in advance online. For automakers, personalization is good business and bigger profits. As an example; Mini buyers typically add $5,000 in extras above the $17,500 base sticker on factory- and dealer-installed accessories. Because of "dealer installed options and factory customization", Minis only sat on dealers' lots an average of 21 days last year, compared with 50 days for the premium compact car segment as a whole. Chrysler Group marketing chief Joe Eberhardt says making cars to order could help end the problem of bloated inventories vehicles stacking up either in storage lots or dealers' showrooms. From 75% to 90% of Minis sold are custom-ordered from the factory. Once the customer places an order, it takes two to three months for the car to arrive at the dealer from the plant in Oxford, England. In hot markets such as California, the wait can take three to six months. Buyers can choose from 70 factory-installed options, such as $200 glassy black-lacquer dashboard inserts or $100 racing stripes on the hood. The long wait for custom add on options becomes a time value proposition for the dealer and the customer. Options and accessories provided by the factory branded only as the "Factory Option" carries little "Brand Value Effect" resulting in customers growing impatient or cancelling their orders with the dealer spending extra time with the customer managing expectations of their purchase. West Coast Customs Special Buyers Only, Premium Brand, adds significant value to the customer's vehicle purchase greatly improving the customers purchase experience. Customer Premium Brand Awareness 1-10 (1)=little brand awareness (10)=high brand awareness Brand Yers' Xers' Zoomers Boomers Shelby 3 7 10 10 West Coast Customs 10 10 9 6 7

Customer Premium Brand Awareness 1-10 (1)=little brand awareness (10)=high brand awareness Roush 1 6 8 5 Alpine 1 4 6 7 Saleen 1 6 7 4 AMG 6 10 9 8 Abarth 1 1 4 6 Mopar 7 10 10 9 SVT 1 8 6 4 Deal Points West Coast Customs, Inc. is seeking and investment of $4,000,000 U.S. dollars. 1. The purchase 10% equity in West Coast Customs, Inc. for $1.500,000. 2. The purchase 40% equity in West Coast Customs Partners, LLC. for $1,000,000.(to be used as operating capital) 3. The purchase 50 year West Coast Customs exclusive license for $1,500,000. For use in marketing West Coast Customs branded products, services, vehicles through; (i) New Car Dealers Sales and Service (ii) Used Car Dealers Sales and Service (iii) Auto Parts Stores (chains or Mom and Pops) (iv) Performance Parts Stores (v) Performance Shops (vi) Online Performance Parts Catalogs (vii) Automotive OEM Original Equipment Manufacturers Sales and Service (viii) the creation of up to 12 West Coast Customs Used Car Dealerships Sales and Service centers.

CONFIDENTIAL - DRAFT WEST COAST CUSTOMS PARTNERS, LLC. MEMORANDUM OF TERMS Except with respect to the provisions entitled Confidentiality, which are intended to be, and are, legally binding agreements among the parties hereto, this Memorandum of Terms represents only the current thinking of the parties with respect to certain of the major issues relating to the proposed private offering and does not constitute a legally binding agreement. This Memorandum of Terms does not constitute an offer to sell or a solicitation of an offer to buy securities in any state where the offer or sale is not permitted. THE OFFERING Issuer: Securities: Amount of the offering: Consideration: Number of securities: Price per share: Investors: Anticipated closing date: Milestone payments: West Coast Customs Partners, LLC, a California Limited Liability Company (the Company) Series A Preferred Stock (the Series A Preferred) Up to $4,000,000 Cash 10,000,000 shares $1.00 Ryan Friedlinghaus (founder) or affiliated entities, and other investors acceptable to the Company. Initial closing on or before March 15, 2012, with one or more additional closings within 60 days thereafter. The purchase price will be payable as follows: At the initial closing, the investors will pay an aggregate of $4,000,000 (the Initial Amount). Upon completion of the performance milestones set forth in Exhibit A, the investors may in their discretion invest additional amounts (the Commitment) as set forth in Exhibit A.

If, in the sole and absolute judgment of the investors, a performance milestone has not been satisfied, then the investors may either (i) waive the failure and pay the amount, or a portion thereof, set forth opposite such milestone on Exhibit A, such payment to be conditioned upon the receipt by the investors of a written commitment by the Company to use its best efforts to complete the applicable milestone by a specified date and to satisfy such other conditions as the investors may require, (ii) elect not to make such milestone payment but reserve the right to make subsequent milestone payments, or (iii) terminate the Commitment without any further obligation or liability on the part of the investors. 9

TERMS OF THE PREFERRED Dividends: Dividend rate: 10% Cumulation: Noncumulative Priority: Pari passu with common. Liquidation preference: Amount: Original purchase price plus accrued dividends. Priority: Senior to common. Participation: After payment of preferential liquidation proceeds, the Series A Preferred participates in liquidation proceeds to the common. Limit on participation: Cap on participation at 3 times the initial liquidation preference. Deemed liquidation: A sale of all or substantially all of the Companys assets or a merger or consolidation of the Company with any other company will be treated as a liquidation of the Company. A deemed liquidation may be waived upon the election of the holders of a majority of the outstanding shares of preferred stock. Redemption: Outstanding shares of Series A Preferred will be redeemable at the election of the Company Share Price X 3. The redemption price will be the purchase price plus declared dividends, plus a 40% per annum return from the closing date. The Series A Preferred may be converted at any time, at the option of the holder, into shares of common stock. The conversion rate will initially be 1:1, subject to anti-dilution and other customary adjustments. Each share of preferred stock will automatically convert into common stock, at the then applicable conversion rate, upon (i) the closing of a firmly underwritten public offering of common stock at a price per share that is at least $3.00 (a Qualified Public Offering), or (ii) the consent of the holders of a majority of the then outstanding shares of the Series A Preferred. Adjustments. The conversion price of the Series A Preferred will be subject to adjustment, on a narrow-based weighted-average basis (based on outstanding common and preferred only), if the Company issues additional securities at a price per share less than the then applicable conversion price. Exceptions. There will be no adjustment to the conversion price for: shares issued upon conversion of the Series A Preferred;

Conversion:

Automatic conversion:

Anti-dilution:

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shares or options, warrants or other rights issued to employees, consultants or directors in accordance with plans, agreements or similar arrangements, but not to exceed a total of 2,000,000 shares issued after the closing date; shares issued upon exercise of options, warrants or convertible securities; shares issued as a dividend or distribution on the preferred stock or for which adjustment is otherwise made pursuant to the articles of incorporation (e.g., stock splits); shares issued in connection with a Qualified Public Offering; shares issued or issuable pursuant to an acquisition of another corporation or a joint venture agreement approved by the board (including at least two director elected by the investors share holder vote by 66.67% approval); shares issued or issuable to banks, equipment lessors or other financial institutions pursuant to debt financing or commercial transactions approved by the board (including at least two director elected by the investors share holder vote by 66.67% approval); shares issued or issuable in connection with any settlement approved by the board (including at least two director elected by the investors share holder vote by 66.67% approval); shares issued or issuable in connection with sponsored research, collaboration, technology license, development, OEM, marketing or other similar arrangements or strategic partnerships approved by the board (including at least two director elected by the investors share holder vote by 66.67% approval); shares issued to suppliers of goods or services in connection with the provision of goods or services pursuant to transactions approved by the board (including at least two director elected by the investors share holder vote by 66.67% approval); shares issued pursuant to other transactions approved by the board (including at least two director elected by the investors share holder vote by 66.67% approval); and shares that are otherwise excluded by consent of holders of a majority of the Series A Preferred.

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Pay-to-play requirement:

If a holder of preferred stock fails to participate in this financing or any future Qualified Financing (as defined below) on a pro rata basis, then such holder will have all preferred stock that it owns converted to common stock. If such holder participates in any such financing but not to the full extent of its pro rata share, then the preceding will apply proportionally to the extent of the failure to participate. A Qualified Financing is that portion of any financing by the Company that the board (including two directors elected by the investors and by 66.67% board approval) determines in good faith must be purchased pro rata among the stockholders of the Company subject to the pay-to-play provisions. Such determination will be made regardless of whether the price is higher or lower than any series of preferred stock.

General voting rights:

Each share of preferred stock will have the right to a number of votes equal to the number of shares of common stock issuable upon conversion of each such share of preferred stock. The preferred stock will vote with the common stock on all matters except as specifically provided in the articles of incorporation or as otherwise required by law. So long as at least 4,000,000 shares of Series A Preferred are outstanding, the holders of Series A Preferred will be entitled to elect two directors. The holders of common stock will be entitled to elect three directors. Any additional directors will be elected by the holders of preferred stock and common stock voting together. So long as there are at least 1,000,000 shares of Series A Preferred outstanding, consent of the holders of at least 65% of the Series A Preferred will be required to: alter any provision of the articles of incorporation or the bylaws if it would alter the rights, preferences, privileges or powers of or restrictions on the preferred stock or any series of preferred; increase or decrease the authorized number of shares of preferred stock or any series of preferred; authorize or create (by reclassification or otherwise) any new class or series of shares having rights, preferences or privileges with respect to dividends or liquidation senior to or on a parity with the Series A Preferred or having voting rights other than those granted to the preferred stock generally; approve any transaction or series of transactions deemed to be a liquidation of the company; approve any merger, sale of assets or other corporate reorganization or acquisition; approve the voluntary liquidation or dissolution of the Company; 12

Voting for directors:

Protective provisions:

increase the size of the board; encumber or grant a security interest in all or substantially all of the assets of the Company in connection with an indebtedness of the Company; declare or pay any dividend or distribution or approve any repurchase with respect to the preferred stock (except as otherwise provided in the articles of incorporation) or the common stock (subject to customary exceptions); or increase the number of shares authorized for issuance under any existing stock or option plan or create any new stock or option plan.

INVESTOR RIGHTS Registration rights: Registrable securities. The common stock issued or issuable upon conversion of the preferred stock will be Registrable Securities. Demand registration. Subject to customary exceptions, holders of at least 50% of the Registrable Securities will be entitled to demand that the Company effect up to three firmly underwritten registrations (provided that each such registration has an offering price of at least $5.00 per share and has aggregate proceeds of at least $10,000,000) at any time following the earlier of (i) three years following the closing of the financing and (ii) 365 days following the Companys initial public offering. The Company will have the right to delay such registration under certain circumstances for up to four periods of up to 180 days each in any twelve month period. Piggyback registration. The holders of Registrable Securities will be entitled to piggyback registration rights on any registered offering by the Company on its own behalf or on behalf of selling stockholders, subject to customary exceptions. In an underwritten offering, the managing underwriters will have the right, in the event of marketing limitations, to limit the number of Registrable Securities included in the offering, provided that, in an offering other than the initial public offering, the Registrable Securities may not be limited to less than 15% of the total offering. In the event of such marketing limitations, each holder of Registrable Securities will have the right to include shares on a pro rata basis as among all such holders and to include shares in preference to any other holders of common stock. S-3 rights. Subject to customary exceptions, holders of Registrable Securities will be entitled to demand registrations on Form S-3 (if available to the Company) so long as the offering is for common stock having an aggregate offering price of not less than $5,000,000. The Company will not be required to file more than two such Form S-3 registration statements in any twelve month period. 13

The Company may defer an S-3 filing four times during any twelve month period for up to 180 days. Expenses. Subject to customary exceptions, the Company will bear the registration expenses (exclusive of underwriting discounts and commissions) of all demand, piggyback and S-3 registrations, provided that the Company will not be required to pay the fees of more than one counsel to all holders of Registrable Securities. Termination. The registration rights of a holder of Registrable Securities will terminate on the earlier of (i) such date, on or after the Companys initial public offering, on which such holder may immediately sell all shares of its Registrable Securities under Rule 144 during any three-month period and (ii) two years after the initial public offering. Transfer. Registration rights may be transferred by a holder of Registrable Securities to current and former partners and members, and affiliates of that holder and to other persons acquiring at least 500,000 shares of the Companys outstanding capital stock, provided the Company is given written notice. Market stand-off. Holders of Registrable Securities will agree not to effect any transactions with respect to any of the Companys securities within 365 days following the initial public offering by the Company, provided that all officers and directors of the Company and all holders of at least 1% of the Companys voting securities are similarly bound. Other provisions. The Investor Rights Agreement will contain such other provisions with respect to registration rights as are customary, including with respect to indemnification, underwriting arrangements and restrictions on the grant of future registration rights. Right to maintain proportionate ownership: Each holder of Series A Preferred will have a right to purchase its pro rata share of up to 5% of any offering of new securities by the Company, subject to customary exceptions. The pro rata share will be based on the ratio of (x) the number of shares of Series A Preferred held by such holder (on an as-converted basis) to (y) the Companys outstanding securities (on an as-converted and as-exercised basis). Participating holders will have the right to purchase, on a pro rata basis, any shares as to which eligible holders do not exercise their rights. This right will terminate immediately prior to the Companys initial public offering. In the event Ryan Friedlinghaus proposes to transfer any common stock or other securities convertible into or exercisable for common stock, the Company will have a right of first refusal to purchase any or all the shares on the same terms as the proposed transfer.

Right of first refusal:

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If the Company does not exercise its right of first refusal, holders of at least 1,000,000 shares of Series A Preferred will have a right of first refusal (on a pro rata basis based on the total shares of Series A Preferred then outstanding) with respect to the proposed transfer. Rights to purchase any unsubscribed shares will be reallocated pro rata among the other eligible holders of Series A Preferred. The rights of first refusal will be subject to customary exceptions and will terminate on an initial public offering. Voting agreement: The principal stockholders of the Company will agree to elect to the board: Two Series A designees as the Series A directors. The first Series A designee will be chosen by investors holding at least 66 2/3% of the Series A Preferred held by all investors. The second Series A designee will be chosen by investors holding at least 66 2/3% of the Series A Preferred held by all investors. The Series A designees will initially be TBA and TBA. Three common stock designees as the common stock directors. The first common stock designee will be chosen by Ryan Friedlinghaus. The second common stock designee will be chosen by founders holding at least 66 2/3% of the common stock held by all founders. The third common stock designee will be chosen by founders holding at least 66 2/3% of the common stock held by all founders. One of the common stock designees will be the Companys CEO. The common stock designees will initially be TBA, TBA and TBA. Five mutual designees, as approved by (i) founders holding a majority of the common stock held by all founders and (ii) investors holding a majority of the shares held by all investors. The mutual designees will initially be TBA, TBA, TBA, TBA and TBA.

Director liability:

The directors will be entitled to customary indemnification from the Company and reimbursement of reasonable costs of attendance at board meetings. The Company will also obtain D&O insurance reasonably satisfactory to the Company and its directors. The Company will deliver to each holder of at least 1,000,000 shares of Series A Preferred: unaudited annual financial statements within 120 days following year-end; unaudited quarterly financial statements within 60 days following quarter-end; and annual operating plans 45 days before each fiscal year. 15

Information rights:

The information rights will terminate upon an initial public offering. EMPLOYEE MATTERS Proprietary information agreements: Key person life insurance: The Company will have all employees and consultants enter into proprietary information and inventions agreements. The Company will obtain a key person life insurance policy on Ryan Friedlinghaus in the amount of $4,000,000, with proceeds payable to the Company.

OTHER MATTERS Purchase agreement: The investment will be made pursuant to a stock purchase agreement which will contain, among other things, appropriate representations and warranties of the Company and the investors and appropriate conditions of closing. The Company and the investors will each indemnify the other for any finders fees for which they are respectively responsible. The Company will pay the reasonable fees and expenses of a single counsel to the investors, up to a maximum of $25,000, if the financing closes. Until the initial closing of the financing contemplated by this Memorandum of Terms, the existence and terms of this Memorandum of Terms and the fact that negotiations may be ongoing with the investors shall not be disclosed to any third party without the consent of the Company and the lead investor(s), except as may be (i) reasonably required to consummate the transactions contemplated hereby (provided that any persons receiving the information agree to the confidentiality restrictions contained herein or are otherwise subject to confidentiality obligations) or (ii) required by law. The investment will be subject to customary conditions, including but not limited to: completion of due diligence to the satisfaction of the investors; negotiation and execution of definitive agreements customary in transactions of this nature; receipt of all required authorizations, approvals and consents; delivery of customary closing certificates and an opinion of counsel for the Company; and the absence of material adverse changes with respect to the Company. 16

Finders: Legal fees and expenses:

Confidentiality:

Conditions precedent:

(Signature page follows)

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This Memorandum of Terms may be executed in counterparts, which together will constitute one document. Facsimile signatures shall have the same legal effect as original signatures. The legally binding portions of this Memorandum of Terms will be governed by California law, without regard to conflicts-of-law principles. WEST COAST CUSTOMS PARTNERS, LLC

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Exhibit A Performance Milestones TBD