EXCLUSIVE BROKER AND MARKETING AGREEMENT
THIS EXCLUSIVE BROKER AND MARKETING AGREEMENT is made and entered into effective
as of March 5, 1996 (the "Effective Date") by and between ZAP Power Systems
Corporation, a California corporation (herein referred to either as "ZAP" or
"Manufacturer") located at 000 Xxxxxx Xx., Xxxxxxxxxx, XX 00000 and Power Biking
INC., a California Corporation (herein referred to either as "PBI" or "Broker")
located at 0000 Xx Xxxxxxx Xxxxxxx, Xxxx X, Xxxxxx, Xx. 00000 (collectively, the
"Parties").
RECITALS
A. ZAP has invented, developed and manufactured certain electric vehicles and
components (defined below as "Assembled Products") thereof which it desires to
sell and distribute in certain territories with the assistance of Broker.
B. Broker desires to obtain distributors and/or customers for ZAP's products in
certain territories on an exclusive and non-exclusive basis as more fully set
forth below.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and conditions herein
contained, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and intending to be legally bound hereby, the
Parties hereto mutually agree as follows:
1. Definitions When used herein, the additional definitions set forth herein
below shall have the following meanings:
A. Affiliates of a Party hereto shall mean (i) each person or entity that,
directly or indirectly, owns or controls, whether beneficially or as a
trustee, guardian or other fiduciary, five percent (5%) or more of (A) the
profits or losses of any person or (B) the securities having ordinary voting
power in the election of directors or other governing body, or (c) the voting
power of any person or entity or other ownership interests of any such Party,
(ii) each person or entity that controls, is controlled by or is under common
control with such Party or any Affiliate of such Party or (iii) each of such
Party's officers, directors, or general partners or similarly
positioned-individuals. For the purpose of this definition, "control" shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of its management or policies, whether through the ownership of
voting securities or by contract or otherwise.
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B. Aftermarket Accessories shall mean and include (i) any physical
nonstandard item that can be added to an "Assembled Product" (as defined
below) and/or (ii) any general item of merchandise for use in connection with
an Assembled Product (such as clothes, banners, etc.), sometimes distributed,
sold, or otherwise commercialized directly or indirectly by or for ZAP or any
of its Affiliates during the Term of this Agreement.
C. Aftermarket Options shall mean any and all contractual rights sold by PBI
or ZAP to protect or insure a ZAP product including, but not limited to
extended warranties, service contracts, maintenance contracts, theft
insurance, and tire puncture insurance.
D. Assembled Products shall mean the battery and/or solar powered electric
motor driven vehicle(s) described in Exhibit A hereto (which Exhibit is
incorporated herein by this reference) manufactured, distributed, sold or
otherwise commercialized directly or on behalf of ZAP or any of its
affiliates during the term of this Agreement. If and when ZAP expands its
line of vehicles (i.e. electric automobiles) then, it agrees to enter good
faith negotiations with PBI to enter into an agreement to extend this
agreement to said new vehicles.
E. Components shall mean any and all engines, controllers, transmissions
drive-trains or any other separate parts or components that are a necessary
and integrated part of an Assembled Product, and is also provided,
manufactured, distributed, sold or otherwise commercialized directly or
indirectly by Manufacturer or any of its Affiliates during the Term of this
Agreement.
F. Dollars or "$" shall mean currency of the United States of America.
G. PBI Enrolled Dealer shall mean any "New Automobile Franchised Dealership"
(i.e. a dealer for General Motors, etc.) that is enrolled by PBI that
continues to be a Party in good standing under their Dealer/Manufacturer
Sales and Service Agreement (herein called "Dealer Agreement").
H. Exclusive Territories shall mean the geographic area constituting the
following geographic regions, to wit: The 50 states of the United States of
America including all of its possessions and Territories and Canada.
I. Products shall mean and collectively refer to any one or more of the
following: Aftermarket Accessories, Assembled Products and/or Components.
(Note, AFTERMARKET OPTIONS are not PRODUCTS)
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2. Appointment/Products/Territory/Term
X. Xxxxx of Exclusive Broker Appointment: Manufacturer hereby appoints PBI
the exclusive right and appoints PBI on an exclusive basis as its exclusive
broker within the Exclusive Territory to market, advertise, merchandise,
promote and commercialize the Products and any of them to and through PBI
Enrolled Dealers during the Term of this Agreement. PBI Enrolled Dealers
shall contract directly with ZAP pursuant to the Dealer Agreement. Once the
standard form of Dealer Agreement is completed (which must be completed at
the earliest possible date as PBI needs this document to enroll PBI Enrolled
Dealers) it will be attached hereto as Exhibit B and incorporated herein by
this reference ("Dealer Agreement"). PBI will cause its best effort
(contingent upon Zap's product availability and production capacity) to
locate and present to ZAP New Automobile Franchised Dealerships (defined in
subsection 1G hereof) for consideration and enrollment by ZAP as a PBI
Enrolled Dealer for ZAP and to exploit and fully develop the market.
B. Special Customer Agreements at ZAP's Discretion PBI is expected to
concentrate its efforts on the establishment of a distribution network
consisting primarily of New Automobile Franchise Dealers as PBI Enrolled
Dealers. However, its is contemplated that from time to time PBI may
encounter a potential candidate for a PBI Enrolled Dealer or identify a group
of customers for ZAP Products that do not qualify for inclusion in PBI's
network of PBI Enrolled Dealers. In all such circumstances, PBI is required
to disclose the opportunity to ZAP. Where appropriate, ZAP (in its sole
discretion) may engage PBI to participate in the development of a dealership
or customer relationship with the prospect. Each time PBI is engaged to
participate in a special situation, the Parties will complete a Special
Customer Contract to set forth PBI's rights, duties, compensation
arrangement, and other matters relating to the special situation. Each such
Special Customer Contract will be separate and distinct from this Agreement.
C. Non-Exclusive Purchasers (NEP) means a retail customer in the Exclusive
Territory that PBI introduces to ZAP that ZAP accepts in its sole discretion
as a NEP for PBI's benefit because the contemplated sale does not conflict
with ZAP's other dealers or distribution objectives. In such an event, ZAP
agrees to sell Assembled Products to NEP's on terms and conditions no less
favorable than those given to similar type customers under reasonably similar
circumstances. PBI's rights with respect to NEP's shall be nonexclusive.
D. Term The Term of this Agreement shall begin on the Effective Date and ends
on May 31, 1998, unless extended by written agreement of the parties or
sooner terminated pursuant to Section 13 hereof.
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3. Aftermarket Options Exclusivity: For the Term of this Agreement ZAP shall
not sell any Aftermarket Option to PBI Enrolled Dealers and/or selected NEPs or
selected Special Customers for whom PBI has been granted an exclusive to
Aftermarket Options.
4. PBI COMPENSATION For the Term of this Agreement PBI will be compensated for
Product sales made by PBI Enrolled Dealers, Special Customers and NEPs as
follows:
A. For all brokered sales (i.e. all purchase orders presented to ZAP through
PBI) between the Effective Date and February 28, 1997, PBI will be paid the
lesser of: (1) 18% of the Dealer Price charged by ZAP for sales of All
Products or, (2) $.125 per Powerbike type Product; $55 per Powerkit type
Product.
B. For all brokered sales (i.e., all purchase orders presented to ZAP through
PBI) after February 28, 1997 and the termination date of this Agreement, PBI
will be paid the lesser of: (1) 15% of the Dealer Price charged by ZAP for
sales of all Products, or (2) $100 per Powerbike type Product and $50 per
Powerkit type Product.
C. For sales brokered to NEP's and Special Customers, PBI will be paid a 20%
brokerage fee if the Sales Price paid by the NEP or the Special Customer is
90% or more of Manufacturers' Suggested Retail Price for said Product. The
brokerage fee due to PBI with respect to all other sales to a NEP or a
Special Customer shall be negotiated and set forth in the appropriate
agreement pertaining to the NEP or the Special Customer.
D. Contingent Override Brokerage Fee: If but only if PBI satisfies in full
the Incremental Unit Sales Quotas set forth in subsection 5B(5) hereof
(without involving any need to cure any shortfall, and subject to only the
exception set forth in subsection 4D(4) hereof), then PBI shall have earned
the Override Brokerage Fee that shall be computed at a rate of 3% on sales in
PBI's territory as prescribed in this subsection 4(D). The Override Brokerage
Fee sales shall accrue and be paid as follows:
1. Commencing on March 1, 1997, ZAP will compute, the Override Brokerage
Fee at a rate of 3% on all of ZAP's sales revenues for Assembled Products,
Components, Aftermarket Accessories and Aftermarket Options in the
Exclusive Territory that are not generated by "PBI Brokerage Activities
Under This Agreement", which term is defined herein to mean;
"Brokered sales of all Assembled Products, Components and Aftermarket
Accessories and
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Aftermarket Options" for which PBI is being paid Brokerage Fees under
subsection 4A, B, C and D hereof."
If PBI terminates its role as Broker before June 1, 1998 or PBI's current
shareholders (i.e. Xxxxx Xxxxxxxx and Xxx Xxxxxxx) spend less than a
majority of their business efforts marketing ZAP's Products then no
Override Brokerage Fees will be due.
2. The Override Brokerage Fee computed for each month (in which ZAP has
received payment) will be paid thirty (30) days after the last day of each
said month (i.e., a payment received in June by ZAP in 1997 will be paid
not later than July 31, 1997).
3. Payments made pursuant to this subsection 4D and 4D(1) shall be made
from March 1, 1997 to and until May 31, 1998 and continued as outlined in
section 13b(2).
4. PBI shall not fail to earn the Override Brokerage Fees hereunder if
PBI's inability to meet the Incremental Unit Sales Quota(s) hereunder is
caused by ZAP's failure to deliver Product to the customers of the PBI
Enrolled Dealers, NEPs, and/or Special Customers. In such an event, PBI
shall be entitled to and shall be paid the Override Brokerage Fees. ZAP's
manufacturing process time for most Products is eight (8) weeks. PBI's
orders will account for this lead time.
5. Quotas: PBI agrees to meet or exceed the "Performance Quotas" set forth
below.
A. Cumulative PBI Enrolled Dealers Quota: On April 30, 1997, PBI shall have
Zap Dealer Agreements submitted for at least for thirty (30) PBI Enrolled
Dealers.
B. Incremental Unit Sales Quota: PBI shall meet the following Brokered "Unit
Sales" quotas for any combination of Assembled Products (a unit includes of
the following, a Powerbike, a Powerbike, a Zappy, or a ZAP Powerkit) as
follows:
1. 30 unit sales by March 5, '96.
2. 75 unit sales in the month of March '96.
3. 75 unit sales in the month of April '96.
4. 100 unit sales in the month of May '96.
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5. 3,000 unit sales by April 30, 1997 (includes 280 units required in
first four months, February '96 to May '96).
6. 10,000 unit sales by May 31, 1998 (includes 3.000 unit sales required
as of April 30, 1997).
C. Escrow and Payments: Manufacturer will establish and maintain an escrow
account (or equivalent) for the collection of sales proceeds immediately. All
payments for Products brokered by PBI hereunder for which Broker is entitled
to a fee shall be paid in U.S. Dollars to a ZAP escrow account in which PBI
shall have a right for disbursement by an escrow agent as outlined in the
escrow Agreement attached as Exhibit C. (to be completed immediately). The
Dealer Agreement shall provide that Purchaser shall make payments payable to
the foregoing Escrow Account (the "Escrow Account"). Amounts hereunder shall
be considered to be paid as of the day on which funds are received in the
Escrow Account. The name on this Escrow Account will be ZAP Powerbikes
Enterprise.
6. PBI Duties:
A. PBI will use its best effort to cause the establishment of a PBI Enrolled
Dealer Network for ZAP in the Exclusive Territory.
B. PBI shall promptly refer to the Manufacturer any correspondence or
inquiries of any kind that it may receive from purchasers or potential
subdistributors, dealerships or sales representatives located anywhere inside
or outside the Exclusive Territory except New Automobile Franchise Dealer(s)
and NEP's inside the Exclusive Territory.
C. PBI agrees to conduct its business in a manner that will reflect favorably
upon the good name and reputation of the Products and on Manufacturer.
D. PBI agrees to conduct its business in a responsible manner that will
positively support ZAP's activities hereunder, including its marketing and
advertising efforts.
E. PBI will disclose to ZAP any willful infringement of ZAP's patent or
trademark rights by third Parties which PBI has actual knowledge.
7. Manufacturer Duties
A. Manufacturer agrees to conduct its business in a responsible manner that
will support positively PBI activities hereunder. In this regard,
Manufacture's will exercise diligence in all areas of its business including
among others:
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B. Manufacturer will diligently work to carrying on a continuous effort to
improve its Products with innovations that will make Products costs
competitive, of first class quality, and preferred technology. Manufacturer
will give PBI at least 30 days advanced written notice of any new Products or
Product changes. In this regard, Manufacturer will use its best efforts to
introduce what is commonly known as its "ZAPPY" as its first new Product not
later than December 31, 1996.
C. Manufacturer will cooperate with Brokers creations and production of
training manuals, videos, and such other materials Sales Agents deems
necessary for use by PBI Enrolled Dealers.
D. Manufacturer will establish and maintain an Escrow Account (or equivalent)
for the collection of sales proceeds to be allocated and dispersed to
Manufacturer and PBI under the Escrow Agreement pursuant to the terms of
subsection 5C hereof.
E. Manufacturer will undertake such reasonable legal enforcement and
protection of Manufacturers patent and trademark rights as Manufacturer deems
appropriate.
F. Manufacturer will grant all PBI Enrolled Dealers first call rights to
receive delivery of all Products for which they have provided Manufacturer a
purchase order at least sixty (60) calendar days before the delivery date.
G. Manufacturer will provide all PBI's Special Customers and NEP's
fulfillment of their sales orders on a consistent, FIFO basis.
H. Manufacturer will, at Manufacturer's discretion, obtain and maintain
"Brand Names" for its Products.
I. Manufacturer will indemnify PBI from any loss arising from Manufacturers
failure to deliver Products in a timely fashion.
J. ZAP shall not install any Dealers in any of PBI's "Protected" Dealer areas
if the "Protected" Dealer is meeting its quotas.
8. Advertising duties of PBI and MANUFACTURER'S support thereof
A. Manufacturer shall furnish to PBI (free of charge), at PBI's address of
record reproduction-ready transparencies of ZAP created drawings,
specifications and other technical information (including service manuals and
warranty booklets) for the Products requested by PBI for marketing production
by PBI at its sole expense. PBI (at its expense) is hereby authorized to
reproduce the same in the literature and material it produces and make
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needed and accurate translations thereof as may be appropriate in the
Exclusive Territories. In this regard, Manufacturer will provide PBI accurate
and legally correct information for use in PBI's marketing efforts. PBI is
required to obtain approval from Manufacturer of all of the literature and
any other advertising material prior to its publication by PBI to third
Parties.
B. From time to time the Manufacturer may agree to engage in co-op
advertising with Authorized Dealers as recommended by Broker. Manufacturer
reserves its right to decide the extent of its participation in co-op
advertising based on a review of PBI's proposal.
C. PBI is to pay for all of its marketing and advertising costs and overhead.
D. Manufacturer is responsible to provide all technical, installation, and
service related information necessary for Authorized Dealers to provide
competent service to its purchasers.
E. Manufacturer is to provide Authorized Dealers on video/audio tape(s) for
the "installation and service" of the Products.
F. ZAP will provide Authorized Dealers an 800 number for technical assistance
during all normal business hours in the United States.
G. ZAP will pay PBI $1,000 by March 15, 1996 for the photography cost for ZAP
bikes. ZAP will gain access to the negatives for reproduction.
9. Relationship of the Parties The Parties agree that PBI is only a broker to
ZAP and that their relationship to not be that of employer or that of an
employee, a partnership, or a joint venture of any kind. Manufacturer shall not
make any statement or otherwise represent Broker as having any relationship with
Manufacturer which is based on an alleged relationship other than that described
herein.
10. Trademark/Patents/Proprietary Information/Competition.
A. Manufacturer grants to PBI for the term of this Agreement a non-exclusive
right and license to use all of ZAP's Trademarks that pertain to the Products
covered by this Agreement, including but not limited to the trademark ZAP/ZAP
Power Systems and Electricycle Products in connection with the advertising,
merchandising, promotion and commercialization of the Products in the
Exclusive Territories. Upon the termination of this Agreement, PBI's rights
and license hereunder shall automatically and immediately cease and
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as of termination, PBI will refrain thereafter all references to ZAP and ZAP
related Products.
B. Wherever practical Manufacturer will seek patent protection of it's
proprietary Products under the laws of the United States and Canada and
elsewhere. If and when patents are issued Manufacturer will seek to further
protect it's Products with additions to the patents and new patents for new
innovations that will protect Manufacturer's markets from competition. Also,
Manufacturer will use all reasonable efforts (as Manufacturer deems in its
sole discretion) to seek enforcement and legal protection of it's patents
from infringements by competitors and others.
C. Manufacturer will use it's best efforts to keep it's proprietary
information secret. In this regard PBI agrees to sign a Non-competition and
Confidentiality Agreement in form and substance acceptable to both Parties.
Manufacturers and PBI shall comply with all laws, statutes, rule and
regulations applicable to its business and the marketing of the Products.
11. Indemnification in Favor of Manufacturer
A. PBI shall indemnify, defend, protect and hold harmless Manufacturer, its
Affiliates and all officers, directors, employees and agents thereof
(hereinafter referred to as "Indemnifies") harmless from all claims, suits,
damages, losses, expenses, costs, obligations, liabilities, recoveries and
deficiencies, (including without limitation, interest, penalties, damages or
injury to property or person and incidental and consequential damages, as
well as reasonable attorneys' fees, costs of defense and expert witness fees
incurred in connection therewith) which may be asserted against or suffered
by any Manufacturer indemnities which arise or result from any violation by
PBI of any law, statute, rule regulation or any inaccurate advertising claim
made by PBI without Manufacturers approval, or any breach of this Agreement
by PBI.
B. For the term of this Agreement, PBI shall carry reasonable errors and
omissions insurance (which may be paid for by PBI as an "additional" insured
to ZAP's other insurance's if doing so is less expensive and causes no
disadvantage to ZAP) in form and amount which are customary in the industry
for the activities performed by PBI hereunder. PBI shall name Manufacturer as
an additional insured of said policies if customary and reasonably available.
A Certificate of Insurance shall be provide to Manufacturer for the Term of
this Agreement evidencing such coverage in the Exclusive Territory. Said
policies shall require that insurer(s) may not terminate or materially modify
insurance without prior notice to Manufacturer at least twenty (20) days in
advance of termination or modification. Manufacturer shall have the right to
review and approve said policies.
12. Indemnification in favor of PB
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A. Manufacturer shall indemnify, defend, protect and hold harmless PBI, its
Affiliates and all officers, directors, employees and agents thereof
(hereinafter referred to as "PBI's Indemnities") harmless from all claims,
suits, damages, losses, expenses, costs, obligations, liabilities,
recoveries, and deficiencies, (including without limitation, interest,
penalties, damage or injury to property or person and incidental and
consequential damages as well as attorneys' fees, costs or defense, and
expert witness fees incurred in connection therewith) which may be asserted
against or suffered by any PBI Indemnity which arise or result from any
product liability claims or any violation by ZAP of any law, statute, rule,
regulation, or any breach of this Agreement.
B. ZAP shall defend, indemnify, and hold all PBI Indemnities harmless as
provided above for all advertising claims made by PBI which have been
approved by ZAP in advance.
C. Manufacturer agrees that it shall not carry less than one million dollars
of "occurance" product liability insurance and casualty insurance for the
term of this agreement. Manufacturer shall name PBI (said policy shall name)
PBI's officers and its affiliates and Xxxxx Xxxxxxxx and Xxx Xxxxxxx as
individuals as additional insured on said policies. ZAP agrees to increase
this product liability insurance to prudent higher limits as soon as
financially reasonable. ZAP agrees a certificate of insurance shall be
provided to PBI for such insurance policies. Said policies shall require that
insurer may not terminate or materially modify such insurance without prior
notice to PBI at least twenty (20) days in advance of termination or
modification. PBI shall have the right to review and approve said policies.
13. Term of Agreement/Renewal/Overide Commissions/Buy Out Formulas
A. The Term of this Agreement shall become effective on the Effective Date
and shall terminate on May 31, 1998, unless extended by written agreement of
the parties or sooner terminated pursuant to the terms of this Section 13.
B. Either party may terminate this Agreement (with or without cause) by
giving the other party at least sixty (60) days advance written notice to
terminate.
1. If Zap terminates the agreement before May 31, 1998 then it will owe
PBI a "Buyout Amount" equal to either, (a) if the Override Brokerage Fee
has been earned by PBI, then their Buyout Amount shall be $4,000,000 less
the Override Brokerage Fee paid to PBI through the termination date or (b)
if the Override Brokerage Fee has not been earned by PBI, then the Buyout
Amount shall be $4,000,000 less the "Buyout Reduction Amount" derived
herein below, as follows:
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Unit and dealer quotas will be weighted based on their relative importance
to Zap. The weights are 80% for unit sales and 20% for dealers.
FIRST, The Total Weighted Quota for subsection 13B(1) (b) is 2,406 and was
derived as follows: (3,000 unit sales quota times 80%) plus (30 dealer
contracts submitted times 20%). For subsection 13B(2) it is 8,006 because
the 10,000 unit sales required on May 31, 1998 is used.
SECOND, The Weighted Actual Results for unit sales and dealer contracts
submitted to Zap by PBI would be determined. For subsection 13B(1)(b) the
Quota performance measurement period ends May 31, 1997. For subsection
13B(2) the Quota performance measurement period ends on May 31, 1998.
THIRD, the reduction formula should be applied for subsection 13B(1) the
Buyout Reduction Amount is derived as follows:
"(1(representing 100%) minus (The weighted actual results divided by The
Total weighted quota)) times $4,000,000".
For subsection 13B(2), the reduction percentage is derived under the
formula above by replacing the $4,000,000 with the 10% called for in that
provision.
Example for 13B(1)(b):
Actual results Unit sales 2,000
Dealer contracts 25
The Weighted Actual Results
(2,000 times 80%)+(25 times 20%) equals 1,605
The Buyout Reduction Amount is $1,340,000 derived as follows:
1,605 divided by 2,406 equals 0.665
1 minus 0.665 equals 0.335
$4,000,000 times 0.335 equals $1,340,000
Therefore, the Buyout Amount under subsection 13B(1)(b) would be
$2,660,000 ($4,000,000 less $1,340,000).
2. If the parties do not elect to extend the Term of this Agreement beyond
the expiration date of May 31, 1998 (the Term), then, for the period June
1, 1998 to and including May 31, 2001, in addition
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to paying an Override Brokerage Fees of 3% herein described in Section 4D
and 4D(1), as further consideration of the value of the PBI Enrolled
Dealer network then in place, PBI will also be paid a Dealer Network
Buyout Amount computed at a rate of 10% of the Sales revenues to customers
of the then PBI Enrolled Dealers (provided, however, that said 10% shall
be reduced by applying the reduction formula in subsection 13B(1)(b)
hereof, with 10% being substituted for the $4,000,000 and the 10,000 Unit
Sales required by May 31, 1998, substituted for the 3,000 Unit Sales
required by May 31, 1997. Notwithstanding anything in this provision to
the contrary, if the parties elect to extend this agreement beyond the
expiration date of May 31, 1998, then, this provision will be of no force
or effect and no Dealer Network Buyout Amount will be due to PBI
hereunder.
C. At any time, either party may terminate this Agreement upon written notice
to the other Party within thirty (30) days after the occurrence of any of the
events set forth below is true with respect to the Noticed Party, to wit:
1. Makes an assignment for the benefits of its creditors;
2. Has a receiver appointed for all or any substantial portion of its
business or assets and such receiver is not dismissed within 90 days
thereafter,
3. Files or has filed against it, any petition under any bankruptcy or
insolvency law, and, if such filing is involuntary, is not dismissed
within 90 days thereafter,
4. is dissolved or liquidated without a successor in interest assuming all
obligations hereunder.
5. PBI sells in excess of 40% of its capital stock in any transaction or
series of related transactions, merges or is acquired by another entity or
sells all, or substantially all of its assets ("Change in Control"),
whereby the Party in control thereafter is a competing manufacturer or
markets products substantially similar to the Products. In any event of a
change of control, PBI shall provide notice to ZAP of the identity of the
new owner(s).
14. Effect of Termination or Expiration
Termination or expiration of this Agreement shall not relieve PBI or
Manufacturer of any obligations or responsibilities it incurs prior to the
termination or expiration of this Agreement.
15. Dispute Resolution
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A. Any disputes between the Parties that arise out of this Agreement shall be
submitted to final and binding arbitration in the City of Santa Xxxx, County
of Sonoma, State of California, under the Arbitration Rules of the American
Arbitration Association then in effect, upon written notification and demand
of any Party hereto. If any Party demands such arbitration, the American
Arbitration Association shall be requested to submit a list of prospective
arbitrators consisting of persons experienced in matters involving commercial
contracts. The provisions of California's Code of Civil Procedure Section
1283.05 and the laws of the State of California are incorporated herein and
shall be applicable to the arbitration. In making the award, the arbitrator
shall award to the prevailing Party. Any award may be entered as a judgment
in any court of competent jurisdiction in Santa Rosa, California. Should
judicial proceedings be commenced to enforce or carry out this provision or
any arbitration award, the prevailing Party in such proceedings shall be
entitled to reasonable attorneys' fees and costs in addition to other relief.
Any Party shall have the right, prior to receiving an arbitration award, to
obtain preliminary relief from a court of competent jurisdiction to: (i)
avoid injury or prejudice to that Party; or (ii) to protect the rights of any
Party; or (iii) to maintain the status quo as it existed immediately prior to
the dispute; or (iv) to obtain possession or property in order to avoid a
material risk of damage to or loss of that property.
16. Miscellaneous
A. Applicable law This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts
between California residents entered into and to be performed entirely within
the State of California.
B. Headings. The headings used herein and in the Exhibits attached hereto are
descriptive only and for the convenience of identifying provisions, and are
not determinative of the meaning or any such provisions.
C. Entire Agreement This Agreement and the documents attached hereto as
Exhibits constitute the entire Agreement and understanding between the
Parties with respect to the subject matter herein and therein, and supersede
and replace any and all prior Agreements and understandings. whether oral or
written with respect to such matters. The provisions of this Agreement may be
waived, altered, amended or replaced in whole or in part only upon the
written consent of all Parties to this Agreement.
D. Severability If for any reason any provision of this Agreement shall be
determined to be invalid or inoperative, the validity and effect of the other
provisions herein shall not be affected thereby, provided that no such
severability shall be effective if it causes a material detriment to any
Party.
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E. Successors and Assigns Subject to any provisions herein with regard to
assignment, all covenants and Agreements herein shall bind and insure to the
benefit of the respective heirs, executors, administrators, successors and
assigns of the Parties hereto.
F. Venue Any action proceeding arising directly or indirectly from this
Agreement shall be litigated or arbitrated, as the case may be, in an
appropriate state or federal court in the County of Sonoma, State of
California.
G. Counterparts This Agreement may be executed in any number of counterparts,
each of which may be executed by less than all of the Parties to this
Agreement of which shall be enforceable against the Parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
H. No Implied Waivers The failure of either Party at any time to require
performance by the other Party of any provision hereof shall not affect in
any way the right to require such performance at any time thereafter, nor
shall the waiver by either Party of a breach of any provision hereof be taken
or held to be a waiver of any subsequent breach of the same provision or any
other provision.
I. Days Whenever the term "day" is used herein, unless otherwise stated, it
refers to calendar days.
J. Notices All notices, requests, demands, instructions or other
communications required or permitted to be given under this Agreement shall
be in writing and shall be deemed to have been duly given upon delivery. If
delivered personally or by one-day courier, or by facsimile transmission
where receipt is acknowledged by the receiving machine or if given by prepaid
telegram, or mailed first-class, postage prepaid, registered or certified
mail, return receipt requested, shall be deemed to have been given 72 hours
after such delivery, to the applicable Party's address set forth on the
signature page as well as any addresses set forth on the signature page
hereto. Either Party hereto may change the address(es) to which such
communications are to be directed by giving written notice to the other Party
hereto of such change in the manner provided above.
K. Signature The Parties shall be entitled to rely upon and enforce a
facsimile of any authorized signatures as if it were the original.
17. Representations and Covenants: Manufacturer and PBI hereby represents and
covenants to the other as follows:
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A. It has full right, power and authority to enter into this Agreement and
there is nothing which would prevent it from performing its obligations under
the terms and conditions imposed on it by this Agreement.
B. This Agreement has been duly authorized by all of its necessary corporate
action and constitutes a valid and binding obligation on it, enforceable in
accordance with the terms thereof.
C. There is no provision in its company or corporate charter, articles or
incorporation, by-laws or the equivalent company or corporate governing
documents and no provision in any existing mortgage, indenture, contract or
Agreement binding on it which would be contravened by the execution, delivery
or performance by it of this Agreement.
D. No consent of any third Party is or shall be required as a condition to
the validity of this Agreement.
E. There is no action or proceeding pending or in so far as it knows or ought
to know threatened against it before any court, administrative agency or
other tribunal which might have a material adverse effect on its business or
condition, financial or otherwise, or its operation of any business which
would not have to be disclosed in Securities and Exchange Commission filings.
F. It covenants and agrees that its representations contained in this
Agreement shall remain true in all respects at all times after the Effective
Date hereof with the same effect as though such representations had been made
on and as of each such subsequent date.
18. Disclosure The Parties agree that the disclosure by PBI of this Agreement
may be required by some or all of the PBI Enrolled Dealers, and that the
disclosure of this Agreement may be appropriate even though it is not required
by such PBI Enrolled Dealers. Any Party hereto may, therefore, disclose all or
any part of this Agreement to third Parties in its own discretion provided,
however, that this Agreement may not be disclosed to any direct competitors of
Manufacturer or PBI.
19. Audit Manufacturer shall keep accurate books of account at its principal
place of business covering all transactions relating to the Agreement. PBI or
its duly authorized representatives shall have the right, at reasonable hours of
the day and upon reasonable notice, to examine such books and all other
documents and material in Manufacturer's "possession or control" with respect to
material accounting matters covered by this Agreement. All books of account and
records of ZAP and its affiliates relating to this Agreement shall be retained
for at least five (5) years after the applicable transaction date or the period
of time as required by the California Franchise Tax Board where applicable to
such records whichever period is longer.
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20. Force Majeure Neither Party hereto shall be liable in damages, or shall be
subject to termination of this Agreement by the other Party, for any delay or
default in performing any obligation hereunder if that delay or default is due
to any cause beyond the reasonable control and without fault or negligence of
that Party; provided that, in order to excuse its delay or default hereunder, a
Party shall notify the other Party of the occurrence or causes, specifying the
nature, particulars and expected duration thereof;, and provided further, that
within ten (10) business days after the termination of such occurrence or cause,
such Party shall give notice to the other Parties specifying the date of
termination thereof. All obligations of the Parties shall return to being in
full force and effect upon the termination of such occurrence or cause
(including, without limitation, any payments that became due and payable
hereunder prior to the termination of such occurrence or cause). For the
purposes of this Section 20, a "cause beyond their reasonable control" of a
Party shall include, without limiting the generality of the phrase, any act of
God act of any government or other authority or statutory undertaking,
industrial dispute, fire, earthquake, explosion, accident, power failure, flood,
riot or war (declared or undeclared).
21. Compliance with Laws. Each Party shall comply with applicable federal, state
and local governmental laws, rules, regulations and ordinances with respect to
performance under this Agreement, including, without limitation, applicable
provisions of the Export Administration Act of 1979, as amended (50 U.S.C.A.
App. 2401 et seq.) and regulations promulgated thereunder, and any other
applicable federal, state or local laws, rules, regulations and ordinances
governing the export and use of commodities and data, and shall cooperate with
each other Party in its compliance with this Section.
22. Biddulph/Biddulph Chevrolet is Separate from PBI Biddulph Chevrolet is a
separate entity from PBI and in no way subject to this clause or any portion of
this Agreement.
In Witness Whereof, the Parties hereto have cause this Agreement to be executed
by their respective duly authorized representative as of the date first above
written.
ZAP POWER SYSTEMS, Inc. POWER BIKING INC.
BY: Xxxxx XxXxxxx 5/6/96 BY: ???? 5/6/96
------------------------ --------------------------
President
000 Xxxxxx Xxxxxx 0000 Xx Xxxxxxx Xxxxxxx
Xxxxxxxxxx, Xx. 00000 Unit D
Wikiup, Ca. 95403
Ph. (000) 000-0000 Ph. (000) 000-0000
Fax (000) 000-0000 Fax (000) 000-0000
23. Supersedes all prior agreements all prior existing agreements between ZAP
and PBI are hereby superceded by this Agreement and shall be of no further force
and effort.
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EXHIBIT A-ASSEMBLED PRODUCTS DESCRIBED
FOR
EXCLUSIVE SALES AGREEMENT
BETWEEN ZAP & PBI DATED MARCH 5, 1996
As of the Effective Date of the Agreement the Assembled Products covered by this
Agreement are as follows.
Bicycles, Tricycles, Skateboards, Zappy, and Powerkits.
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EXHIBIT B-FORM OF DEALER AGREEMENT
FOR EXCLUSIVE SALES AGREEMENT
BETWEEN ZAP & PBI DATED MARCH 5, 1996
FORM OF AGREEMENT TO BE ADDED WHEN COMPLETED
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EXHIBIT C-FORM OF ESCROW AGREEMENT
FOR EXCLUSIVE SALES AGREEMENT
BETWEEN ZAP & PBI DATED MARCH 5, 1996
To be added when completed
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