EXHIBIT 2.6
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EXCLUSIVE PURCHASE, LICENSE AND SUPPLY AGREEMENT
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APRIL 19, 2004
Recitals
Smart Automobile LLC (SA) and ZAP wish to enter into a distribution and
strategic relationship. Whereby SA will provide a license to ZAP to manufacture
compliant cars and will provide fully USA compliant Smart Cars and ZAP will
provide distribution to dealers in the USA.
Compliance
1. SA is a manufacturer of cars with brand name "smart" which meet all U.S.
Environmental Protection Agency (EPA), Department of Transportation (DOT),
/ Federal Motor Vehicle Safety Standards (FMVSS), and California Air
Resources Board (CARB) standards and will provide Smart Vehicles that fully
meet DOT/FMVSS and EPA Federal standards to ZAP. The estimate Time to show
this permits will be between 4-6 weeks upon signing.
2. SA will warrant the vehicles for 12 months/12,000 miles.
3. SA will provide dealer diagnosis computers at cost, currently $10,000.
4. SA will procure and provide parts for ZAP Smart Cars dealers, and provide a
dealer recommended parts list.
5. SA will provide dealer training and service manuals for Smart Cars.
6. SA will finalize all required modification, testing and submit the
application for CARB approval within 8-12 weeks of signing.
Purchasing
1. ZAP will agree to purchase 90 Smart Cars from SA after SA receives all
permits, and provides proof of such permits and a firm delivery schedule to
ZAP, estimated to be by May 15, 2004. SA warrants to sell all the 90 cars
(reserved to Zap) not to an other Party.
2. ZAP agrees to buy 4,000 Smart Cars if available in 2004.
3. ZAP agrees to buy 15,000 Smart Cars if available in 2005.
4. ZAP agrees to continue to buy 15,000 or more cars every year thereafter
unless Mercedes Benz distributes a similar car in the USA.
USA Distribution
1. It is agreed that ZAP will receive exclusive USA distribution and license
rights to manufacture and worldwide non-exclusive rights from SA for 10
years. SA or any affiliated company will not sell any other distributor in
the USA these cars or similar micro cars that achieve 40 mpg or more
efficiency to any other distributor in the USA. ZAP has the right to
sublicense or assign these rights to any party in the USA.
2. It is agreed that ZAP will pay $10,000,000 (ten million dollars) as a
distribution right and license fee to SA. $1,000,000 (one million dollars)
will be paid in cash via check upon signing.
a. SA to deliver five Smart Cars to Santa Xxxx, upon signing. (Only for
demo and not for sale)
b. SA to deliver one Smart Car to Dallas for the auto dealer show in
June. (Only for demo and not for sale)
c. SA to provide ZAP copies of the following as soon as possible:
I. DOT/FMVSS approval letter
II. EPA approval letter
III. MSO
IV. FMVSS sticker
V. EPA sticker
VI. DISTRIBUTOR INVOICE
VII. Window Sticker
3. ZAP agrees to pay as a distribution right and license fee, $1,000 (one
thousand dollars) premium over the regular distribution price for the first
1,000 cars delivered.
4. ZAP agrees to pay $8,000,000 (eight million dollars) in preferred stock to
SA for the distribution rights upon signing. It is understood that this
stock is restricted and non-voting. ZAP agrees that the Preferred stock
will have a value of $8,000,000 (eight million dollars) even if the stock
price decrease from the current price within 18 months. The floor common
share price will be $.91 and equal to $8,000,000 (eight million dollars).
The common stock will have a leak out selling provision in accordance with
SEC laws and limited by 10% of the volume of ZAPZ stock sold in the
previous month. SA will grant a proxy for the stock to Xxxxx Xxxxxxxxx.
5. ZAP agrees to pay for the first 90 cars in advance via wire or L/C, one
week prior to delivery.
6. ZAP agrees to pay for future cars with an Irrevocable Letter of Credit. The
Irrevocable Letter of Credit is payable at the time of shipping from
Germany, and at time VIN numbers are provided. The delivery will be 6 to 8
weeks after L/C.
7. SA guarantees to ZAP that at least 2,500 Smart Cars will be available in
2004, and 10,000 Smart Cars will be available for purchase to ZAP in 2005.
ZAP and SA are aware of the fact that Mercedes Benz of North America has no
plans to import the city coupe Smart Car in the USA. It is also common
knowledge and anticipated that Mercedes Benz plans to import the 4-door
Smart Car that is produced in Brazil in 2006.
8. SA guarantees that no other entity can provide fully compliant Smart cars
in the USA, during 2004 and 2005. In the event this should occur, SA will
returned the unearned stock if unencumbered or a refund of $1 Million
Dollars to ZAP's option.
9. It is agreed that applicable law with is the State of California.
10. Xxxxxx Xxxxxxxxx personally guarantees the performance of this contract. If
SA cannot meet the terms of this agreement, then the funds and stock will
be returned to ZAP.
11. It is agreed that the parties will sign a more detailed common agreement.
by June 15, 2004.
Public Relations
SA and ZAP will work cooperatively to maximize publicity for the ZAP cars.
AGREED,
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/s/ Xxxxxx Xxxxxxxxx /s/ Xxxxxx Xxxxxxxxx
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Smart-Automobile LLC ZAP
President CEO
Xxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxxx
04/19/04 04/19/04
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