SUBSCRIPTION AGREEMENT
Exhibit
10.1 Subscription Agreement dated June 9, 2009 from The Banks
Group, LLC.
FOR
THIS
SUBSCRIPTION AGREEMENT (“Agreement”) is made and entered into by and between
ZAP, a California corporation ("Company”), and the undersigned subscriber(s)
("Investor") who hereby agrees as set forth below.
1. SUBSCRIPTION. Investor,
intending to be legally bound, hereby subscribes for:
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4,000,000
warrants at $.50
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4,000,000
shares at $.25
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The
shares are common shares, no par value are referred to as the
“Securities.” The share certificate(s) representing the Securities
purchased pursuant to the terms of this Agreement shall be delivered concurrent
with the initial payment as provided for in section “j” hereof.
2. CONDITIONS TO
OFFER. Investor’s subscription is made subject to the
following terms and conditions:
(a) The
Company shall have the right to accept or reject this subscription. If the
Company accepts this Subscription, it will execute and redeliver this Agreement
to Investor.
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(b)
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The
accuracy and continued accuracy of all representations, warranties and
agreements of Investor herein, and in the Investor
Questionnaire.
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3. RECEIPT OF COMPANY
INFORMATION. By executing this Subscription Agreement,
Investor hereby acknowledges receiving and reading a copy of the Company’s
Annual Report on Form 10-KSB for the most recent fiscal year, the Definitive
Proxy Statement for the most recent Annual Meeting of Shareholders, Quarterly
Reports on Form 10-QSB filed during the current fiscal year, Current Reports on
Form 8-K filed subsequent to the most recent Quarterly Report on Form 10-QSB, a
description of the Securities being issued to the Investor, the use of the
proceeds being received by the Investor if the Investor is paying cash for the
Securities, and a description of any material changes in the Company’s affairs
that are not disclosed in the documents furnished (collectively, the “Company
Documents”). Investor understands the special risks in purchasing the
Securities as described in the information provided by the Company, and hereby
acknowledges and agrees that no representations have been made, or if made, will
be relied upon, other than those contained in the documents
furnished.
4. REPRESENTATIONS AND
WARRANTIES. By executing the Subscription Agreement,
Investor represents and warrants to the Company that:
(a)
The Securities are being acquired for Investor’s own account, for investment
purposes only, and not with a view to, or for resale in connection with, any
distribution or public
offering
thereof within the meaning of the Securities Act of 1933, as amended (“Act”), or
the securities laws of any state.
(b)
Investor understands that the Securities have not been registered under the Act
by reason of issuance in a transaction exempt from the registration requirements
of the Act and that the Securities may not be sold, offered for sale,
transferred, pledged, hypothecated or otherwise disposed of except in compliance
with the Act, that the Company has no intention of registering the Securities
for resale. Investor understands the legal consequences of the foregoing to mean
that the Securities and the economic risk of its investment in the Securities
must be held by Investor for an indefinite period of time. Investor
cannot transfer the Securities until the later of (1) 6 months from
the date the purchase contemplated by this Agreement is consummated, and (2)
expiration of the restrictions of Rule 144 of the Securities Act of 1933, as
amended. Investor further understands that the Securities have not
been registered under any state law by reason of their issuance in a transaction
exempt from the registration requirements of state law, and that no federal or
state agency has made any finding or determination as to the fairness of an
investment in, or any recommendation or endorsement of, the
Securities.
(c)
Investor understands that the Securities are “restricted securities” within the
meaning of Rule 144 and that a legend restricting sales or transfers will appear
on any certificates issued to represent such Securities. Investor
bears the burden to establish the availability of any exemption under Rule 144,
or otherwise, for any transfer which the Investor intends to
make. Any transferor may be required to furnish an opinion of counsel
satisfactory to the Company that the proposed transfer complies with applicable
federal and state securities laws.
(d) Investor
and its advisors have been provided with information concerning the Company,
including, without limitation, the Company Documents, and have read the Company
Documents and have been afforded an opportunity to ask such questions of the
Company’s officers and representatives concerning the Company’s property,
business, operations, financial condition, assets, liabilities and other
relevant matters as they have deemed necessary or desirable, and have been given
all such information as has been requested, in order to evaluate the merits and
risks of the prospective investment contemplated herein. Investor and
its advisors have been provided with full and free access and opportunity to
inspect, review, examine, and inquire about all books, records, and information,
including financial information, of the Company, its business and affairs and
have made such inspection, review, examination, due diligence and inquiry as
they have deemed appropriate. Investor has reviewed the merits and
evaluated the risks of the investment with its own tax and legal counsel to the
extent deemed advisable.
(e) Investor
has such knowledge and experience in financial and business matters, that
Investor is capable of evaluating the merits and risks of the purchase of the
Securities. Investor understands that the acquisition of the
Securities is a high risk and speculative investment involving the risk of total
loss.
(f) Investor
has the financial ability to bear the economic risk of its investment, has
adequate means of providing for its current needs and personal contingencies,
and has no need for liquidity with respect to its investment in the
Securities. Investor's overall commitment to investments, including
the Securities, which are not readily marketable, is not disproportionate to
Investor's net worth.
(g)
INVESTOR HAS RECEIVED AND READ THE COMPANY DOCUMENTS AND
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FULLY
RECOGNIZES THE RISKS OF INVESTMENT IN THE SECURITIES. In making
Investor's decision to purchase Securities herein subscribed for, Investor has
relied solely upon independent investigations made by Investor or Investor's
investment advisers, if any, and not solely upon the Company
Documents. Investor understands that an investment in the Securities
involves certain risks and Investor has taken full cognizance of and understands
such risks.
(h) Each
representation and warranty of Investor contained herein and all information
furnished by Investor to the Company, including the information furnished by
Investor in the Investor Questionnaire, is true correct and complete in all
respects.
(i)Company
and its officers and directors shall take such actions as may be required by law
to remove the Rule 144 restrictions immediately upon 6 months having elapsed
from the date of purchase of the Securities. This obligation shall
apply to each the 4,000,000 shares of stock (Securities) being purchased at this
time, as well as to the Securities issued in consideration of the 4,000,000
warrants that are being issued concurrently herewith. This shall
include, but not be limited to the Company having its legal counsel issue an
opinion letter in form satisfactory to the transfer agent, or such other person
or entity, as may be required, to have the Rule 144 restriction immediately
removed from the Securities such that the same are immediately freely and
without restriction saleable or transferrable by Investor.
(j)
Investor shall pay for the 4,000,000 shares of stock (Securities) in the
following manner: (1) the sum of five hundred thousand dollars upon execution of
this Subscription Agreement and (2) the balance of five hundred thousand dollars
commencing on January 1, 2010 and continuing thereafter on the first day of each
month until fully paid an amount equal to the lesser of (a) one-half of the
general and administrative expenses of the corporation for the preceding
calendar month or (b) the sum of fifty thousand dollars. Company
warrants and represents that all funds provided for herein with respect to the
purchase of the Securities shall only be used for the Company’s general and
administrative expenses.
The
foregoing representations and warranties are made by Investor and Company, and
the information furnished by Investor in the Investor Questionnaire has been so
furnished, with the intent that the same will be relied upon in determining its
suitability as a purchaser of Securities. Investor undertakes to notify the
Company immediately of any change in any representation or warranty or other
information relating to Investor set forth herein or in the Investor
Questionnaire. If more than one person is signing this Agreement,
each representation and warranty shall be a joint and several of each such
person.
5. INDEMNIFICATION. Investor
hereby agrees to indemnify and hold harmless the Company and all directors,
officers, employees, agents and affiliates from any and all damages, losses,
expenses or costs (including reasonable attorney’s fees) which they may incur by
reason of Investor’s failure to fulfill all of the terms and conditions of this
Subscription Agreement or by reason of Investor’s breach of any of the
representations, warranties or agreements contained in this Subscription
Agreement or in the Investor Questionnaire. All statements,
representations, warranties or covenants in the indemnification contained in
this Subscription Agreement shall survive the acceptance of this
subscription.
6. REVOCATION. Except
to the extent permitted by applicable securities laws, Investor agrees that
Investor shall not cancel, terminate or revoke this Subscription Agreement or
any agreement
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hereunder,
and that this Subscription Agreement shall survive Investor’s death, disability,
insolvency and bankruptcy.
7. APPLICABLE LAW;
VENUE. This Agreement shall be construed in accordance with
the laws of the State of California and deemed executed in Santa Rosa,
California. The venue of any action brought upon this Agreement or
with respect to the undersigned’s Securities in the Company or any of the events
surrounding his purchase thereof will be in the state or federal courts situated
in Sonoma County, California to which jurisdiction Investor
consents. Investor hereby waives his right to trial by jury with
respect to any action referenced in this Section 7.
8. MISCELLANEOUS
PROVISIONS. This Agreement sets
forth the entire agreement of the parties hereto with respect to the subject
matter hereof, and supersedes all prior oral and written negotiations,
representations, agreements and understandings of the parties. This
Agreement shall not be amended, altered or modified except by a written
instrument signed by all of the parties hereto. This Agreement shall
be governed by, construed and enforced in accordance with the internal laws of
the State of California. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, successors, assigns
and legal representatives. This Subscription Agreement shall be
effective upon the date of its acceptance and execution by the
Company.
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INVESTOR
SIGNATURE/SUBSCRIPTION AGREEMENT
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The
undersigned has received the Company Documents and has read this entire
Subscription Agreement together with such Company Documents. This
Subscription Agreement has been executed this 9th day of June, 2009 at Oakland,
CA.
Exact
Name on Investor Account: The Banks Group, LLC
Signature
: /s/ Xxxxxxx X.
Xxxxx
Xxxxxxx
X. Xxxxx, Manager
(This
signature should be that of (i) the Investor(s), or (ii) in the case of a trust,
partnership or corporation, the signature should be that of the representative
of the Investor such as the trustee, general partner or corporate
officer).
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Print
Name:
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Xxxxxxx
X. Xxxxx, Manager of The Banks Group,
LLC
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Print
Title:
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Manager
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AddressStreet:
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c/o
The Banks Group
P O Box
10287
Xxxxxxx Xxxxxxxxxx
00000
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Agreed
and Accepted:
ZAP,
a California corporation
BY:
Name:
StevenSchneider
Title:
Chief Executive
Officer
Date: June
9, 2009
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