RIDGEWOOD ZAP, LLC
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
as of March 29, 1999
Xxxx Xxxxx, Managing Director
ZAP Power Systems, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Re: Common Stock Purchase Warrant
Dear Xxxx:
This letter agreement is intended to constitute a binding contract with respect
to our obligation to the exercise of the Common Stock Purchase Warrant dated as
of March 29, 1999 (the "Warrant") for the purchase of Common Stock of ZAP Power
Systems, Inc.
We hereby agree that the Warrant shall be exercised totally for all shares, not
partially, prior to December 29, 1999 ("Exercise Date") if, in the reasonable
judgment of the Warrantholder,
1. The Company has not experienced a material adverse change in its
financial condition or business prospects; and
2. The Company has satisfied the following milestones of performance:
(a) Completion of the acquisition of a model bike rental unit which has gross
income of at least $400,000 per annum for the last two calendar years;
(b) Completion of at least three of the following six joint marketing agreements
that are currently being pursued by the Company: MTV Networks; Baywatch
Television Series; Ford Motor Company; KOA, Disney and Huffy Bikes; and
(c) Completion of the following financial milestones for the period commencing
on January 1, 1999: Net Sales of $8,500,000; Gross Profit of $2,500,000; and Net
Profit of $350,000.
In the event that we wish to exercise the Warrant before the Exercise Date, we
will notify you of the proposed exercise date and you agree to furnish us with a
written certification from you, as Managing Director of ZAP Power Systems, that
the conditions set forth above have been satisfied. To the extent required by
us, you also agree to furnish us with copies of joint marketing agreements and
with a balance sheet dated within 30 days prior to the proposed exercise date
and an income statement for the 12-month period ending within 30 days prior to
the proposed exercise date.
Unless we have exercised the Warrant sooner, you agree to furnish us with the
information referenced in the preceding paragraph within 20 days prior to the
Exercise Date. If the conditions set forth in paragraphs numbered 1 and 2 above
are met, in our reasonable judgment, we will exercise the Warrant in accordance
with the procedures set forth in the Warrant.
This letter agreement shall be deemed a contract governed by the laws of
California. Please countersign below as an indication of your acceptance and
approval of the terms of this letter.
Sincerely yours,
RIDGEWOOD ZAP, LLC
By: Ridgewood Management Corporation
its Manager
By:_____________________
Authorized Agent
Accepted and Agreed:
ZAP POWER SYSTEMS
By:_____________________
Authorized Agent
BTV\126823.1
