EXHIBIT 99.2
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MASTER DISTRIBUTION AGREEMENT
BETWEEN
APOLLO ENERGY SYSTEMS, INC.
AND
VOLTAGE VEHICLES CORPORATION,
A SUBSIDIARY OF ZAP INCORPORATED
MASTER DISTRIBUTION AGREEMENT
between
APOLLO ENERGY SYSTEMS INC
and
VOLTAGE VEHICLES CORPORATION
TABLE OF CONTENTS
1.0 PARTIES Page 2
2.0 RECITALS Page 2
3.0 DEFINITIONS. Page 2
4.0 EXCLUSIVE MASTER DISTRIBUTION TERRITORY Page 3
5.0 RIGHT OF FIRST REFUSAL Page 3
6.0. CONSIDERATION Page 4
7.0 TERM Page 4
8.0 QUOTAS Page 4
9.0 SALES TO DISTRIBUTOR Page 5
10.0 EXCLUSIONS FROM COMMISSION Page 5
11.0 DISTRIBUTOR's restrictionS Page 5
12.0 DISTRIBUTOR as independent contractor Page 5
13.0 compliance with law Page 6
14.0 material to be furnished by MANUFACTURER Page 6
15.0 training Page 6
16.0 MANUFACTURER's warranty Page 6
17.0 indemnification Page 7
18.0 DISTRIBUTOR to promote sales Page 7
19.0 termination Page 7
20.0 Exclusivity Page 8
21.0 sale to MANUFACTURER or subsidiaries Page 8
22.0 acceptance of orders Page 8
23.0 Responsibility of MANUFACTURER Page 9
24.0 place of business and advertising Page 9
25.0 assignment Page 9
26.0 waiver Page 10
27.0 governing law Page 10
30.0 aRBITRATION Page 10
31.0 effect of partial invalidity Page 10
32.0 paragraph headings Page 11
33.0 apoLLO POWER PLANTS Page 11
MASTER DISTRIBUTION AGREEMENT
between
APOLLO ENERGY SYSTEMS INC
and
Voltage Vehicles Corporation
1.0 PARTIES
This AGREEMENT made, effective as of August 6, 2004, by and between APOLLO
ENERGY SYSTEMS INC , a corporation organized and existing under the laws the
Commonwealth of Delaware, with its principal office located at 0000 X.X. 00xx
Xxxxx, Xxxxxxx Xxxxx, Xxxxxxx 00000, Xxxxxx Xxxxxx of America, referred to as
MANUFACTURER, and Voltage Vehicles, a corporation organized and existing under
the laws of the state of Nevada, located at 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxx
Xxxx, Xxxxxx, 00000, Xxxxxx Xxxxxx of America, referred to as DISTRIBUTOR.
2.0 RECITALS
2.1 MANUFACTURER is engaged in the manufacture of APOLLO ENERGY SYSTEMS, motor
vehicles and other products as defined in the AGREEMENT. MANUFACTURER has
offered to appoint DISTRIBUTOR as an authorized APOLLO ENERGY SYSTEMS INC.
DISTRIBUTOR for certain products in accordance with the terms and conditions set
forth in this AGREEMENT and for the period as provided in this AGREEMENT.
2.2. DISTRIBUTOR desires to market MANUFACTURER's products within the
territories specified in the AGREEMENT. DISTRIBUTOR has expressed its
willingness to become an authorized APOLLO ENERGY SYSTEMS INC. DISTRIBUTOR of
certain products of MANUFACTURER in accordance with the terms and conditions set
forth in the AGREEMENT.
2.3 MANUFACTURER desires to grant to DISTRIBUTOR an exclusive Master
Distribution License as specified in this AGREEMENT.
In consideration of the matters described above, and of the mutual benefits and
obligations set forth in this AGREEMENT, the parties agree as follows:
3.0 DEFINITIONS.
As used in this AGREEMENT, the terms defined herein below, have the following
meanings:
TERM MEANING
MANUFACTURER APOLLO ENERGY SYSTEMS INC
DISTRIBUTOR Voltage Vehicles Corporation
PRODUCT APOLLO ENERGY SYSTEMS INC motor vehicles including
but not limited to the Silver Volt, Mars II, ASV-1
and others to be developed by MANUFACTURER.
AUTHORIZED APOLLO ENERGY SYSTEMS INC manufactured parts and
PRODUCTS or equipment, including but not limited to:
AUTHORIZED
REPLACEMENT PARTS Apollo Power Plants, Models 101B, 102C, 104C, 115C,
127C and successors;
Fuel Cells, including but not limited to Phosphoric
Acid Fuel Cells, Proton Exchange Membrane Fuel
Cells, Liquid Molten Carbonate Fuel Cells, Solid
Oxide Fuel Cells, Alkaline Apollo Fuel Cells,
Direct Methanol Mars Fuel Cells, and successors;
Tri-polar Lead Cobalt Batteries;
Propulsion Fuel, Ammonia Cracker Aqua-Ammonia
De-watering units & Hydrocarbon Reformers, Fuel
Tanks, Fuel Pumps;
Electric Motors;
Electronic Motor Controllers;
Fast and Slow On-Board and Stand Alone Chargers;
AC to DC Converters;
Charge Receptacles and Wiring Harnesses;
Solar Cells;
DC to AC Inverters;
Watt Hour Meters; and
Microprocessors;
4.0 EXCLUSIVE MASTER DISTRIBUTION TERRITORY
MANUFACTURER grants to DISTRIBUTOR the exclusive right to sell the Products to a
certain class of customer within the fifty states of the United States of
America.
4.1 CUSTOMERS. The DISTRIBUTOR will sell exclusively to companies whose business
substantially involves the sale of Used Cars or Used Vehicles powered by
internal combustion engines. It is understood that once these companies become
customers of the DISTRIBUTOR, they may then be considered as New Car Dealers for
the sale of electrically powered vehicles.
5.0 FIRST RIGHT OF REFUSAL.
MANUFACTURER and DISTRIBUTOR may enter into other AGREEMENTS that may grant
DISTRIBUTOR other territories, but no such AGREEMENT is in existence at this
time.
6.0. CONSIDERATION
Consideration for this contract will be 25,000 of ZAP Series B-2 Warrants.
7.0 TERM
7.1 The term of this AGREEMENT shall be from August 6, 2004 through August
5,2009, as long as the minimum quota is met as set forth in Paragraph 8.
7.2 DISTRIBUTOR shall have an option to renew this AGREEMENT at the end of that
period of time for additional periods of one (1) year, up to five additional
years, provided the minimum annual quota is met in Paragraph 8.0.
7.3 In this connection, if DISTRIBUTOR has met its quota set forth in this
AGREEMENT, such renewal for five (5) years shall be deemed automatic unless
DISTRIBUTOR notifies MANUFACTURER in writing of its intention not to renew the
AGREEMENT. Notice of the exercise of the option not to renew shall be given to
MANUFACTURER in writing not less than ninety (90) days prior to the expiration
date of the AGREEMENT.
8.0 QUOTAS
8.1 Starting in year 2004, the DISTRIBUTOR shall order from the MANUFACTURER
Electric Propulsion Systems, as defined above, installed in vehicles of a size
and weight similar to the Classic VW at a cost of $13,500 per vehicle for the
System and $900 per vehicle for installation, in the following quantities:
Year 2004 50 Systems, Installed
Year 2005 450 Systems, Installed
Year 2006 1,500 Systems, Installed
Year 2007 2,000 Systems, Installed
Year 2008 3,000 Systems, Installed
Should the above quota not be met, this agreement may be terminated by either
party giving to the other party a thirty (30) day written notice of termination.
In the event of termination, Apollo may retain the 25,000 Warrants as liquidated
damages.
9.0 SALES PRICE TO DISTRIBUTOR
Intentiaonally omitted.
10.0 EXCLUSIONS FROM COMMISSION
Intentionally omitted.
11.0 DISTRIBUTOR'S RESTRICTIONS
11.1 DISTRIBUTOR accepts the above granted Master Distribution License to
purchase the PRODUCTS and agrees to devote its best efforts to sell and purchase
all of the Products and make the minimum purchases as set forth under the Quota
in paragraph 8.
11.2 DISTRIBUTOR further agrees to develop sales of the Products exclusively in
the above-specified territory and not to sell or offer for sale any of the
Products outside this territory or others defined in paragraph 4.1 above.
11.3 DISTRIBUTOR agrees and understands that the MANUFACTURER has the right to
sell and may sell the Products in the Territory to customers other than those
described in paragraph 4.1 above without any obligation or compensation to the
DISTRIBUTOR. Some of these customers may be electric utility companies or New
Car Dealers.
12.0 DISTRIBUTOR AS INDEPENDENT CONTRACTOR
12.1 DISTRIBUTOR is and shall remain an independent contractor and DISTRIBUTOR
alone shall be answerable for any loss or damage caused by DISTRIBUTOR, its
employees or agents.
12.2 DISTRIBUTOR may indicate in its advertising and on its stationery that
DISTRIBUTOR is the authorized APOLLO ENERGY SYSTEMS INC. DISTRIBUTOR and that
PRODUCTS promoted or sold by DISTRIBUTOR were manufactured by MANUFACTURER, and
MANUFACTURER does not thereby appoint DISTRIBUTOR its agent or authorized
DISTRIBUTOR to represent itself as such, nor does MANUFACTURER authorize
DISTRIBUTOR to pledge the credit of MANUFACTURER or enter into a contract for
MANUFACTURER, nor does MANUFACTURER convey to DISTRIBUTOR any property interest
in MANUFACTURER's corporate name, trademarks, or patents. Whatever use
DISTRIBUTOR makes of the corporate name and/or trademark of MANUFACTURER shall
for the exclusive benefit of MANUFACTURER.
12.3 MANUFACTURER grants to DISTRIBUTOR, and DISTRIBUTOR accepts, an exclusive
Master Distribution License (pursuant to the terms of section 4.1 above) to sell
and distribute MANUFACTURER's PRODUCTS and entitle retail automobile dealers as
DISTRIBUTOR'S dealers in MANUFACTURER's PRODUCTS within the 50 states of the
United States of America.
13.0 COMPLIANCE WITH LAW
13.1 DISTRIBUTOR agrees that it will not violate any applicable law or
regulation of any country or political subdivision thereof in performing or
purporting to perform any act arising out of or in connection with this
AGREEMENT.
13.2 Pursuant to the above-stated obligation, DISTRIBUTOR agrees to maintain
such records as required by the applicable laws and regulations and to provide
all written assurances required by MANUFACTURER in connection with such laws and
regulations.
14.0 MATERIAL TO BE FURNISHED BY MANUFACTURER
MANUFACTURER will furnish to DISTRIBUTOR technical and sales promotional
material, brochures, bulletins, and specification data on the PRODUCTS. Such
material will be furnished in reasonable quantities to DISTRIBUTOR at
MANUFACTURER'S actual cost.
15.0 TRAINING
DISTRIBUTOR agrees to make available to MANUFACTURER appropriate personnel at
reasonable times and places for training on servicing the PRODUCTS. Such
training to be provided by MANUFACTURER at MANUFACTURER'S location to help
DISTRIBUTOR fulfill its obligations under and pursuant to this AGREEMENT.
16.0 MANUFACTURER'S WARRANTY
16.1 DISTRIBUTOR acknowledges and agrees that each PRODUCT sold by DISTRIBUTOR
is subject to MANUFACTURER's warranty for such PRODUCT as set forth in the
PRODUCT warranty applicable to such PRODUCT. Such warranty shall survive
termination of this AGREEMENT.
16.2 MANUFACTURER reserves the right to change the terms of its PRODUCT warranty
applicable to PRODUCTS from time to time.
16.3 MANUFACTURER's sole obligation under its PRODUCT warranty will be limited
to either, and at MANUFACTURER's option and expense, repairing or replacing the
PRODUCT or parts of the PRODUCT returned to the MANUFACTURER by DISTRIBUTOR for
DISTRIBUTOR's customer, freight on board MANUFACTURER's plant, in which
MANUFACTURER reasonably determines did not conform to the applicable
MANUFACTURER PRODUCT warranty.
16.4 DISTRIBUTOR's or DISTRIBUTOR's customer's exclusive remedy for breach of
MANUFACTURER's PRODUCT warranty will be the enforcement of MANUFACTURER's
obligations under the applicable PRODUCT warranty against MANUFACTURER.
16.5 DISTRIBUTOR is not authorized to assume on behalf of MANUFACTURER any other
or additional warranty obligations or liability in connection with PRODUCTS and
DISTRIBUTOR agrees to indemnify and hold MANUFACTURER harmless with respect to
any such other or additional warranty obligations or liability granted by
DISTRIBUTOR.
16.6 MANUFACTURER's PRODUCT warranty is exclusive in lieu of all other
warranties, whether expressed, implied, or statutory, including, but not limited
to, any warranty of merchantability or fitness for any particular purpose.
17.0 INDEMNIFICATION
17.1 DISTRIBUTOR does not become, and is not, by virtue of this AGREMENT, the
agent or legal representative of MANUFACTURER for any purpose whatsoever.
17.2 DISTRIBUTOR is not granted any right or authority to assume or create any
obligation or responsibility, express or implied, on behalf of or in the name of
the MANUFACTURER in any manner or thing whatsoever either by MANUFACTURER's acts
or the acts of MANUFACTURER's agents, employees, or attorneys.
17.3 DISTRIBUTOR covenants and agrees to indemnify MANUFACTURER for any and all
claims or judgments arising from the actions of DISTRIBUTOR or DISTRIBUTOR's
agents, employees, or attorneys that create an obligation on part of
MANUFACTURER as set forth in this AGREEMENT. This covenant does not negate or
modify any implied warranties of merchantability or of fitness for a particular
purpose.
17.4 No director, officer, or employee of the MANUFACTURER shall be personally
liable for the obligations under this AGREEMENT, except for acts which
constitute fraud or willful misconduct.
18.0 DISTRIBUTOR TO PROMOTE SALES
DISTRIBUTOR agrees that it will actively promote the sale of PRODUCTS and to
this end of will:
18.1 Promote the sale of the PRODUCTS through a sales program including personal
and mail solicitation of retail automobile dealers and provide prompt and
reliable service and PRODUCT demonstrations;
18.2 Require its retail automobile dealers to maintain suitable displays of the
PRODUCTS on their premises and offer demonstrations of the PRODUCTS to their
potential customers; and
18.3 Require its retail automobile dealers to maintain a representative
inventory of PRODUCTS, as mutually agreed between MANUFACTURER and DISTRIBUTOR,
and to employ technically qualified personnel to assure prompt delivery to its
customers.
19.0 TERMINATION
19.1 This AGREEMENT shall continue in force and govern all transactions and
relations between the parties to this AGREEMENT until canceled or terminated.
19.2 Either party may cancel or terminate this AGREEMENT with cause, and
including any term, conditions, agreements, covenants or breach of the
provisions of this AGREEMENT, providing the party desiring to terminate or
cancel the AGREEMENT gives the other notice at least thirty (30) days prior to
the effective date of such cancellation, such notice to be given in writing and
delivered to the address set forth above. In the event that DISTRIBUTOR files a
petition of bankruptcy, the AGREEMENT may be terminated immediately.
19.3 Any bona fide order accepted by MANUFACTURER shall not be in any way
affected by such cancellation or termination.
19.4 Such cancellation or termination shall not release DISTRIBUTOR from any
payments and owing to MANUFACTURER.
19.5 Upon termination, DISTRIBUTOR will not sell, market or advertise
MANUFACTURER'S Products to existing or prospective dealers within DISTRIBUTOR'S
distribution network and, MANUFACTURER will not sell, market or advertise
MANUFACTURER's Products to existing or rospective dealers within DISTRIBUTOR'S
distribution network.
19.6 No other penalties will be associated with termination of this AGREEMENT.
20.0 EXCLUSIVITY
It is understood and agreed that for so long as this AGREEMENT shall be in
effect, no other person, firm, or corporation will be granted a Master
Distribution License for selling the same PRODUCT in the above stated territory,
except as set forth in this AGREEMENT.
21.0 SALE TO MANUFACTURER OR SUBSIDIARIES OR OTHER DEALERS
MANUFACTURER reserves the right to sell its PRODUCTS to any and all departments
and subsidiaries of MANUFACTURER and other dealers, distributors, manufacturers
or suppliers outside of this AGREEMENT without compensation or commission to
DISTRIBUTOR.
22.0 ACCEPTANCE OF ORDERS
22.1 All orders received by MANUFACTURER are subject to acceptance by
MANUFACTURER and MANUFACTURER agrees that will endeavor to fill the orders as
promptly as practicable; however, all orders, whether a delivery date is
specified or not, shall be subject to delays in manufacture or in delivery due
to any cause beyond the reasonable control of MANUFACTURER.
22.2 DISTRIBUTOR expressly releases MANUFACTURER from any and all liability or
loss arising from the failure of MANUFACTURER to fill any orders of DISTRIBUTOR
due to cause beyond control of MANUFACTURER.
22.3 In the event notice of nonacceptance of an order is not deposited in the
United States mail to DISTRIBUTOR within ten days after the order is received by
MANUFACTURER, such order shall be accepted; provided, however, MANUFACTURER
shall not be obligated to ship anywhere until arrangements have been made by
DISTRIBUTOR with MANUFACTURER for payment. All items covered by such orders
shall be shipped by MANUFACTURER freight on board factory in Pompano Beach,
Florida, or from such other location where locations as MANUFACTURER shall deem
proper.
23.0 RESPONSIBILITY OF MANUFACTURER
23.1 MANUFACTURER shall be responsible for those items specified on the order as
accepted and shall have no responsibility for the installation of REPLACEMENT
PARTS.
23.2 DISTRIBUTOR shall carefully check all shipping and immediately upon
delivery MANUFACTURER shall be notified in writing within ten calendar days
after delivery of any shortages or defects. If no notice is given within such
time, the shipment shall be deemed accepted as shipped.
23.3 MANUFACTURER shall have no responsibility or liability for changes and
shall have no responsibility or liability for any items of property not ordered
from MANUFACTURER.
23.4 All orders shall be signed and approved by DISTRIBUTOR and the customer
before the sale is made by DISTRIBUTOR.
24.0 PLACE OF BUSINESS AND ADVERTISING
24.1 DISTRIBUTOR agrees to maintain a permanent place of business and to use its
best efforts in the sale of MANUFACTURER's PRODUCTS.
24.2 DISTRIBUTOR shall pay all of its own expenses including all expenses of its
sales personnel and sales organization.
24.3 MANUFACTURER will provide brochures, literature, sales representatives'
books and price lists relating to MANUFACTURER's PRODUCTS.
DISTRIBUTOR acknowledges that the MANUFACTURER is either the owner or licensor
of all trademarks, copyrights, patents, design rights, and other industrial and
intellectual property rights used or embodied in the PRODUCTS or parts and any
such rights that the MANUFACTURER may have in the foregoing remain the sole and
exclusive property of the MANUFACTURER.
24.4 No content, on MANUFACTURER's website, including copy written material, may
be used on any other website or publication without the written permission of
MANUFACTURER and such consent may be withdrawn at any time.
25.0 ASSIGNMENT
This AGREEMENT constitutes a personal contract and DISTRIBUTOR shall not
transfer this AGREEMENT without MANUFACTURER's prior, express, and written
consent. MANUFACTURER consents to the assignment of this AGREEMENT to AUTO
DISTRIBUTORS, INCORPORATED, a Nevada corporation, or to ZAP Incorporated, a
California corporation, should DISTRIBUTOR desire to do so.
26.0 WAIVER
26.1 Failure of either party at any time to require performance by the other
party of any provision of this AGREEMENT shall in no way affect the right to
require such performance at any time thereafter.
26.2 The waiver of either party to any provision this AGREEMENT shall not be
taken or held to be a waiver of any succeeding breach of such provisions or as a
waiver of the provision itself.
27.0 GOVERNING LAW
It is agreed that this AGREEMENT shall be governed by, construed, and enforced
in accordance with the laws of the state of Nevada.
28.0 ENTIRE AGREEMENT
This AGREEMENT shall constitute the entire AGREEMENT between the parties. Any
prior understanding or representation of any kind preceding the date of this
AGREEMENT shall not be binding on either party except to the extent incorporated
in this AGREEMENT.
29.0 MODIFICATION OF AGREEMENT
Any modification of this AGREEMENT or additional obligation assumed by either
party in connection with the AGREEMENT shall be binding only if evidenced in
writing signed by each party or an authorized representative of each party.
30.0 ARBITRATION
Any controversy or claim arising out of or relating to this AGREEMENT, or breach
thereof, shall be settled by binding arbitration administered by the American
Arbitration Assoication under its Commercial Arbitration Rules, and judgment on
the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. Arbitration hearings shall be held in Miami, Florida and
each party shall pay its own expenses.
31.0 EFFECT OF PARTIAL INVALIDITY
The invalidity of any portion of this AGREEMENT will not and shall not be deemed
to affect the validity of any other provision. In the event that any provision
of this AGREEMENT is held to be invalid, the parties agree that the remaining
provisions shall be deemed to be in full force and effect as if they had been
executed by both parties subsequent to the expungement of the invalid provision.
32.0 PARAGRAPH HEADINGS
The titles to the paragraphs this AGREEMENT are solely for the convenience of
the parties and shall not be used to explain, modify, simplify, or aid in the
interpretation of the provisions of this AGREEMENT.
33.0 APOLLO POWER PLANTS
In the event that the DISTRIBUTOR proposes an acceptable Limited Plan of
Distribution to the MANUFACTURER covering the sale and maintenance of On-Site
Apollo Power Plants in certain parts of the territory, the MANUFACTURER will
grant the DISTRIBUTOR the right to sell and maintain Apollo Power Plants in
those areas.
APOLLO ENERGY SYSTEMS INC, a Delaware Corporation,
Dated: August 6, 2004 By /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, Chairman of the Board
Voltage Vehicles, a Nevada Corporation,
Dated: August 6, 2004 By /s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx, Chairman of the Board
VOLTAGE VEHICLES CORPORATION
000 0XX Xxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Tel 000 000 0000 - FAX 000 000 0000
PURCHASE ORDER
August 6, 2004
TO: Apollo Energy Systems, Inc.
0000 X.X. 00xx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
Electric Propulsion Systems ($13,500) = Installation ($900) = $14,400 per System
--------------------------------------------------------------------------------
Deliver In Quantity Unit Price Total
---------- -------- ---------- ------------
2004 50 $14,400 $ 720,000
2005 450 $14,400 6,480,000
2006 1,500 $14,400 21,600,000
2007 2,000 $14,400 28,800,000
2008 3,000 $14,400 43,200,000
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TOTAL $100,800,000
VOLTAGE VEHICLES CORPORATION
/s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxxxx, Chairman
This order accepted by:
APOLLO ENERGY SYSTEMS, INC.
/s/ Xxxxxx R, Aronsson
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Xxxxxx X. Xxxxxxxx, Chairman
