AGREEMENT
AGREEMENT
The
following agreement is made between ZAP! (“ZAP”), on the one hand, and Xxxxxx
Xxxxxxxxx (“Xxxxxxxxx”) and Smart Automobile LLC (“Smart Automobile”), on the
other.
1. ZAP
agrees that, within seven (7) days of the signing of this agreement, ZAP shall
provide to Xxxxxxxxx consideration consisting of a number of shares of ZAP
stock, and a number of warrants to purchase ZAP stock. It is understood that
Xxxxxxxxx has retuned the preferred shares to ZAP, and this agreement supercedes
the previous agreements of April 19, 2004, and October 25, 2004, in regard
to
payments from ZAP. It is agreed that Zap shall provide Xxxxxxxxx 300,000 shares
of ZAP stock based on the aggregate amount of cars in inventory to be delivered
by ZAP. Fifty thousand of the 300,000 shares will be issued as soon as possible
and the balance after the shareholder meeting whereas the shareholders vote
to
increase the authorized amount of ZAP shares available in the treasury.
Additionally Xxxxxxxxx will receive 700,000 shares at a rate of 50,000 shares
per 100 cars delivered. Xxxxxxxxx will receive 1 million warrants with a strike
price of $1.75 which are not subject to the delivery of automobiles.
Consideration in this paragraph is not subject to mediation.
2.
In
exchange for the foregoing consideration, Xxxxxxxxx agrees to deliver to ZAP,
within seven (7) days of the execution of this agreement, all ownership, right,
title and interest in all such “DOT rights” held by Xxxxxxxxx and Smart
Automobile, including all test results from the various crash and engineering,
analyses, tests, performed by Xxxxxxxxx and Smart Automobile, or paid for by
Xxxxxxxxx and Smart Automobile and contracted out to third parties and also
including all physical ownership rights (which in turn include but are not
limited to all molds and tooling and parts paid for such lights as made the
automobiles DOT-compliant, as well as all interior foam and cross-beam
pieces).
3. Immediately
following the occurrence of the foregoing matters described in paragraphs 1
and
2, ZAP shall undertake to procure the issuance of additional stock and warrants
from ZAP’s board, in order to negotiate a purchase by ZAP of the assets (but not
the liabilities of) Smart Automobile and of all remaining rights and assets
held
by Heidemann that pertain to the business of Smart Automobile and the Smart
Car
and/or ZAP’s business. The foregoing description of assets to be procured by ZAP
from Smart Automobile and Xxxxxxxxx shall specifically include the right of
ZAP
(a) to transact business directly, and without any intermediary or
intermediaries, with G&K Automotive and/or Xxxxxx Xxxxxxx; (b) to take
ownership and delivery of any and all equipment, technologies, licenses and
distribution rights (concerning conversion and otherwise) of Smart Automobile
whether or not such assets are ones for which ZAP paid sums to Smart Automobile;
(c) to procure from Xxxxxxxxx (i) any and all updates available concerning
those
service computers purchased by ZAP, (ii) such technical assistance as may
pertain to matters encompassed in any agreements between Smart Automobile or
Xxxxxxxxx, on the one hand, and ZAP, on the other, and (iii) any assistance
in
locating
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additional
Smart Cars during project periods covered by the aforesaid agreements; and
(d)
to have the cooperation of Xxxxxxxxx in all press-related matters.
4.
Both
sides understand that (a) Xxxxxxxxx wishes to receive, as consideration for
such
rights and assets pertaining to paragraph 3, the total of 2 million warrants,
plus 2 million shares of stock, and (b) ZAP is amenable to paying a fair amount
of consideration for such assets as described above in paragraph 3. To that
end,
not later than July 30, 2006, the parties shall meet and negotiate in good
faith, for the purpose of reaching agreement on the amount of compensation,
consisting of warrants and/or stock, to be paid to Xxxxxxxxx for the
aforementioned assets. In the event that no resolution is reached between the
parties by the close of July 2006, the parties shall jointly select a mediator
to assist in resolving - and, if unsuccessful, thereafter an arbitrator who
shall be a retired judge from the state or federal courts in California, to
decide - all issues that have not yet been voluntarily resolved between the
parties.
5. All
notices that are required or permitted to be made in connection with this
agreement, or any other dispute between the parties relating to the subject
matter of this agreement, shall be sent by mail or fax as follows:
For
ZAP, notice may be made to:
Xxxx
X. Xxxxxx, Esq.
Xxxxxx
Xxxxx & Xxxxxx LLP
000
X. Xxxxxxx Xxxxx, #000
Xxxxxxx
Xxxxx, XX 00000
Phone
310/000-0000
Fax
310/000-0000 / email: xxxx@xxxxxxx.xxx
For
Xxxxxxxxx, notice may be made to:
Xx.
Xxxxxx Xxxxxxxxx
0000
Xxxx Xxxxx Xxxx., Xxx. 000
Xxxx
Xxxxx, Xxxxxxxxxx 00000
Phone
562/000-0000
Fax
562/000-0000 / email: xxxxxxxxx@xxxxxxxx-xxx.xxx
In
the event either ZAP or Xxxxxxxxx wishes to change the above address or fax
number for purposes of notice, it shall be incumbent on either to send, by
certified mail, return receipt required, written notice of the change of address
and fax number to the other, specifically designating the new information as
the
changed notice provision. Notice provided by fax shall be deemed made on the
day
the fax or e-mail is transmitted.
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6. Each
party to this Agreement has been advised to consult with counsel to
independently represent them in this matter, and, in signing this Agreement,
each has either retained such counsel, or has intentionally and knowingly
elected not to do so, and to proceed with the Agreement without counsel. The
parties understand that Xxxx Xxxxxx and Xxxxxx Xxxxx & Xxxxxx represent only
ZAP in connection with this agreement, and that in no respect do Xxxx Xxxxxx
or
Xxxxxx Xxxxx & Xxxxxx LLP represent Xxxxxxxxx in this or any other
matter.
7. This
instrument contains the entire agreement and understanding concerning the
aforementioned issues, and the subject matter therein, and supercedes and
replaces all prior negotiations and agreements between the parties hereto,
or
any of them, whether written or oral.
8. Upon
the resolution of the issue concerning the amount and type of consideration
to
be paid from ZAP to Xxxxxxxxx (as referenced above in paragraph 4), there shall
become effective a release between the parties, pursuant to which each shall,
for itself or himself, and on behalf of their principals, officers, employees
and/or agents, does hereby release and absolutely forever discharge the other,
from any and all claims, demands, debts, liabilities, obliga-tions, accounts,
and causes of action of every kind and nature whatsoever, whether now known
or
unknown, suspected or unsuspect-ed, which they had or now has against the other,
so that neither shall have any claim of any kind or nature whatsoever on or
against the other, on any contract or account, express or implied in fact or
implied in law, or on any supposed liability or thing or act undertaken, done,
or omitted to be done, at any time prior to the date hereof. As a prelude to
the
completion of that negotiation referenced in paragraph 4, ZAP agrees to extend
the length of the existing 1 million dollar note to ZAP for a period of two
years from the date of this contract under the same rate terms as in the
original note.
9. The
release specified in paragraph 8 is one for which each party hereto hereby
acknowledges that it has been informed by its respective attorneys of, and
that
it is familiar with, Section 1542 of the Civil
Code
of the State of California, which provides as follows:
“A
general release does not extend to claims which the creditor does not know
or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settle-ment with the
debtor.”
Pursuant
to the release specified in paragraph 8, each party expressly waives and
relinquishes all rights and benefits vis-a-vis the parties released hereby
which
it has or may have under Section 1542 of the Civil
Code
to the full extent it lawfully may waive such rights and benefits. Each party
hereto acknowledges that it is aware that it, or its attorneys, may hereafter
discover facts different from or in addition to those which it or its attorneys
now know or believe to be true with respect to the claims, demands, debts,
liabilities, ac-counts, obligations, and causes of action of every kind so
released, and each agrees that the general release so given shall be
and
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remain
in effect as a full and complete release of the parties released thereby
notwithstanding any such different or additional facts.
10. This
Agreement may not be changed, modified, or amended except by a written
instrument signed by all parties hereto.
11. This
Agreement is made and entered into in the State of California and shall in
all
respects be interpreted and enforced under the laws of said State. It shall
be
construed without regard to the identity of the person who drafted the various
provisions. Each and every provision of this Agreement shall be construed as
though all of the parties participated equally in the drafting of them, and
any
rule of construction that a document is to be construed against the drafting
party shall not be applicable to this Agreement.
12. EACH
SIGNATORY HERETO REPRESENTS THAT HE OR ITS REPRESENTATIVE HAS READ IN FULL,
AND
UNDERSTANDS, EACH OF THE PROVISIONS SET FORTH IN THIS AGREEMENT.
IT
IS SO AGREED:
Entered
into in Beverly Hills, California, on July 14, 2006
/s/ Xxxxxx
Xxxxxxxxx
/s/ Xxxxxx
Xxxxxxxxx
Smart
Automobile LLC
Xxxxxx
Xxxxxxxxx
Entered
into in Beverly Hills, California, on July 14, 2006
/s/ ZAP by Xxxxxx
Xxxxxxxxx
ZAP (by its CEO Xxxxxx Xxxxxxxxx)
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