EXHIBIT 99.2
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Conversion Agreement
October 25, 2004
It was agreed in the Exclusive Purchase, License and Supply Agreement of April
19, 2004, that the terms of a more detailed common agreement would be completed
by the parties, ZAP and Smart Automobile, LLC.
It is agreed that the Smart Automobile, LLC will turn in their original
Preferred shares and receive $8 million of new Preferred Shares with the
designation of SA. Each preferred share has a value of $1,000. These preferred
shares will convert to ZAP Common Shares under the following formula: For every
1,000 Smart vehicles delivered to ZAP in the years, 2004,2005 and 2006 which are
fully compliant to sell in the United States as new cars, will allow the holder
of 500 shares of preferred stock SA to convert to $500,000 of common stock, and
allow the holder to receive 505,000 warrants with an exercise price of $2.50 per
share exercisable through 2006, or when all the preferred have been converted.
Upon EPA compliance, and the legal right to sell the first 98 vehicles currently
in inventory, the holder can convert 500 preferred shares to $500,000 of common
stock immediately.
It is also agreed to appoint Xxxxxx Xxxxxxxxx and Xxxxxxxx Xxxxxx to the ZAP
Advisory Board.
Agreed,
/s/ Xxxxxx Xxxxxxxxx /s/ Xxxxxx Xxxxxxxx
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ZAP Smart-Automobile, LLC
CEO President
Xxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxxx
