exhibit_10-4.htm


    
      

    

    EXHIBIT
10.4

     

    
      
        
          
            	
                    

                  	 	
                    "Authorized
      Personnel" and on the Retailer's representation, warranty and assurance
      that the personal services of such person(s) will be provided in the
      operations and management of the Retailership. ZMC is entering into this
      Agreement in reliance on the representation and warranty of the Retailer
      that Schedule F hereto fully and accurately identifies all persons having
      any direct or indirect legal or beneficial interest in the Retailer and
      the nature of any such interest. The Retailer shall promptly notify ZMC of
      changes in its management or any direct or indirect changes in its
      ownership including without limitation any changes in the interests held
      by the persons identified in Schedule F. ZMC reserves the right to
      terminate this Agreement if there is any change in the direct or indirect
      ownership or operating management of Retailer which would adversely affect
      ZMC, however accomplished, without the written consent of ZMC, such
      consent not to be unreasonably withheld.   

                     

                    1.5          
      Volume Commitment.   

                     

                    Retailer
      agrees to purchase a minimum quantity of Products each year as identified
      in Schedule "A", such Schedule to be reviewed and updated annually as
      applicable 60 days prior to the anniversary of this Agreement. In the
      event of Retailer failing to meet any Minimum Commitment during the Term,
      Retailer may make up the shortfall in the following quarter, however in
      the event that Retailer fails to meet its Minimum Commitment by the end of
      said following quarter, ZMC may terminate this
      Agreement.

                     

                    2             
      RESPONSIBILITIES OF RETAILER   

                     

                    2.1          
      Best Interest of ZMC.   

                     

                    Retailer
      shall use its reasonable commercial efforts to market, sell and distribute
      the Products within the Territory and shall, at all times, serve and
      promote the best interest of ZMC. Retailer shall not engage in any
      activities, practices or business endeavors that
      would:    
      

                     

                    (a)         
        hinder
      ZMC's ability to perform its obligations
      hereunder;    
      

                     

                    (b)         
      reflect
      adversely upon the reputation of ZMC, its employees, or sales
      organization;    
      

                     

                    (c)           diminish
      or detract from the sales potential of the Products or their
      attractiveness to customers; or    
      

                     

                    (d)           constitute
      a false or misleading representation to a customer, or others regarding
      ZMC or the Products. Retailer shall not make any representations,
      warranties or guarantees with respect to the Products or the
      specifications, features or capabilities of the Products or publish any
      technical description of the Products, except as expressly set forth in
      ZMC's documentation accompanying the Products or ZMC's literature
      describing the Products.

                  
	

                    RETAILER
      AGREEMENT

                     

                    (the
      "Agreement")

                     

                    
                      THIS
      AGREEMENT made
      the 10
      day of September, 2008

                       

                      BETWEEN:
      ZENN
      MOTOR COMPANY LIMITED, a corporation incorporated pursuant to the
      laws of the Canadian Province of Ontario, ("ZMC") whose address is 85
      Scarsdale Road, Suite 100, Toronto, Ontario, M3B 2R2, and EVCARCO,
      INC. DBA EVCarCo.com    , a corporation
      incorporated
      pursuant
      to
      the
      laws
      of
      Nevada ("Retailer")whose
      address is
      7703
      SAND ST. FORT WORTH, TX
      76118               ;

                       

                      WHEREAS
      Retailer desires to distribute the products identified in Schedule
      "A" and/or any products periodically supplied to Retailer by ZMC for
      distribution in accordance with the terms of this Agreement (the "Products");

                       

                      AND
      WHEREAS ZMC desires to appoint Retailer as a Retailer of the
      Products in the geographic territory identified in Schedule "A" (the "Territory");

                       

                      NOW
      THEREFORE in consideration of the foregoing and the mutual
      agreements contained herein (the receipt and adequacy of which are
      acknowledged), the parties agree as follows:

                       

                      1             
      DISTRIBUTION RIGHTS

                       

                      1.1          
      Rights.

                       

                      ZMC
      grants to Retailer and Retailer accepts the non-exclusive right to market
      and distribute the Products, in the form provided by ZMC, within the
      Territory during the term of this Agreement. Retailer shall not actively
      promote the Products, solicit customer orders or establish distribution
      facilities outside the Territory, without the expressed written consent
      from ZMC. Notwithstanding the foregoing this agreement specifically
      excludes selling to sub- Retailers, re-sellers, or retail retailers in the
      Territory.

                       

                      1.2          
      Rights Reserved to ZMC.

                       

                      Notwithstanding
      the above, ZMC reserves the right to market and sell directly to the
      Federal Government and it's agencies or to Fleet Sale opportunities in
      accordance with the program as outlined in Schedule C, or as amended by
      ZMC from time to time. ZMC may terminate Retailer's rights to any specific
      Product immediately upon written notice for Retailer's failure to meet
      it's obligations as set out in this Agreement. Upon receipt of such
      notice, Retailer shall cease its marketing, selling, distribution, import
      and export of such Products within the time period specified in such
      notice but in any event not more than 90 days.

                       

                      1.3          
      Changes and Improvements

                       

                      ZMC
      shall have the right to discontinue selling any model or line of
      Automobiles, Parts and Accessories without incurring any obligation or
      liability to the Retailer. ZMC shall have the right to make changes in the
      design of or add improvements to any of the Products, at any time, without
      incurring any obligation or liability to the Retailer to make or install
      the same on any Products ordered by the Retailer prior to such change or
      addition.

                       

                      1.4           Management
      and Ownership

                       

                      ZMC is entering into
      this Agreement in reliance on the capabilities of
      the person(s) identified in Schedule "F" hereto
    entitled

                    

                  	 


          

        

      

    

     

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                2.2          
      Changes to Premises

                 

                The
      Retailer shall not move or substantially modify or change the usage of any
      of the facilities which comprise the retailership premises, nor shall the
      Retailer directly or indirectly establish or operate in whole or in part
      any other locations or facilities for the sale or service of the Products
      or the sale of used vehicles, unless in any such case the Retailer has
      established to the satisfaction of ZMC that such move, modification or
      change is in the best interests of the Retailer and ZMC, and ZMC has given
      its prior written consent thereto, such consent not to be unreasonably
      withheld .

                 

                2.3           Personnel

                 

                The
      Retailer shall employ such numbers and classifications of properly trained
      and competent sales and service personnel of good character as will enable
      the Retailer to fulfill all of its obligations hereunder in a timely and
      effective manner.

                 

                2.4           Insurance

                 

                The Retailer shall at its own
      expense maintain a comprehensive general liability insurance
      policy or policies against all types of risks and liability protecting the
      Retailer and ZMC and their respective officers and employees against
      any loss, liability or expense due to claims resulting from or arising
      out of personal injury, death or property damage or otherwise
      arising out of or occurring in connection with the retailership.
      The Retailer shall keep the Retailership premises and the
      Products in the Retailer's possession insured, for full
      replacement value, against loss or damage. Such policy or policies
      shall be with such insurers and in such amounts as is customary in
      the trade. Further, such policy or policies shall provide that the
      insurer will give ZMC at least thirty (30) days' written notice prior
      to any material alteration, cancellation or termination for
      any cause. The Retailer shall upon request provide ZMC with evidence
      satisfactory to ZMC of compliance with the foregoing
      terms and conditions. Notwithstanding the foregoing,
      ZMC shall not be responsible for providing insurance of any
      description.

                 

                2.5          
      Reporting.

                 

                Retailer
      shall submit to ZMC the following regular reports in a format from time to
      time specified by ZMC:

                 

                (a)           
      end-of-month
      inventory report by Product and Retailer stocking location;

                 

                
                  (b)           
      monthly
      sales-out data by customer and by Product

                

                 

                
                  (c)           
      upon
      execution of this Agreement and within ten (10) days from the end of each
      calendar month thereafter, Retailer will provide ZMC with a written
      forecast setting forth Retailer's anticipated monthly needs for
      the delivery of Products during the four (4) calendar months period
      including current month beginning immediately after the month in which the
      forecast is provided; and

                

                 

                
                  (d)           
      annual
      marketing plan for the sale ZMC Products within the Territory, updated
      quarterly or as otherwise requested by ZMC.

                

                 

                2.7          
      Stocking Levels.

                 

                Retailer
      agrees to maintain a reasonable amount of inventory of each Product in
      each stocking location and at minimum shall at all times have a minimum of
      four ZENN vehicles in stock with at least one ZENN vehicle on display at
      its Retailership for customer demonstration purposes.

                 

                2.8          
      No Modifications of Products.

              	 	
                Retailer
      shall immediately report to ZMC any technical problems in the Products
      discovered by or reported to Retailer. Retailer shall not make or
      authorize any third party to make any alterations or modifications to the
      Products except as authorized in writing by ZMC or as provided for in the
      ZMC Warranty.

                 

                3              
      RESPONSIBILITIES OF ZMC

                 

                3.1           
      Product Training.

                 

                ZMC
      may offer initial or periodic training, and other promotional activities
      at Retailer's site. All activities are subject to mutual agreement and
      each party shall bear its own costs relating to such
training.

                 

                3.2          
      General Promotional Material.

                 

                ZMC
      shall make available to the Retailer English language literature and price
      lists. All Retailer-generated materials about the Products for mailing
      and/or publication must receive prior approval from ZMC. ZMC reserves the
      right to limit any promotional and/or advertising activities which are in
      its opinion detrimental to ZMC. Retailer shall not use any ZMC trade name
      or mark on any service or product other than the Products.

                 

                3.3           
      Co-Op Advertising Funds

                 

                ZMC
      may from time to time offer a co-op advertising and marketing program, the
      details for which will be communicated in a Retailer
Bulletin.

                 

                3.4           
      Compliance.

                 

                ZMC
      will take all reasonable steps to ensure that the Products are in
      full compliance with all applicable standards, laws or regulations as
      required for sale of Products by Retailer. Retailer shall promptly provide
      ZMC with any and all information useful or necessary to such regulatory
      compliance in the Territory.

                 

                3.5          
      Recalls.

                 

                ZMC
      shall have at all times the right to recall from the end users of the
      products, any defective Products and to replace same at ZMC's
      expense.

                 

                4              
      CONFIDENTIAL INFORMATION

                 

                4.1          
      Confidential Information of ZMC.

                 

                Retailer
      agrees and acknowledges that certain information provided by ZMC pursuant
      to this Agreement, is or encompasses trade secrets or confidential
      information of ZMC or its suppliers ("Confidential Information"). Retailer
      shall not make the Confidential Information available in any form to any
      person other than Retailer's employees whose job performance requires such
      access. Retailer shall take appropriate steps to protect the
      confidentiality of the Confidential Information to ensure that any person
      permitted access to the Confidential Information has signed a written
      non-disclosure agreement with Retailer and does not provide the
      Confidential Information to others. Retailer shall not be liable for the
      disclosure of Confidential Information which: (a) is known to Retailer
      lawfully by its own efforts prior to being received from ZMC; (b) is or
      becomes publicly known through no wrongful act of Retailer; (c) is
      obtained by Retailer lawfully from a third party not having an obligation
      to maintain confidentiality and not being in wrongful possession of the
      confidential information; (d) is independently developed by Retailer
      without breach of this Agreement; (e) is disclosed under operation of law;
      or (f) is disclosed by Retailer with ZMC's prior written
      approval.

              


      

    

     

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                  5             
      ORDERING OF PRODUCTS

                   

                  5.1          
      Purchase Orders.

                   

                  Retailer
      agrees to issue purchase orders, which may be issued against blanket
      purchase orders (individually an "Order"
      and collectively, "Orders"),
      for all Products in accordance with the terms of this Agreement.
      Each Order shall be in the form of a written or electronic communication
      and shall contain the following information:

                   

                  
                    (a)            a
      description of the Products required;

                  

                   

                  (b)
                 the
      quantity of Products required;

                   

                  (c)          
       the requested delivery date;

                   

                  (d)      
           the location to which the Products are to be
      shipped;

                   

                  
                    (e)           
      the
      location to which invoices shall be sent for payment;
      and

                  

                   

                  
                    (f)             transportation
      instructions.

                  

                   

                  The
      Retailer shall from time to time notify ZMC in writing of the names of
      those individuals who are authorized to order Products on behalf of the
      Retailer. In the event of a conflict between the Order and the terms and
      conditions contained in this Agreement and the Schedules hereto, the terms
      and conditions contained in this Agreement and the Schedules hereto shall
      supersede the Order. Orders for Products are at all times subject to
      acceptance by ZMC, which may be in whole or in part. All orders submitted
      by the Retailer shall be irrevocable by the Retailer unless and until they
      are rejected by ZMC, provided however that in the event of a partial
      acceptance by ZMC the Retailer may withdraw the part of the order not
      accepted.

                   

                  5.2          
      Acceptance of Purchase Orders.

                   

                  No
      modification to any Order, this Agreement or the attachments hereto and no
      inconsistent or additional terms contained in any quotation, purchase
      order, acknowledgment or invoice, shall be valid without the prior written
      consent of an authorized representative of ZMC and Retailer as set forth
      herein and as may be amended from time to time. ZMC's failure to object to
      any provisions contained in any communication from Retailer shall not be
      deemed a waiver of the provisions of this Agreement and the attachments
      hereto. The provisions of this Agreement supersede all prior oral or
      written quotations, communications, agreements and understandings of the
      parties with respect to the subject matter of this Agreement. These terms
      and conditions shall be applicable whether or not they are attached to or
      enclosed with the Products to be sold hereunder.

                   

                  5.2          
      Delivery and Lead-time.

                   

                  All
      Products shall be delivered by ZMC FOB Montreal, Canada unless otherwise
      agreed to in writing by ZMC. Estimated lead-time for delivery of standard
      ZMC Products and regular inventory spare parts covered by this Agreement
      will be ninety (90) days after receipt of an Order acceptable to
      ZMC.

                   

                  5.3          
      Rescheduling/Cancellation.

                   

                  Once
      an Order has been accepted by ZMC by way of a purchase order
      acknowledgement, rescheduling and/or changes to any Orders are to be
      submitted to ZMC in writing and are subject to the following terms.
      Specifically, any Order:

                   

                  
                    (a)            providing
      for delivery or currently scheduled to be delivered within thirty (30)
      days may not be canceled, rescheduled and/or changed;
      and

                  

                   

                  
                    (b)           
      providing
      for delivery in excess of thirty-one (31) days,

                  

                	 	
                  may
      not be cancelled or changed, but may have its delivery date rescheduled up
      to thirty (30) days later at no charge to Retailer provided Retailer may
      only reschedule such Order once. 

                   

                  Any
      exceptions to these requirements must be reviewed and approved in writing
      by ZMC.

                   

                  5.4          
      Title and Liability.

                   

                  Title
      to all Products shall pass to the Retailer from ZMC only upon payment in
      full to ZMC for the Products. Until ZMC has received payment in full, all
      right, title and a purchase money security interest in and to the Products
      and a purchase money security interest in all proceeds thereof shall
      remain with ZMC. The Retailer agrees to execute any and all conditional
      sales contracts, security agreements, documents and notices as may be
      required to preserve, protect and perfect the retention of title and
      security interests of ZMC in the Products and the proceeds thereof under
      all applicable laws

                   

                  5.5           
      Package and Shipment.

                   

                  All
      Products shall be packaged and packed in accordance with ZMC's normal
      practices. All
      shipping and delivery dates are estimates only. ZMC is not
      responsible for any late, lost or misdirected shipments and will not be
      liable for any damage, loss or expense incurred by Retailer for a failure
      to meet specified shipment dates or a failure to provide the correct
      quantity of Products ordered. ZMC will use commercially reasonable efforts
      to deliver orders on the date identified on the acknowledgement. If ZMC is
      unable to deliver on the date indicated, ZMC will notify Retailer and
      provide a new delivery date.

                   

                  5.6           
      Inspection.

                   

                  All
      Products purchased hereunder are subject to Retailer's inspection and
      acceptance provided that if Retailer has not rejected the Products in
      writing within two (2) business days of receipt, Retailer shall be deemed
      to have accepted such Products. Retailer may not reject partial shipments
      on the basis that they are not a full order. No Product shall be returned
      to ZMC without ZMC's written consent and a Return Material Authorization
      ("RMA") number, which number will be issued by ZMC in accordance with its
      RMA procedures. The RMA number must accompany any returned Products. ZMC
      reserves the right to refuse any Products returned without proper
      authorization or without proper identification of RMA number at ZMC's
      point of entry.

                   

                  6              
      PRICE, PAYMENT,
      TAXES AND DUTIES

                   

                  6.1          
      Wholesale Prices.

                   

                  The
      price for each Product shall be as set out in Schedule "B", as amended in
      writing by ZMC from time-to-time. ZMC shall in its sole discretion specify
      the effective date of the Prices if and when changed. All pricing and
      payments are listed in United States Dollars and will be calculated on an
      FOB ZMC production facilities basis. Payment for Products is due in
      accordance with Schedule
"B".

                


        

      

    

     

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          	6.2          
      Suggested Retail Price 

                   

                  ZMC
      will issue from time to time "Retailer Price Bulletins" which will
      set forth ZMC's "Suggested Retail Price" for the Products. The Retailer is
      under no obligation to accept such Suggested Retail Price and may sell for
      less if it chooses. If it chooses to sell at prices less than those
      suggested, the Retailer will not suffer in any way in its business
      relations with ZMC or any other person over whom ZMC has control or
      influence. However, the Retailer shall not represent, either directly or
      indirectly, to any person that the suggested retail price for any Product
      is greater than the Suggested Retail Price.

                   

                  6.3          
      Sales and Service Records and Reports

                   

                  The
      Retailer shall keep complete, accurate and current records regarding the
      sale and servicing of Products, including without limitation records in
      respect of warranty work and recalls, and shall furnish to ZMC such
      reports and information based on those records as ZMC may reasonably
      request. The Retailer shall prepare, keep current and retain records, in
      accordance with such policies and procedures designated by ZMC, in support
      of all requests to ZMC for reimbursement or credit.

                   

                  6.4           Financial
      Records and Reports

                   

                  The
      Retailer shall furnish to ZMC quarterly, within 45 days of the end of each
      calendar quarter, complete and accurate financial and operating statements
      covering the preceding quarter and calendar year-to-date operations and
      showing the true and accurate condition of the Retailership and the
      Retailer.

                   

                  6.5          
      Inspection of Records

                   

                  The
      Retailer shall permit ZMC or its representatives, at any time during
      normal business hours and without prior notice, to examine, audit,
      reproduce and take copies of all reports, accounts and records pertaining
      to the sale, inventorying and servicing of Products including, but not
      limited to, records in support of claims for reimbursement or credit from
      ZMC. ZMC shall provide the Retailer with particulars of any documents
      which may be copied and taken in the course of any such examination. ZMC
      may, with the prior approval of the Retailer, which approval shall not be
      unreasonably withheld, interview the Retailer's employees with respect to
      the matters described in this section.

                   

                  6.6          
      Taxes and Duties.

                   

                  The
      price for Products excludes, and Retailer shall be liable for, all
      applicable Federal, State, Provincial, and local sales or other taxes,
      including without limitation, VAT, consumption and use taxes. Retailer
      shall be liable for any import and/or excise taxes, customs and duties
      incurred for licenses for clearance or otherwise required at point of
      entry and destination in accordance with FOB, Montreal, Canada. Retailer
      shall be responsible at its own expense to obtain any and all required
      permits, approvals, licenses and quotas as applicable for the import of
      any of the Products to its home country or any other country or
      region.

                   

                  7             
      SERVICE PROVISIONS

                   

                  7.1          
      Service Personnel.

                   

                  The
      Retailer shall establish and maintain a complete service and parts
      organization, including sufficient properly trained and competent service
      and parts personnel to adequately fulfill the service obligations to be
      performed by the Retailer under this

                	 	Agreement.
      

                   

                  7.2          
      Provisions of Service.

                   

                  The Retailer shall provide
      prompt, efficient and courteous service at reasonable cost, and warranty
      service at no cost, to an owner or lessee of an Automobile,
      regardless of origin of purchase or lease, in accordance with the provisions
      of applicable Retailer Bulletins and shall perform such service in
      such a manner as to secure and maintain the goodwill of the Retailer, ZMC
      and the Products and to achieve the highest possible
      level of customer satisfaction.

                   

                  7.3          
      Warranty and Related Work.

                   

                  The
      Retailer shall install any replacement of parts, make certifications or
      verifications and perform maintenance, service and other matters that may
      be required under the terms of the ZMC Warranty or in order to effect
      corrections or recalls. ZMC shall credit the Retailer's account for such
      warranty service, corrections or recalls which the Retailer performs in
      accordance with the Retailer Bulletins in effect at the time such service
      is performed. The Retailer shall provide all warranty service consistent
      with the ZMC Warranty applicable to each Product.

                   

                  8              
      WARRANTY AND INDEMNIFICATION

                   

                  8.1           
      Representations and Warranties.

                   

                  ZMC
      represents and warrants that the Products shall be free from defects in
      materials or workmanship under normal use and service as defined in the
      then-current ZENN Warranty document (refer to Schedule D). Third party
      components used within the Products may be warranted by the third party as
      specified in the documentation accompanying the third party
      products.

                   

                  8.2           
      ZMC Warranty.

                   

                  The
      Retailer shall deliver to each purchaser of a new Product the ZMC Warranty
      therefore endorsed with the particulars of sale and shall notify ZMC of
      the sale of each new Product, or used Product if still under warranty, in
      such manner as prescribed by ZMC in accordance with policies and
      procedures established in the Retailer Bulletins. If the Retailer installs
      on a Product any equipment, accessory or part other than a new Part or
      Accessory, or sells any Automobile which has been modified, or sells any
      non­ZMC service contract in conjunction with the sale of a Product,
      the Retailer shall disclose this fact to the end user and shall advise the
      end user that the modification, equipment, accessory or part is not
      included in the ZMC Warranty or any other warranty furnished by ZMC or, in
      the case of a service contract, the coverage is not provided by ZMC. The
      Retailer shall include such disclosure on all copies of the purchase order
      and on the end user's bill.

                   

                  8.3           
      Disclaimer.

                   

                  EXCEPT
      AS EXPRESSLY STATED ABOVE IN SECTION 8.2, ALL WARRANTIES ARE DISCLAIMED,
      INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY,
      ACCURACY, CONDITION, OWNERSHIP, FITNESS FOR A PARTICULAR PURPOSE, AND/OR
      NON- INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY
RIGHTS.

                   

                  8.4          
      Damages Limitation.

                   

                  INDEPENDENT
      OF ANY OTHER LIMITATION CONTAINED HEREIN, IN NO EVENT SHALL ZMC BE LIABLE
      FOR SPECIAL, INCIDENTAL, INDIRECT, OR CONSEQUENTIAL DAMAGES OF ANY KIND,
      OR LOSS OF PROFIT OR REVENUE RELATED TO THE SUBJECT MATTER OF THIS
      AGREEMENT, EVEN IF

                


        

      

    

     

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                  INFORMED
      OF THE POSSIBILITY THEREOF IN ADVANCE. ZMC WILL ALSO NOT BE LIABLE FOR ANY
      DAMAGES AS A RESULT OF PERSONAL INJURY OR PROPERTY DAMAGE EXCEPT AS MAY BE
      PROVIDED FOR HEREIN. THESE LIMITATIONS APPLY TO ALL CAUSES OF ACTION IN
      THE AGGREGATE, INCLUDING WITHOUT LIMITATION BREACH OF CONTRACT, BREACH OF
      WARRANTY, NEGLIGENCE, STRICT LIABILITY, FRAUD, MISREPRESENTATION AND OTHER
      TORTS. RETAILER WILL BE SOLELY RESPONSIBLE FOR ALL REPRESENTA-TIONS OR
      OMISSIONS RETAILER MAKES TO ITS CUSTOMERS OR END USERS. IN NO EVENT WILL
      ZMC'S OR ITS AFFILIATES' OR SUPPLIERS' AGGREGATE LIABILITY UNDER THIS
      AGREEMENT, REGARDLESS OF THE FORM OF CLAIM OR ACTION, EXCEED A SUM EQUAL
      TO THE AMOUNTS PAID BY RETAILER TO ZMC IN THE ONE (1) YEAR PERIOD
      IMMEDIATELY PRECEDING THE DATE ON WHICH A WRITTEN DEMAND FOR DAMAGES IS
      MADE.

                   

                  8.5          
      Indemnity to ZMC.

                   

                  Retailer
      will indemnify, defend and hold ZMC, including ZMC's partners, officers,
      directors, agents, employees, subsidiaries, affiliates, parents,
      successors and assigns, harmless from any claim, demand, cause of action,
      debt or liability (including reasonable attorneys fees, expenses and court
      costs) arising from: (a) any third party claim related to or that arises
      in connection with Retailer's use and/or sale of the Products, including
      without limitation, any claims relating to the infringement of third party
      intellectual property rights, except to the extent any such claim is based
      solely upon the Products in their unmodified form as provided by ZMC; (b)
      Retailer's modifications of and/or additions to any ZMC Products; (c)
      Retailer's breach of this Agreement, (d) omissions, misrepresentations, or
      negligence by Retailer or its representatives, and (e) sale of Products by
      Retailer to a third party to the extent such claim is based on: (i)
      Retailer's modifications of and/or additions to any Products, misuse or
      abuse of the Products, negligence or breach of any provision in this
      Agreement; (ii) Retailer's failure to abide by all applicable laws, rules,
      regulations and orders that affect the Products; (iii) Retailer's
      omission, misrepresentation, or negligence, or (iv) Retailer's or its
      end-users' actions causing harm to any person or property.

                   

                  9             
      TERM AND TERMINATION

                   

                  9.1           Term.

                   

                  The
      initial term of this Agreement shall commence on the Effective Date and
      shall continue for a period of three (3) years (the "Term").
      Thereafter, unless otherwise terminated by either party by
      providing at least one hundred and eighty (180) days prior written notice,
      the Term shall automatically renew for additional one (1) year
      periods.

                   

                  9.2           Termination.

                   

                  This
      Agreement will terminate:

                   

                  
                    (a)         On
      the thirtieth (30) day after either party gives the other written notice
      of a material breach by the other of any term or condition of this
      Agreement, unless the breach is
      cured before that day.

                  

                   

                  
                    (b)        
      When
      either party, in its discretion, gives the other written notice of
      termination after the other has been the subject of any voluntary or
      involuntary proceeding relating to bankruptcy, insolvency,
      liquidation,
      receivership,
      composition
      of or assignment for the benefit of creditors.

                     

                    9.3          
      Effect
      of Termination. 

                  

                   

                  Upon termination of
      this Agreement:

                	 	
                  (a)           
      All rights granted herein shall immediately terminate and no interest
      whatsoever in any of such rights shall remain with Retailer except as may
      be required to fulfill warranty or support obligations to Retailer's
      customers; 

                   

                  (c)         
      All
      Payment, delivery, and confidentiality obligations arising prior to
      termination will remain in force. In the event of termination of this
      Agreement is due to Retailer's material breach the due date for all
      invoices for Products shall automatically be accelerated so that they
      shall immediately become due and payable on the effective date of
      termination, even if longer terms had been provided previously;
      and

                   

                  
                    (d)           
      Neither
      party will be liable for damages of any kind as a result of exercising its
      right to terminate this Agreement.

                  

                   

                  9.4          
      Termination Other Than For Retailer's Material Breach.

                   

                  Notwithstanding
      anything to the contrary contained in Section 9.3, where termination of
      this Agreement occurs other than as a result of Retailer's material
      breach, Retailer shall be permitted, after termination of this Agreement
      to continue distributing the Products from its inventory
only.

                   

                  10            
      PROPRIETARY RIGHTS

                   

                  10.1        
      Trademark License.

                   

                  ZMC
      hereby grants Retailer a non-exclusive, revocable (upon termination
      hereof), non-transferable, non-assignable, limited license to use the
      "ZMC" name and ZMC's product names solely for the purpose of accurately
      identifying the ZMC-branded Products it markets and sells that are
      purchased pursuant to the terms of this Agreement. All goodwill generated
      as a result of Retailer's use of the ZMC name and ZMC product names is
      solely for the benefit of ZMC. Retailer agrees to change or correct, at
      its own expense, any material or activity that ZMC decides is inaccurate,
      objectionable or misleading or a misuse of ZMC's name, trademarks, service
      marks, or ZMC's logos or copyrighted works. Failure to forthwith correct
      any changes required by ZMC may result in a termination of the license
      contained in this section, in ZMC's sole discretion. All ZMC marks shall
      be used in accordance 'with ZMC's communications guidelines in effect from
      time to time. Retailer is prohibited from: (a) implying that Retailer and
      ZMC are partners or creating the impression that ZMC is affiliated with
      Retailer; (b) registering or using any domain name or business name
      containing or confusingly similar to any name or mark of ZMC's; and (c)
      not clearly and prominently identifying itself in all offers and
      advertising, marketing and promotional materials relating to ZMC Products
      sold under this Agreement.

                   

                  10.2        
      ZMC Proprietary Rights.

                   

                  Retailer
      acknowledges and agrees that ZMC (and/or its licensors) will retain all
      Proprietary Rights (as defined below) in the Products, Trademarks and any
      documentation related to any of the foregoing (collectively the "ZMC
      Property"). "Proprietary Rights" means all right, title and interest to
      the intellectual property contained in the ZMC Property including but not
      limited to any and all patent rights, patent applications, rights to apply
      for patents, copyrights, copyright registrations, trade secrets,
      trademarks, service marks, trademark and service mark registrations and
      all related goodwill. Retailer acknowledges and agrees that the purchase
      of any Products does not grant or convey Retailer any right or license in
      any of the ZMC Property other than as expressly provided for in this
      Agreement.

                


        

      

    

     

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                      10.3        
      Proprietary Rights Notices.

                       

                      Retailer
      shall not remove, alter, modify or obscure any ZMC trademark, logo or
      similar mark or any ZMC Proprietary Rights notices (including, without
      limitation, patent registration numbers and trademark notices) on or in
      the ZMC Property.

                       

                      10.4        
      No Challenge to ZMC Proprietary Rights.

                       

                      During
      the term of this Agreement and after its expiration or termination,
      Retailer shall not, directly or indirectly: (i) dispute or contest, for
      any reason whatsoever, ZMC's ownership of any Proprietary Rights embodied
      in, related to or derivable from the ZMC Property, or the validity or
      enforceability of any such Proprietary Rights; (ii) oppose or interfere
      with any application for registration of any Proprietary Rights embodied
      in, related to or derivable from the ZMC Property; (iii) interfere with
      the manufacture, use or sale of the Products or any future version
      thereof, by ZMC or any of its licensees, successors or assigns; or (iv)
      counsel, procure or assist anyone else to do any of the
      foregoing.

                       

                      11           
      MISCELLANEOUS

                       

                      11.1        
      Relationship of Parties.

                       

                      Other
      than as provided herein, this Agreement does not create any exclusive
      arrangement between the parties, and either party hereto may meet,
      exchange information, enter into agreements and conduct business
      relationships of any kind with third parties, to the exclusion of the
      other party. Subject to the terms and conditions of this Agreement
      (including without limitation, the confidentiality obligations described
      in Section 4.1) and except as otherwise agreed to in writing by the
      parties, discussion and/or communications between the parties will not
      serve to impair the right of either party to develop, make, use, procure,
      and/or market products or services now or in the future that may be
      competitive with those offered by the other, nor to develop and provide
      products to competitors of the other party.

                       

                      11.2         Force
      Majeure.

                       

                      If
      the performance of this Agreement or any obligation under it (except
      payment of monies due) is prevented, restricted or interfered with by
      reason of acts of God, acts of government, or any other cause not within
      the control of either party, the party so affected shall be excused from
      such performance, but only for so long as and to the extent that such a
      force prevents, restricts or interferes with that party's performance. The
      party affected by the other party's delay or inability to perform may
      elect to suspend this Agreement for the duration of the force majeure
      condition and (i) at its option buy, sell, obtain or furnish elsewhere
      material to be bought, sold, obtained or furnished under this Agreement
      and (ii) once the force majeure condition ceases, resume performance under
      this Agreement. When the delay or nonperformance continues for a period of
      a least thirty (30) days, either party may terminate this Agreement or any
      part of it relating to Products not already shipped.

                       

                      11.3        
      Assignment.

                       

                      Retailer
      may not assign its rights or obligations under this Agreement, without the
      prior written consent of ZMC, which consent shall not be unreasonably
      withheld.

                       

                      11.4        
      Notices.

                       

                      All
      notices required to be given under this Agreement and any communication
      sent with respect to this Agreement shall be given in
      writing and shall be deemed received by the party to whom
      the

                    	 	
                      notice
      or correspondence is sent:

                       

                      (a)          
      one
      Business day after the notice or communication is sent via reliable
      overnight commercial courier (charges prepaid), or

                       

                      (b)            on
      the date the notice or communication is personally delivered to the other
      party, at the addresses first written above.
      
                        
                        

                         

                        11.5         
      Press Release.

                         

                        Retailer
      shall not issue a press release relating to this Agreement or to the
      subsequent addition of any Products hereto without ZMC's written
      consent.

                         

                        11.6         
      Severability.

                         

                        Whenever
      possible, each provision of this Agreement will be interpreted in such
      manner as to be effective and valid under applicable law, but if any
      provision of this Agreement is held to be prohibited by or invalid under
      applicable law, the parties will negotiate in good faith to restate such
      provision to reflect the original intentions of the parties as nearly as
      possible in accordance with applicable law and the remaining provisions of
      this Agreement shall be enforced as if this Agreement was entered into
      with the restated provision.

                         

                        11.7          Applicable
      Law.

                         

                        This
      Agreement shall be governed by and enforced in accordance with the laws of
      the Canadian Province of Ontario without reference to its conflict of laws
      principles. The parties waive all rights they may have to a trial by jury.
      The rights and obligations under this Agreement shall not be governed by
      the United Nations Convention on Contracts for the International Sale of
      Goods, the application of which is expressly excluded.

                         

                        11.8         
      Dispute Resolution.

                         

                        All
      disputes arising out of or in connection with this Agreement or the breach
      thereof, including any questions regarding its existence, validity or
      termination shall be resolved by arbitration before a single arbitrator
      with knowledge and experience in the field of electric and low speed
      vehicle technology pursuant to the International Arbitration Rules of the
      American Arbitration Association and shall be held in Toronto, Canada.
      Notwithstanding the foregoing, each party shall be entitled to seek
      injunctive relief from any court of competent jurisdiction with respect to
      protection of its intellectual property rights. The governing law shall be
      the law of Ontario, Canada.

                         

                        11.9          Entire
      Agreement.

                         

                        This
      Agreement and all Attachments hereto constitute the final written
      expression of all terms of the Agreement relating to the transactions
      described herein. This Agreement supersedes all previous communications,
      representations, agreements, promises or statements, either oral or
      written, with respect to such transactions. No addition to or modification
      of any provision of this Agreement will be binding unless made in writing
      and signed by the parties hereto.

                         

                        11.10        
      Survival.

                         

                        Any
      provision of this Agreement which by its use or context is intended to
      survive the termination of this Agreement shall so survive, including,
      without limitation, Sections 4, 0, 9.3, and 11 shall bind the parties and
      their legal representatives, successors, heirs and
      assigns.

                      

                    


            

          

        

      

       

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                11.11     
      Export Restrictions and Statement of Assurance.

                 

                Products
      obtained under this Agreement are subject to Canadian, U.S. or other
      export control laws, including the U.S. Export Administration Regulations,
      as well as end-user, end-use and destination restrictions issued by the
      U.S. and other governments. Retailer assures that it will comply with all
      applicable export control laws at all times, including, when it exports or
      re-exports controlled products or technical data obtained from ZMC or any
      products produced directly from the controlled products or technical
      data.

                 

                11.12      Language.

                 

                The
      original of this Agreement has been written in English and Retailer waives
      any right it may have under the laws of its territory to have this
      Agreement written in any other language.

              	 	 


      

    

     

    

    

    ZENN
MOTOR COMPANY

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	By:	
                                              /s/  
      Dennis Hancock

                                            	
                                               

                                            	 	 
	 	
                                              (I
      have authority to bind the corporation)

                                            	 	 	 
	 	
                                               

                                            	 	 	 
	Name:	
                                              Dennis
      Hancock

                                            	 	 	 
	 	
                                              (Print
      or Type)

                                            	 	 	 
	 	 	 	 	 
	Title:	
                                              Vice
      President, Sales & Marketing

                                            	 	 	 
	 	      
                                              (Print
      or Type)

                                            	 	 	 
	 	 	 	 	 
	Date:	
                                              September
      10th, 2008

                                            	 	 	 
	 	
                                              (Print
      or Type)

                                            	 	 	 


                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

     

     

    
      	By:	
              /s/  
      Dale Long

            	
               

            	 	 
	 	
              (I
      have authority to bind the corporation)

            	 	 	 
	 	
               

            	 	 	 
	Name:	
              Dale
      Long

            	 	 	 
	 	
              (Print
      or Type)

            	 	 	 
	 	 	 	 	 
	Title:	
              CEO/PRES

            	 	 	 
	 	      
              (Print
      or Type)

            	 	 	 
	 	 	 	 	 
	Date:	
              9/10/08

            	 	 	 
	 	
              (Print
      or Type)

            	 	 	 


    

     

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