ZAP will use a portion of the funding to pursue longer-term contract production and assembly commitments, and to accelerate deliveries of trucks and vans to fill current fleet and government orders.

Leveraging its expertise in the design and manufacture of electric vehicles, as well as its fifteen years of experience in the distribution and sale of 100% electric vehicles, ZAP also plans to further broaden and accelerate its development of power train technology that improves overall performance of its vehicles while achieving cost reductions.

In making the announcement, ZAP CEO Steven Schneider commented: "This is a critical juncture for ZAP as we now have the means and resources to begin addressing the opportunities at hand on a global basis and to fully realize the leadership position possible in the electric vehicle marketplace."

Financing includes a private placement of twenty million shares of common stock for aggregate proceeds of $5 million and a secured loan facility of up to $10 million that will be advanced to ZAP provided certain conditions are met. In connection with the financing, the investor also was issued warrants exercisable for up to sixteen million shares of common stock at $0.50 per share For a more detailed description of the financing agreement, see Zap's Current Report on Form 8-K filed on August 10, 2009.

Dr. Priscilla Lu, General Partner of the investor and founder of Better World, commented: "We made this investment in ZAP based on the belief that the new focus and resources now available to the company will allow it to become a market leader, fully realizing its potential and leveraging its long history and experience. We believe ZAP's experienced management team has the in-depth, practical know-how in the electric vehicle industry that will provide the foundation to succeed in markets and partnerships in Europe and China."

The proceeds of this financing also will enable ZAP to expand its vehicle distribution network into the European Union (EU) where recent government incentives supporting the adoption of electric vehicles have increased demand for practical models at affordable prices. In addition to targeting market opportunities in the EU, ZAP intends to pursue automotive opportunities in China.