ZAP and Fusion Capital Mutually Terminate Financing Agreement

ZAP and Fusion Capital Mutually Terminate Financing Agreement

SANTA ROSA, Calif. (February 25, 2005) - Automotive technology pioneer ZAP (OTC Bulletin Board: ZAAP) today announced that it has mutually agreed with Fusion Capital Fund II, LLC to terminate their existing $24 million common stock purchase agreement.

"We entered into this agreement with Fusion in the middle of 2004," said Steve Schneider, ZAP's CEO. "In a short amount of time a lot has changed at ZAP. We would like to take this opportunity to thank Fusion for their help and support. The Company is in negotiations for debt financing that would be better for shareholders long-term without the dilution inherent in any equity transaction. We will continue to dialogue with Fusion and evaluate future financing opportunities with them."

Under the agreement, Fusion had purchased $500,000 of ZAP common stock and committed to purchase up to an additional $24 million of common stock. In connection with the termination, the company repurchased the $500,000 of common stock originally purchased by Fusion Capital. A more detailed description of this mutual termination is set forth in ZAP's report on Form 8-K, recently filed with the SEC.