Imhotep

Thank you for your interest in ZENN Motor Company and your request for additional information regarding ZENN’s energy storage partner, EEStor Inc.

We are asked about EEStor’s technology, their progress and their relationship to ZENN Motor Company on a daily basis. Please find below a summary of ALL PUBLIC INFORMATION that we can share at this time.

When ZENN Motor Company was founded in 2000, it was with the ultimate goal of addressing the escalating climate crisis by bringing electric cars to the masses. EEStor’s EESU is the tool that will enable the realization of that goal. It is an ultra-capacitor storage device that acts like a ‘super’ battery for transportation and other applications. There is an enormous amount of interest regarding this technology, especially given that Lockheed Martin has secured an exclusive technology agreement to use EEStor’s EESU in military and homeland security applications and Morton L. Topfer, a former Vice Chairman of Dell Computer Corporation has joined EEStor’s Board of Directors. Kleiner Perkins Caufield & Byers, a leading venture capital firm also took a financial interest in EEStor, and Fortune Small Business Magazine has identified EEStor and ZENN Motor Company as one of “The Disruptors” to watch in the coming year.

Subject to satisfying local homologation requirements, these new vehicles would be distributed to major markets globally. The Company estimates that global annual sales unit for this size of new car to be in excess of 30 million. Third party discussions have been initiated to assess possible manufacturing and distribution scenarios.

EEStor Background
EEStor was founded in 2001 by Richard D. Weir and Carl Nelson, former senior managers in disk-storage technology at IBM and Xerox. The Company maintains a low profile, but others in the automotive and CleanTech communities are calling their storage technology ‘game changing’. Such a breakthrough has the potential to transform the energy sector and the automobile industry in particular.

The following table provides a comparison of specific features of current power storage technologies with EEStor’s claims relating to the EESU :

Table 1 – Parameters of each Technology to Store 52.2 kWh of Electrical Energy

Ceramic EESU

• Weight = 300 lbs
• Volume = 4943 (cubic inch)
• Discharge rate = 0.02% / 30 days
• EV Charging time (full) - 100% charge = 3-6 min
• Life reduced with deep cycle use = None
• Hazardous Materials = None
• Temperature effect on energy storage = Negligible

NiMH

• Weight = 1716 lbs
• Volume = 17,881 (sq inch)
• Discharge rate = 5% / 30 days
• EV Charging time (full) - 100% charge = >3.0 hr
• Life reduced with deep cycle use = High
• Hazardous Materials = Yes
• Temperature effect on energy storage = High

LA (Gel)

• Weight = 3646 lbs
• Volume = 43,045 (sq inch)
• Discharge rate = 1% / 30 days
• EV Charging time (full) - 100% charge = 3-15 hr
• Life reduced with deep cycle use = Very High
• Hazardous Materials = Yes
• Temperature effect on energy storage = Very High

Lithium-ion

• Weight = 752 lbs
• Volume = 5697 (sq inch)
• Discharge rate = 1% / 30 days
• EV Charging time (full) - 100% charge = >3.0 hr
• Life reduced with deep cycle use = High
• Hazardous Materials = Yes
• Temperature effect on energy storage = High

(Source : EEStor Inc.).If market demands require larger or smaller models, these, too, can be produced.

• All-electric 4-wheeled personal transportation uses for vehicles with a curb weight up to 1,400 kilograms, net of the battery weight, and
• For golf carts and similar-styled utility vehicles, and
• The aftermarket conversion of any internal combustion passenger vehicle to electric drive

The EEStor Technology Agreement also provides ZMC with non-exclusive, worldwide rights to manufacture higher horsepower and heavier vehicles. As provided for in the Agreement, ZMC’s rights to the technology are subject to making in aggregate, milestone payments of US$2,500,000.

To date, ZMC has made three milestone payments totaling US$1,300,000 :

• US$100,000 initial investment made in October 2005
• US$650,000 upon financing made in January 2006
• US$550,000 investment based on EEStor reaching the purity testing/production capacity milestone made in February 2007. This milestone included third-party verification of EEStor producing barium nitrate power meeting specified levels of purity.

The balance of amounts payable under the Agreement total US$1,200,000 :

• US$700,000 is payable upon third party verification of permittivity testing.
• US$500,000 is payable upon the receipt of the EESU by ZMC

If the Company elects to maximize its additional investment and subject to the investment decisions of the other EEStor investors, the Company’s total minimum and maximum equity interest in EEStor would be in the range of approximately 6.2% to 10.5%.

While the Company has specific technology rights under the Agreement noted above, the investment was made to provide ZENN shareholders with participation in the potential upside of other applications of EEStor’s technology and is unrelated to the terms of the Technology Agreement.

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Thank you again for your interest in ZENN Motor Company and EEStor. We hope the information provided above has answered your questions. Please note replies to this email are directed to an unattended inbox.

Best Regards,

ZENN Motor Company