On December 5, 2008, ZAP (the "Company") executed a Settlement Agreement For the termination of the Senior Convertible Note.

The following description is a summary of the material terms and conditions of both the Note and the Settlement Agreement. The summary is not intended to be complete and it is qualified in its entirety by reference to the Settlement Agreement included as Exhibits 10.1:

ZAP issued a Senior Convertible Note on May 8, 2008 for $475,000 plus interest to Al YOUSUF LLC. Interest accrued at the greater of six (6%) per annum or 6 month libor plus two hundred fifty (250) basis points per annum. The note matured on November 8, 2008 with both principle and interest due in cash. The lender had the right to convert all or any part of the outstanding and unpaid principle and interest accrued but unpaid hereon amount of the Note into such number of duly authorized , validly issued, fully paid and non-assessable Conversion Shares as was determined in accordance with the terms of the Senior Convertible note.

Al YOUSUF LLC exercised their right of conversion on December 5, 2008 . The parties agreed to grant 2,140,974 shares of ZAP common stock to AL YOUSUF LLC as full payment for the principle amount of $475,000 plus interest.

(d) Exhibits

Exhibit
Number     Exhibit Title or Description
10.1       Settlement Agreement by ZAP in favor of Al Yousuf LLC, dated
           December 5, 2008