8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):  December 5, 2008

ZAP

(Exact name of Registrant as specified in its charter)

California	001-32534	94-3210624
(State or other jurisdiction of incorporation or organization)	Commission File Number	IRS Employer Identification Number
501 Fourth Street Santa Rosa, CA		95401
(Address of principal executive offices)		(Zip Code)

(707) 525-8658

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ZAP

This Current Report on Form 8-K and other reports filed by the Registrant from time to time with the Securities and Exchange Commission (collectively the “Filings”) contain forward looking statements and information that are based upon beliefs of, and information currently available to, the Registrant’s management, as well as estimates and assumptions made by the Registrant’s management. When used in the Filings the words “anticipate”, “believe”, “estimate”, “expect”, “future”, “intend”, “plan” or the negative of these terms and similar expressions as they relate to the Registrant or the Registrant’s management identify forward looking statements. Such statements reflect the current view of the Registrant with respect to future events and are subject to risks, uncertainties, assumptions and other factors relating to the Registrant’s industry, operations and results of operations and any businesses that may be acquired by the Registrant. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.

Item 1.02 Termination of a  Material Definitive Agreement

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.

Item 9.01.  Financial Statements and Exhibits

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

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ZAP
Date:   December 9, 2008	By:  /s/ Steven M. Schneider
	Steven M. Schneider
	Chief Executive Officer

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EX-10.1

EXHIBIT 10.1

SETTLEMENT  AGREEMENT FOR SENIOR CONVERTIBLE NOTE

This SETTLEMENT (this "Settlement Agreement"), dated December 5, 2008, is entered into by and between ZAP, Inc., a California corporation (the "Company")  and AL YOUSUF LLC (hereafter, jointly and individually referred to as "Releasing Party"). The Company and Releasing Party are sometimes referred to hereafter as a "Party" or collectively as the "Parties".

WITNESSETH:

WHEREAS, the Company and Releasing Party entered into a Securities Purchase Agreement dated May 8, 2008 (the "Note Purchase Agreement"), whereby Releasing Party purchased a 8% Senior Convertible Note (the "8% Senior Convertible Note"). The note has a principle amount of $475,000 plus interest due on November 8, 2008.

WHEREAS, Releasing Party and the Company mutually wish to terminate and cancel, the 8% Senior Convertible Note.

WHEREAS, the parties hereto have agreed to provide for the terms of the cancellation of the Agreements by entering into this Settlement Agreement.

NOW, THEREFORE, in consideration of the premises set forth above, and the mutual covenants set forth in this Settlement Agreement, and intending to be legally bound hereby, the parties do hereby agree as follows:

ARTICLE I

SETTLEMENT; REPRESENTATIONS AND WARRANTIES

1.1           Settlement Amount. In consideration of the release by Releasing Party of the Company from any and all known liabilities concerning and/or arising from the Agreements and all the transactions, obligations or commitments made in the Agreements, the Company hereby agrees to issue to Releasing Party 2,140,974  shares of common stock in connection with the conversion of outstanding debt and interest due, pursuant to the 8% Convertible Note payable within 5 business days from the date hereof (the consideration described herein this paragraph 1.1 shall be referred to herein as, the "Settlement Amount"). It is expressly acknowledged and agreed that the Company's obligation to make the payment is due and payable to Releasing Party by the stated deadline. It is expressly acknowledged and agreed between the parties that the Company shall have no other obligations (including to make any other monetary payments or provide any other type of consideration or compensation) in connection with this Settlement Agreement. The Releasing Party hereby confirms that such Purchaser has not transferred to any other person, entity, association, affiliate or the like any of the Agreements, or underlying securities acquired by such Releasing Party pursuant to the Agreements, and shall return to the Company original copy of the 8% Senior Convertible Note within 5 business days from the date hereof.

[Signature page to follows]

IN WITNESS WHEREOF, the Parties have executed this Settlement Agreement on the date first above written.

ZAP
a California corporation
By:	/s/ Steven Schneider
	Name: Steven Schneider
	Title:   Chief Executive Officer

AL YOUSUF LLC
By:	/s/ Eqbal Al Yousuf
	Name: Eqbal Al Yousuf, President