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):  June 9, 2009

ZAP

(Exact name of Registrant as specified in its charter)

California	0-303000	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:

o Written communications pursuant to Rule 425 under 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-14(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 3.02-   Securities and Trading Markets

Item 3.02  Unregistered Sales of Equity Securities.

The Registrant announces that it has closed a private placement for $2,000,000 in exchange for  8,000,000 shares of Common Stock at $0.25 per share. The aggregate proceeds from the placement of the Common Stock of $2,000,000 will be released in stages through the 4th quarter of 2010. The proceeds from the placement of the Common Stock will be used for general and administrative operating expenses and to continue the Company’s accelerated R&D on the new electric vehicles in the planning pipeline.

In addition warrants were also issued to the investors which grant the holders the right to purchase up to 8,000,000 shares of the Registrant’s Common Stock at a price of $0.50 per share.

The securities were placed with The Banks Group, LLC and The Banks Development Trust, respectively. 

As of the quarter ended March 31, 2009, the Registrant had 70,019,837 shares of Common Stock issued and outstanding. 

Section 9.01-   Financial Statements and Exhibits 

Item 9.01  Financial Statements and Exhibits 

Exhibit               Description 

10.1             Subscription Agreement dated June 9, 2009 from The Banks Group, LLC. 

10.2             Subscription Agreement dated June 9, 2009 from The Banks Development Trust. 

10.3             Warrant to Purchase Common Stock dated June 9, 2009 issued to The Banks Group,LLC. 

10.4             Warrant to Purchase Common Stock dated June 9, 2009 issued to The Banks    Development Trust 

Signatures

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

	ZAP
Date: June 11, 2009	By:	/s/ Steven M. Schneider
		Chief Executive Officer

EX-10.1

Exhibit 10.1   Subscription Agreement dated June 9, 2009 from The Banks Group, LLC. 

SUBSCRIPTION AGREEMENT

FOR

ZAP

THIS SUBSCRIPTION AGREEMENT (“Agreement”) is made and entered into by and between ZAP, a California corporation ("Company”), and the undersigned subscriber(s) ("Investor") who hereby agrees as set forth below.

1.           SUBSCRIPTION.  Investor, intending to be legally bound, hereby subscribes for:

4,000,000 warrants at $.50

4,000,000 shares at $.25

The shares are common shares, no par value are referred to as the “Securities.”  The share certificate(s) representing the Securities purchased pursuant to the terms of this Agreement shall be delivered concurrent with the initial payment as provided for in section “j” hereof.

2.           CONDITIONS TO OFFER.  Investor’s subscription is made subject to the following terms and conditions:

(a)           The Company shall have the right to accept or reject this subscription. If the Company accepts this Subscription, it will execute and redeliver this Agreement to Investor.

(b) The accuracy and continued accuracy of all representations, warranties and agreements of Investor herein, and in the Investor Questionnaire.

3.           RECEIPT OF COMPANY INFORMATION.   By executing this Subscription Agreement, Investor hereby acknowledges receiving and reading a copy of the Company’s Annual Report on Form 10-KSB for the most recent fiscal year, the Definitive Proxy Statement for the most recent Annual Meeting of Shareholders, Quarterly Reports on Form 10-QSB filed during the current fiscal year, Current Reports on Form 8-K filed subsequent to the most recent Quarterly Report on Form 10-QSB, a description of the Securities being issued to the Investor, the use of the proceeds being received by the Investor if the Investor is paying cash for the Securities, and a description of any material changes in the Company’s affairs that are not disclosed in the documents furnished (collectively, the “Company Documents”).  Investor understands the special risks in purchasing the Securities as described in the information provided by the Company, and hereby acknowledges and agrees that no representations have been made, or if made, will be relied upon, other than those contained in the documents furnished.

4.           REPRESENTATIONS AND WARRANTIES.   By executing the Subscription Agreement, Investor represents and warrants to the Company that:

(a)            The Securities are being acquired for Investor’s own account, for investment purposes only, and not with a view to, or for resale in connection with, any distribution or public

offering thereof within the meaning of the Securities Act of 1933, as amended (“Act”), or the securities laws of any state.

(b)            Investor understands that the Securities have not been registered under the Act by reason of issuance in a transaction exempt from the registration requirements of the Act and that the Securities may not be sold, offered for sale, transferred, pledged, hypothecated or otherwise disposed of except in compliance with the Act, that the Company has no intention of registering the Securities for resale. Investor understands the legal consequences of the foregoing to mean that the Securities and the economic risk of its investment in the Securities must be held by Investor for an indefinite period of time.  Investor cannot transfer the Securities until the later of (1) 6  months from the date the purchase contemplated by this Agreement is consummated, and (2) expiration of the restrictions of Rule 144 of the Securities Act of 1933, as amended.  Investor further understands that the Securities have not been registered under any state law by reason of their issuance in a transaction exempt from the registration requirements of state law, and that no federal or state agency has made any finding or determination as to the fairness of an investment in, or any recommendation or endorsement of, the Securities.

(c) Investor understands that the Securities are “restricted securities” within the meaning of Rule 144 and that a legend restricting sales or transfers will appear on any certificates issued to represent such Securities.  Investor bears the burden to establish the availability of any exemption under Rule 144, or otherwise, for any transfer which the Investor intends to make.  Any transferor may be required to furnish an opinion of counsel satisfactory to the Company that the proposed transfer complies with applicable federal and state securities laws.

(d)           Investor and its advisors have been provided with information concerning the Company, including, without limitation, the Company Documents, and have read the Company Documents and have been afforded an opportunity to ask such questions of the Company’s officers and representatives concerning the Company’s property, business, operations, financial condition, assets, liabilities and other relevant matters as they have deemed necessary or desirable, and have been given all such information as has been requested, in order to evaluate the merits and risks of the prospective investment contemplated herein.  Investor and its advisors have been provided with full and free access and opportunity to inspect, review, examine, and inquire about all books, records, and information, including financial information, of the Company, its business and affairs and have made such inspection, review, examination, due diligence and inquiry as they have deemed appropriate.  Investor has reviewed the merits and evaluated the risks of the investment with its own tax and legal counsel to the extent deemed advisable.

(e)           Investor has such knowledge and experience in financial and business matters, that Investor is capable of evaluating the merits and risks of the purchase of the Securities.  Investor understands that the acquisition of the Securities is a high risk and speculative investment involving the risk of total loss.

(f)           Investor has the financial ability to bear the economic risk of its investment, has adequate means of providing for its current needs and personal contingencies, and has no need for liquidity with respect to its investment in the Securities.  Investor's overall commitment to investments, including the Securities, which are not readily marketable, is not disproportionate to Investor's net worth.

(g)            INVESTOR HAS RECEIVED AND READ THE COMPANY DOCUMENTS AND

2

FULLY RECOGNIZES THE RISKS OF INVESTMENT IN THE SECURITIES.  In making Investor's decision to purchase Securities herein subscribed for, Investor has relied solely upon independent investigations made by Investor or Investor's investment advisers, if any, and not solely upon the Company Documents.  Investor understands that an investment in the Securities involves certain risks and Investor has taken full cognizance of and understands such risks.

(h)           Each representation and warranty of Investor contained herein and all information furnished by Investor to the Company, including the information furnished by Investor in the Investor Questionnaire, is true correct and complete in all respects.

           (i)Company and its officers and directors shall take such actions as may be required by law to remove the Rule 144 restrictions immediately upon 6 months having elapsed from the date of purchase of the Securities.  This obligation shall apply to each the 4,000,000 shares of stock (Securities) being purchased at this time, as well as to the Securities issued in consideration of the 4,000,000 warrants that are being issued concurrently herewith.  This shall include, but not be limited to the Company having its legal counsel issue an opinion letter in form satisfactory to the transfer agent, or such other person or entity, as may be required, to have the Rule 144 restriction immediately removed from the Securities such that the same are immediately freely and without restriction saleable or transferrable by Investor.

          (j) Investor shall pay for the 4,000,000 shares of stock (Securities) in the following manner: (1) the sum of five hundred thousand dollars upon execution of this Subscription Agreement and (2) the balance of five hundred thousand dollars commencing on January 1, 2010 and continuing thereafter on the first day of each month until fully paid an amount equal to the lesser of (a) one-half of the general and administrative expenses of the corporation for the preceding calendar month or (b) the sum of fifty thousand dollars.  Company warrants and represents that all funds provided for herein with respect to the purchase of the Securities shall only be used for the Company’s general and administrative expenses.

The foregoing representations and warranties are made by Investor and Company, and the information furnished by Investor in the Investor Questionnaire has been so furnished, with the intent that the same will be relied upon in determining its suitability as a purchaser of Securities. Investor undertakes to notify the Company immediately of any change in any representation or warranty or other information relating to Investor set forth herein or in the Investor Questionnaire.  If more than one person is signing this Agreement, each representation and warranty shall be a joint and several of each such person.

5.           INDEMNIFICATION.  Investor hereby agrees to indemnify and hold harmless the Company and all directors, officers, employees, agents and affiliates from any and all damages, losses, expenses or costs (including reasonable attorney’s fees) which they may incur by reason of Investor’s failure to fulfill all of the terms and conditions of this Subscription Agreement or by reason of Investor’s breach of any of the representations, warranties or agreements contained in this Subscription Agreement or in the Investor Questionnaire.  All statements, representations, warranties or covenants in the indemnification contained in this Subscription Agreement shall survive the acceptance of this subscription.

6.           REVOCATION.  Except to the extent permitted by applicable securities laws, Investor agrees that Investor shall not cancel, terminate or revoke this Subscription Agreement or any agreement

3

hereunder, and that this Subscription Agreement shall survive Investor’s death, disability, insolvency and bankruptcy.

7.           APPLICABLE LAW; VENUE.  This Agreement shall be construed in accordance with the laws of the State of California and deemed executed in Santa Rosa, California.  The venue of any action brought upon this Agreement or with respect to the undersigned’s Securities in the Company or any of the events surrounding his purchase thereof will be in the state or federal courts situated in Sonoma County, California to which jurisdiction Investor consents.  Investor hereby waives his right to trial by jury with respect to any action referenced in this Section 7.

8.           MISCELLANEOUS PROVISIONS.This Agreement sets forth the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior oral and written negotiations, representations, agreements and understandings of the parties.  This Agreement shall not be amended, altered or modified except by a written instrument signed by all of the parties hereto.  This Agreement shall be governed by, construed and enforced in accordance with the internal laws of the State of California. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors, assigns and legal representatives.  This Subscription Agreement shall be effective upon the date of its acceptance and execution by the Company.

4

ZAP

INVESTOR SIGNATURE/SUBSCRIPTION AGREEMENT

The undersigned has received the Company Documents and has read this entire Subscription Agreement together with such Company Documents.  This Subscription Agreement has been executed this 9th day of June, 2009 at Oakland, CA.

Exact Name on Investor Account: The Banks Group, LLC

Signature :   /s/ Jeffrey G. Banks                         

Jeffrey G. Banks, Manager

(This signature should be that of (i) the Investor(s), or (ii) in the case of a trust, partnership or corporation, the signature should be that of the representative of the Investor such as the trustee, general partner or corporate officer).

Print Name: Jeffrey G. Banks, Manager of The Banks Group, LLC

Print Title:  Manager

AddressStreet:  c/o The Banks Group P O Box 10287 Oakland California 94610    

Agreed and Accepted:

ZAP, a California corporation

BY:

Name:  StevenSchneider                         

Title: Chief Executive Officer                  

Date:   June 9, 2009

5

EX-10.2

Exhibit 10.2   Subscription Agreement dated June 9, 2009 from The Banks Development Trust

SUBSCRIPTION AGREEMENT

FOR

ZAP

THIS SUBSCRIPTION AGREEMENT (“Agreement”) is made and entered into by and between ZAP, a California corporation ("Company”), and the undersigned subscriber(s) ("Investor") who hereby agrees as set forth below.

1.           SUBSCRIPTION.  Investor, intending to be legally bound, hereby subscribes for:

4,000,000 warrants at $.50

4,000,000 shares at $.25

The shares are common shares, no par value are referred to as the “Securities.”  The share certificate(s) representing the Securities purchase pursuant to the terms of this Agreement shall be delivered concurrent with the initial payment as provided for in section “j” hereof.

2.           CONDITIONS TO OFFER.  Investor’s subscription is made subject to the following terms and conditions:

(a)           The Company shall have the right to accept or reject this subscription. If the Company accepts this Subscription, it will execute and redeliver this Agreement to Investor.

(b) The accuracy and continued accuracy of all representations, warranties and agreements of Investor herein, and in the Investor Questionnaire.

3.           RECEIPT OF COMPANY INFORMATION.   By executing this Subscription Agreement, Investor hereby acknowledges receiving and reading a copy of the Company’s Annual Report on Form 10-KSB for the most recent fiscal year, the Definitive Proxy Statement for the most recent Annual Meeting of Shareholders, Quarterly Reports on Form 10-QSB filed during the current fiscal year, Current Reports on Form 8-K filed subsequent to the most recent Quarterly Report on Form 10-QSB, a description of the Securities being issued to the Investor, the use of the proceeds being received by the Investor if the Investor is paying cash for the Securities, and a description of any material changes in the Company’s affairs that are not disclosed in the documents furnished (collectively, the “Company Documents”).  Investor understands the special risks in purchasing the Securities as described in the information provided by the Company, and hereby acknowledges and agrees that no representations have been made, or if made, will be relied upon, other than those contained in the documents furnished.

4.           REPRESENTATIONS AND WARRANTIES.   By executing the Subscription Agreement, Investor represents and warrants to the Company that:

(a)            The Securities are being acquired for Investor’s own account, for investment purposes

only, and not with a view to, or for resale in connection with, any distribution or public offering thereof within the meaning of the Securities Act of 1933, as amended (“Act”), or the securities laws of any state.

(b)            Investor understands that the Securities have not been registered under the Act by reason of issuance in a transaction exempt from the registration requirements of the Act and that the Securities may not be sold, offered for sale, transferred, pledged, hypothecated or otherwise disposed of except in compliance with the Act, that the Company has no intention of registering the Securities for resale. Investor understands the legal consequences of the foregoing to mean that the Securities and the economic risk of its investment in the Securities must be held by Investor for an indefinite period of time.  Investor cannot transfer the Securities until the later of (1) 6  months from the date the purchase contemplated by this Agreement is consummated, and (2) expiration of the restrictions of Rule 144 of the Securities Act of 1933, as amended.  Investor further understands that the Securities have not been registered under any state law by reason of their issuance in a transaction exempt from the registration requirements of state law, and that no federal or state agency has made any finding or determination as to the fairness of an investment in, or any recommendation or endorsement of, the Securities.

(c) Investor understands that the Securities are “restricted securities” within the meaning of Rule 144 and that a legend restricting sales or transfers will appear on any certificates issued to represent such Securities.  Investor bears the burden to establish the availability of any exemption under Rule 144, or otherwise, for any transfer which the Investor intends to make.  Any transferor may be required to furnish an opinion of counsel satisfactory to the Company that the proposed transfer complies with applicable federal and state securities laws.

(d)           Investor and its advisors have been provided with information concerning the Company, including, without limitation, the Company Documents, and have read the Company Documents and have been afforded an opportunity to ask such questions of the Company’s officers and representatives concerning the Company’s property, business, operations, financial condition, assets, liabilities and other relevant matters as they have deemed necessary or desirable, and have been given all such information as has been requested, in order to evaluate the merits and risks of the prospective investment contemplated herein.  Investor and its advisors have been provided with full and free access and opportunity to inspect, There view, examine, and inquire about all books, records, and information, including financial information, of the Company, its business and affairs and have made such inspection, review, examination, due diligence and inquiry as they have deemed appropriate.  Investor has reviewed the merits and evaluated the risks of the investment with its own tax and legal counsel to the extent deemed advisable.

(e)           Investor has such knowledge and experience in financial and business matters, that Investor is capable of evaluating the merits and risks of the purchase of the Securities.  Investor understands that the acquisition of the Securities is a high risk and speculative investment involving the risk of total loss.

(f)           Investor has the financial ability to bear the economic risk of its investment, has adequate means of providing for its current needs and personal contingencies, and has no need for liquidity with respect to its investment in the Securities.  Investor's overall commitment to investments, including the Securities, which are not readily marketable, is not disproportionate to Investor's net worth.

2

(g)            INVESTOR HAS RECEIVED AND READ THE COMPANY DOCUMENTS AND FULLY RECOGNIZES THE RISKS OF INVESTMENT IN THE SECURITIES.  In making Investor's decision to purchase Securities herein subscribed for, Investor has relied solely upon independent investigations made by Investor or Investor's investment advisers, if any, and not solely upon the Company Documents.  Investor understands that an investment in the Securities involves certain risks and Investor has taken full cognizance of and understands such risks.

(h)           Each representation and warranty of Investor contained herein and all information furnished by Investor to the Company, including the information furnished by Investor in the Investor Questionnaire, is true correct and complete in all respects.

           (i)Company and its officers and directors shall take such actions as may be required by law to remove the Rule 144 restrictions immediately upon 6 months having elapsed from the date of purchase of the Securities.  This obligation shall apply to each the 4,000,000 shares of stock (Securities) being purchased at this time, as well as to the Securities issued in consideration of the 4,000,000 warrants that are being issued concurrently herewith.  This shall include, but not be limited to the Company having its legal counsel issue an opinion letter in form satisfactory to the transfer agent, or such other person or entity, as may be required, to have the Rule 144 restriction immediately removed from the Securities such that the same are immediately freely and without restriction saleable or transferrable by Investor.

          (j) Investor shall pay for the 4,000,000 shares of stock (Securities) in the following manner: (1) the sum of five hundred thousand dollars upon execution of this Subscription Agreement and (2) the balance of five hundred thousand dollars commencing on January 1, 2010 and continuing thereafter on the first day of each month until fully paid an amount equal to the lesser of (a) one-half of the general and administrative expenses of the corporation for the preceding calendar month or (b) the sum of fifty thousand dollars.  Company warrants and represents that all funds provided for herein with respect to the purchase of the Securities shall only be used for the Company’s general and administrative expenses.

The foregoing representations and warranties are made by Investor, and the information furnished by Investor in the Investor Questionnaire has been so furnished, with the intent that the same will be relied upon in determining its suitability as a purchaser of Securities. Investor undertakes to notify the Company immediately of any change in any representation or warranty or other information relating to Investor set forth herein or in the Investor Questionnaire.  If more than one person is signing this Agreement, each representation and warranty shall be a joint and several of each such person.

5.           INDEMNIFICATION.  Investor hereby agrees to indemnify and hold harmless the Company and all directors, officers, employees, agents and affiliates from any and all damages, losses, expenses or costs (including reasonable attorney’s fees) which they may incur by reason of Investor’s failure to fulfill all of the terms and conditions of this Subscription Agreement or by reason of Investor’s breach of any of the representations, warranties or agreements contained in this Subscription Agreement or in the Investor Questionnaire.  All statements, representations, warranties or covenants in the indemnification contained in this Subscription Agreement shall survive the acceptance of this subscription.

6.           REVOCATION.  Except to the extent permitted by applicable securities laws, Investor agrees that Investor shall not cancel, terminate or revoke this Subscription Agreement or any agreement

3

hereunder, and that this Subscription Agreement shall survive Investor’s death, disability, insolvency and bankruptcy.

7.           APPLICABLE LAW; VENUE.  This Agreement shall be construed in accordance with the laws of the State of California and deemed executed in Santa Rosa, California.  The venue of any action brought upon this Agreement or with respect to the undersigned’s Securities in the Company or any of the events surrounding his purchase thereof will be in the state or federal courts situated in Sonoma County, California to which jurisdiction Investor consents.  Investor hereby waives his right to trial by jury with respect to any action referenced in this Section 7.

8.           MISCELLANEOUS PROVISIONS.This Agreement sets forth the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior oral and written negotiations, representations, agreements and understandings of the parties.  This Agreement shall not be amended, altered or modified except by a written instrument signed by all of the parties hereto.  This Agreement shall be governed by, construed and enforced in accordance with the internal laws of the State of California. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors, assigns and legal representatives.  This Subscription Agreement shall be effective upon the date of its acceptance and execution by the Company.

4

ZAP

INVESTOR SIGNATURE/SUBSCRIPTION AGREEMENT

The undersigned has received the Company Documents and has read this entire Subscription Agreement together with such Company Documents.  This Subscription Agreement has been executed this 9th day of June, 2009 at Oakland, CA.

Exact Name on Investor Account: The Banks Development Trust

Signature : /s/ Ronald S Berg                     

Ronald S. Berg, Trustee

(This signature should be that of (i) the Investor(s), or (ii) in the case of a trust, partnership or corporation, the signature should be that of the representative of the Investor such as the trustee, general partner or corporate officer).

Print Name:  Ronald S. Berg

Print Title:  Trustee of The Banks Development Trust

Address Street:  Ronald S. Berg, Esq., Berg and Berg, L.L.P. Post Office Box 8817 Calabasas, CA 91372-8817

Agreed and Accepted:

ZAP, a California corporation

BY:

Name: Steven Schneider                           

Title: Chief Executive Officer                   

Date:   June 9, 2009

5

EX-10.3

Exhibit 10.3   Warrant to Purchase Common Stock dated June 9, 2009 issued to The Banks Group,LLC

THIS WARRANT (THIS “WARRANT”) AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVENOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED FOR SALE OR SOLD UNLESS A REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS SHALL BE EFFECTIVE WITH RESPECT THERETO, OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN CONNECTION WITH SUCH OFFER OR SALE. THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF (I) MAY BE PLEDGED OR HYPOTHECATED IN CONNECTION WITH A BONA FIDE MARGIN LOAN OR OTHER FINANCING SECURED BY SUCH SECURITIES OR (II) MAY BE TRANSFERRED OR ASSIGNED TO AN AFFILIATE OF THE HOLDER HEREOF WITHOUT THE NECESSITY OF AN OPINION OF COUNSEL OR THE CONSENT OF THE ISSUER HEREOF.

WARRANT

TO PURCHASE COMMON STOCK

OF

ZAP

Issue Date: June 9, 2009 Warrant No. 1

THIS CERTIFIES that The Banks Group LLC, a California limited liability company or any permitted subsequent holder hereof (the “Holder”), has the right to purchase from ZAP, a California corporation (the “Company”), up to Four Million (4,000,000) fully paid and nonassessable shares of the Company’s common stock, no par value (the “Common Stock”), subject to adjustment as provided herein, at a price per share equal to the Exercise Price (as defined below), at any time and from time to time beginning on the date on which this Warrant is issued (the “Issue Date”) and ending at 5:00 p.m., Pacific Standard time, on June 1, 2014 or, if such day is not a Business Day, on the next succeeding Business Day (the “Expiration Date”). This Warrant is issued pursuant to a Subscription Agreement, dated as of June 9, 2009 (the “Securities Purchase Agreement”).  Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Securities Purchase Agreement.

1.           EXERCISE.

(a)           Right to Exercise; Exercise Price.  The Holder shall have the right to exercise this Warrant at any time and from time to time during the period beginning on the Issue Date and ending at 5 p.m., Pacific Standard time, on the Expiration Date as to all or any part of the shares

of Common Stock covered hereby (the “Warrant Shares”).  The “Exercise Price” for each Warrant Share purchased by the Holder upon the exercise of this Warrant shall be $0.50.

(b)           Exercise Notice.  In order to exercise this Warrant, the Holder shall notify the Company at any time prior to 5:00 p.m., Pacific Standard time, on the Business Day on which the Holder wishes to effect such exercise (the “Exercise Date”), to the Company an executed copy of the notice of exercise in the form attached hereto as Exhibit A (the “Exercise Notice”) and (ii) in the case of a Cash Exercise (as defined below), deliver the Exercise Price to the Company by wire transfer of immediately available funds.  The Holder shall promptly thereafter deliver the original Warrant to the Company for cancellation (and replacement with a new Warrant if exercised in part) pursuant to Section 1(d) of this Warrant.  Subject to Section 8(d), the Exercise Notice shall also state the name or names in which the Warrant Shares issuable on such exercise shall be issued if other than the Holder.

(c)           Holder of Record.  The Holder shall, for all purposes, be deemed to have become the holder of record of the Warrant Shares specified in an Exercise Notice on the Exercise Date specified therein, irrespective of the date of delivery of such Warrant Shares. Except as specifically provided herein, nothing in this Warrant shall be construed as conferring upon the Holder hereof any rights as a stockholder of the Company prior to the Exercise Date.

(d)           Cancellation of Warrant.  This Warrant shall be canceled upon its exercise and, if this Warrant is exercised in part, the Company shall, at the time that it delivers Warrant Shares to the Holder pursuant to such exercise as provided herein, issue a new warrant, and deliver to the Holder a certificate representing such new warrant, with terms identical in all respects to this Warrant (except that such new warrant shall be exercisable into the number of shares of Common Stock with respect to which this Warrant shall remain unexercised); provided, however, that the Holder shall be entitled to exercise all or any portion of such new warrant at any time following the time at which this Warrant is exercised, regardless of whether the Company has actually issued such new warrant or delivered to the Holder a certificate therefor.

(e)           Stock Splits, Stock Interests, Etc.  If, at any time on or after the Issue Date, the number of outstanding shares of Common Stock is increased by a stock split, stock dividend,  reclassification or other similar event, the Exercise Price shall be proportionately reduced and the number of shares of Common Stock shall be proportionately increased such that there shall have been no dilution to Holder, or if the number of outstanding shares of Common Stock is decreased by a reverse stock split, combination, reclassification or other similar event, the Exercise Price shall be proportionately increased. The Company shall notify the Holder and the Company’s transfer agent of such change.

(1)                 Distributions.  If, at any time after the Issue Date, the Company declares or makes any distribution of cash or any other assets (or rights to acquire such assets) to holders of Common Stock, including without limitation any dividend or distribution to the Company’s stockholders in shares (or rights to acquire shares) of capital stock of a subsidiary) (a

2

“Distribution”), the Company shall deliver written notice of such Distribution (a “Distribution Notice”) to the Holder at least fifteen (15) days prior to the earlier to occur of (i) the record date for determining stockholders entitled to such Distribution (the “Record Date”) or (ii) the date on which such Distribution is made (the “Distribution Date”) (the earlier of such dates being referred to as the “Determination Date”).  Upon receipt of the Distribution Notice, the Holder shall promptly (but in no event later than three (3) Business Days) notify the Company whether it has elected (A) to receive the same amount and type of assets (including, without limitation, cash) being distributed as though the Holder were, on the Determination Date, a holder of a number of shares of Common Stock into which this Warrant is exercisable as of such Determination Date (such number of shares to be determined without giving effect to any limitations on such exercise) or (B) upon any exercise of this Warrant on or after the Distribution Date, to reduce the Exercise Price in effect on the Business Day immediately preceding the Record Date by an amount equal to the fair market value of the assets to be distributed divided by the number of shares of Common Stock as to which such Distribution is to be made, such fair market value to be reasonably determined in good faith by the independent members of the Company’s Board of Directors.  Upon receipt of such election notice from the Holder, the Company shall timely effectuate the transaction or adjustment contemplated herein. Notwithstanding the foregoing, no adjustment shall be made pursuant to this section if such adjustment would result in an increase in the Exercise Price.

8.           MISCELLANEOUS.

(a)           Failure to Exercise Rights not Waiver.  No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude any other or further exercise thereof. All rights and remedies of the Holder hereunder are cumulative

3

and not exclusive of any rights or remedies otherwise available. In the event that the Company breaches any of its obligations hereunder to issue Warrant Shares or pay any amounts as and when due, the Company shall bear all costs incurred by the Holder in collecting such amount, including without limitation reasonable legal fees and expenses.

(b)           Notices. Any notice, demand or request required or permitted to be given by the Company or the Holder pursuant to the terms of this Warrant shall be in writing and shall be deemed delivered (i) when delivered personally or by verifiable facsimile transmission, unless such delivery is made on a day that is not a Business Day, in which case such delivery will be deemed to be made on the next succeeding Business Day, (ii) on the next Business Day after timely delivery to an overnight courier and (iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid), addressed as follows:

If to the Company:

ZAP

501 Fourth Street

Santa Rosa, California  95401

If to the Holder:

Mr. Jeffrey G. Banks, Manager

P O Box 10287

Oakland California 94610 

and if to the Holder at the above address and to such address for such party as shall appear on the signature page of the Securities Purchase Agreement executed by such party, or as shall be designated by such party in writing to the other parties hereto in accordance this Section 8(b).

(c)           Amendments and Waivers.  No amendment, modification or other change to, or waiver of any provision of, this Warrant or any other Warrant may be made unless such amendment, modification or change, or request for waiver, is (A) set forth in writing and is signed by the Company and Holder and (B) applied to all of the Warrants.  Upon the satisfaction of the conditions described in (A) and (B), this Warrant shall be deemed to incorporate the amendment, modification, change or waiver effected thereby as of the effective date thereof.

4

(d)           Transfer of Warrant.  The Holder may sell, transfer or otherwise dispose of all or any part of this Warrant (including without limitation pursuant to a pledge) to any person or entity as long as such sale, transfer or disposition is the subject of an effective registration statement under the Securities Act of 1933, as amended, and applicable state securities laws, or is exempt from registration thereunder, and is otherwise made in accordance with the applicable law and applicable provisions of the Securities Purchase Agreement.  From and after the date of any such sale, transfer or disposition, the transferee hereof shall be deemed to be the holder of the portion of this Warrant acquired by such transferee, and the Company shall, as promptly as practicable, issue and deliver to such transferee a new Warrant identical in all respects to this Warrant, in the name of such transferee. The Company shall be entitled to treat the original Holder as the holder of this entire Warrant unless and until it receives written notice of the sale, transfer or disposition hereof.   Company and its officers and directors shall take such action as may be required by law to remove the Rule 144 restrictions, if any, immediately upon six months having elapsed from the Exercise Date.  This obligation shall apply to all, or any part, of the Common Stock purchased by Holder pursuant to the terms of this Warrant.  This shall include, but not be limited to, the Company having legal counsel issue an opinion letter in form satisfactory to the transfer agent, or such other person or entity, as may be required by law, to have the Rule 144 restriction immediately removed from the Common Shares such that the same are immediately freely and without restriction saleable or transferable by Holder.

(e)           Lost or Stolen Warrant.  Upon receipt by the Company of evidence of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) of indemnity or security reasonably satisfactory to the Company, and upon surrender and cancellation of this Warrant, if mutilated, the Company shall execute and deliver to the Holder a new Warrant identical in all respects to this Warrant.

(f)           Governing Law.  This Warrant shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and to be performed entirely within the State of California.

(g)           Successors and Assigns.  The terms and conditions of this Warrant shall inure to the benefit of and be binding upon the respective successors (whether by merger or otherwise) and permitted assigns of the Company and the Holder. The Company may not assign its rights or obligations under this Warrant except as specifically required or permitted pursuant to the terms hereof.

5

[Signature Page to Follow]

6

IN WITNESS WHEREOF, the Company has duly executed and delivered this Warrant as of the Issue Date.

ZAP

By /s/  Steven Schneider                    

Steven Schneider

CEO 

7

EXHIBIT A to WARRANT

EXERCISE NOTICE

The undersigned Holder hereby irrevocably exercises the right to purchase of the shares of Common Stock (“Warrant Shares”) of ZAP evidenced by the attached Warrant (the “Warrant”).  Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

1.           Form of Exercise Price.  The Holder intends that payment of the Exercise Price shall be made as:

______ a Cash Exercise with respect to _________________ Warrant Shares; and/or

______ a Cashless Exercise with respect to _________________ Warrant Shares, as permitted by the attached Warrant.

2.           Payment of Exercise Price.  In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder shall pay the sum of $________________ to the Company in accordance with the terms of the Warrant.

Date: ______________________

___________________________________

Name of Registered Holder

By:  _______________________________

       Name:

       Title:

Holder Requests Delivery to be made: (check one)

 By Delivery of Physical Certificates to the Above Address

 Through Depository Trust Corporation

(Account )

8

EX-10.4

Exhibit 10.4   Warrant to Purchase Common Stock dated June 9, 2009 issued to The Banks Development Trust

THIS WARRANT (THIS “WARRANT”) AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVENOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED FOR SALE OR SOLD UNLESS A REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS SHALL BE EFFECTIVE WITH RESPECT THERETO, OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN CONNECTION WITH SUCH OFFER OR SALE. THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF (I) MAY BE PLEDGED OR HYPOTHECATED IN CONNECTION WITH A BONA FIDE MARGIN LOAN OR OTHER FINANCING SECURED BY SUCH SECURITIES OR (II) MAY BE TRANSFERRED OR ASSIGNED TO AN AFFILIATE OF THE HOLDER HEREOF WITHOUT THE NECESSITY OF AN OPINION OF COUNSEL OR THE CONSENT OF THE ISSUER HEREOF.

WARRANT

TO PURCHASE COMMON STOCK

OF

ZAP

Issue Date: June 9, 2009 Warrant No. 2

THIS CERTIFIES that Ronald S. Berg, Trustee of The Banks Development Trust or any permitted subsequent holder hereof (the “Holder”), has the right to purchase from ZAP, a California corporation (the “Company”), up to Four Million (4,000,000) fully paid and nonassessable shares of the Company’s common stock, no par value (the “Common Stock”), subject to adjustment as provided herein, at a price per share equal to the Exercise Price (as defined below), at any time and from time to time beginning on the date on which this Warrant is issued (the “Issue Date”) and ending at 5:00 p.m., Pacific Standard time, on June 1, 2014 or, if such day is not a Business Day, on the next succeeding Business Day (the “Expiration Date”). This Warrant is issued pursuant to a Subscription Agreement, dated as of June 9, 2009 (the “Securities Purchase Agreement”).  Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Securities Purchase Agreement.

1.           EXERCISE.

(a)           Right to Exercise; Exercise Price.  The Holder shall have the right to exercise this Warrant at any time and from time to time during the period beginning on the Issue Date and ending at 5 p.m., Pacific Standard time, on the Expiration Date as to all or any part of the shares of Common Stock covered hereby (the “Warrant Shares”).  The “Exercise Price” for each Warrant Share purchased by the Holder upon the exercise of this Warrant shall be $0.50.

(b)           Exercise Notice.  In order to exercise this Warrant, the Holder shall notify the Company at any time prior to 5:00 p.m., Pacific Standard time, on the Business Day on which the Holder wishes to effect such exercise (the “Exercise Date”), to the Company an executed copy of the notice of exercise in the form attached hereto as Exhibit A (the “Exercise Notice”) and (ii) in the case of a Cash Exercise (as defined below), deliver the Exercise Price to the Company by wire transfer of immediately available funds.  The Holder shall promptly thereafter deliver the original Warrant to the Company for cancellation (and replacement with a new Warrant if exercised in part) pursuant to Section 1(d) of this Warrant.  Subject to Section 8(d), the Exercise Notice shall also state the name or names in which the Warrant Shares issuable on such exercise shall be issued if other than the Holder.

(c)           Holder of Record.  The Holder shall, for all purposes, be deemed to have become the holder of record of the Warrant Shares specified in an Exercise Notice on the Exercise Date specified therein, irrespective of the date of delivery of such Warrant Shares. Except as specifically provided herein, nothing in this Warrant shall be construed as conferring upon the Holder hereof any rights as a stockholder of the Company prior to the Exercise Date.

(d)           Cancellation of Warrant.  This Warrant shall be canceled upon its exercise and, if this Warrant is exercised in part, the Company shall, at the time that it delivers Warrant Shares to the Holder pursuant to such exercise as provided herein, issue a new warrant, and deliver to the Holder a certificate representing such new warrant, with terms identical in all respects to this Warrant (except that such new warrant shall be exercisable into the number of shares of Common Stock with respect to which this Warrant shall remain unexercised); provided, however, that the Holder shall be entitled to exercise all or any portion of such new warrant at any time following the time at which this Warrant is exercised, regardless of whether the Company has actually issued such new warrant or delivered to the Holder a certificate therefor.

(e)           Stock Splits, Stock Interests, Etc.  If, at any time on or after the Issue Date, the number of outstanding shares of Common Stock is increased by a stock split, stock dividend,  reclassification or other similar event, the Exercise Price shall be proportionately reduced and the number of shares of Common Stock shall be proportionately increased such that there shall have been no dilution to Holder, or if the number of outstanding shares of Common Stock is decreased by a reverse stock split, combination, reclassification or other similar event, the Exercise Price shall be proportionately increased. The Company shall notify the Holder and the Company’s transfer agent of such change.

(1)                 Distributions.  If, at any time after the Issue Date, the Company declares or makes any distribution of cash or any other assets (or rights to acquire such assets) to holders of

2

Common Stock, including without limitation any dividend or distribution to the Company’s stockholders in shares (or rights to acquire shares) of capital stock of a subsidiary) (a “Distribution”), the Company shall deliver written notice of such Distribution (a “Distribution Notice”) to the Holder at least fifteen (15) days prior to the earlier to occur of (i) the record date for determining stockholders entitled to such Distribution (the “Record Date”) or (ii) the date on which such Distribution is made (the “Distribution Date”) (the earlier of such dates being referred to as the “Determination Date”).  Upon receipt of the Distribution Notice, the Holder shall promptly (but in no event later than three (3) Business Days) notify the Company whether it has elected (A) to receive the same amount and type of assets (including, without limitation, cash) being distributed as though the Holder were, on the Determination Date, a holder of a number of shares of Common Stock into which this Warrant is exercisable as of such Determination Date (such number of shares to be determined without giving effect to any limitations on such exercise) or (B) upon any exercise of this Warrant on or after the Distribution Date, to reduce the Exercise Price in effect on the Business Day immediately preceding the Record Date by an amount equal to the fair market value of the assets to be distributed divided by the number of shares of Common Stock as to which such Distribution is to be made, such fair market value to be reasonably determined in good faith by the independent members of the Company’s Board of Directors.  Upon receipt of such election notice from the Holder, the Company shall timely effectuate the transaction or adjustment contemplated herein. Notwithstanding the foregoing, no adjustment shall be made pursuant to this section if such adjustment would result in an increase in the Exercise Price.

3

8.           MISCELLANEOUS.

(a)           Failure to Exercise Rights not Waiver.  No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude any other or further exercise thereof. All rights and remedies of the Holder hereunder are cumulative and not exclusive of any rights or remedies otherwise available. In the event that the Company breaches any of its obligations hereunder to issue Warrant Shares or pay any amounts as and when due, the Company shall bear all costs incurred by the Holder in collecting such amount, including without limitation reasonable legal fees and expenses.

(b)           Notices. Any notice, demand or request required or permitted to be given by the Company or the Holder pursuant to the terms of this Warrant shall be in writing and shall be deemed delivered (i) when delivered personally or by verifiable facsimile transmission, unless such delivery is made on a day that is not a Business Day, in which case such delivery will be deemed to be made on the next succeeding Business Day, (ii) on the next Business Day after timely delivery to an overnight courier and (iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid), addressed as follows:

If to the Company:

ZAP

501 Fourth Street

Santa Rosa, California  95401

If to the Holder:

Ronald S. Berg, Esq., Berg and Berg, L.L.P.

Post Office Box 8817

Calabasas, CA 91372-8817

and if to the Holder at the above address and to such address for such party as shall appear on the signature page of the Securities Purchase Agreement executed by such party, or as shall be designated by such party in writing to the other parties hereto in accordance this Section 8(b).

(c)           Amendments and Waivers.  No amendment, modification or other change to, or waiver of any provision of, this Warrant or any other Warrant may be made unless such amendment, modification or change, or request for waiver, is (A) set forth in writing and is signed by the Company and Holder and (B) applied to all of the Warrants.  Upon the satisfaction

4

of the conditions described in (A) and (B), this Warrant shall be deemed to incorporate the amendment, modification, change or waiver effected thereby as of the effective date thereof.

(d)           Transfer of Warrant.  The Holder may sell, transfer or otherwise dispose of all or any part of this Warrant (including without limitation pursuant to a pledge) to any person or entity as long as such sale, transfer or disposition is the subject of an effective registration statement under the Securities Act of 1933, as amended, and applicable state securities laws, or is exempt from registration there under, and is otherwise made in accordance with the applicable law and applicable provisions of the Securities Purchase Agreement.  From and after the date of any such sale, transfer or disposition, the transferee hereof shall be deemed to be the holder of the portion of this Warrant acquired by such transferee, and the Company shall, as promptly as practicable, issue and deliver to such transferee a new Warrant identical in all respects to this Warrant, in the name of such transferee. The Company shall be entitled to treat the original Holder as the holder of this entire Warrant unless and until it receives written notice of the sale, transfer or disposition hereof.   Company and its officers and directors shall take such action as may be required by law to remove the Rule 144 restrictions, if any, immediately upon six months having elapsed from the Exercise Date.  This obligation shall apply to all, or any part, of the Common Stock purchased by Holder pursuant to the terms of this Warrant.  This shall include, but not be limited to, the Company having legal counsel issue an opinion letter in form satisfactory to the transfer agent, or such other person or entity, as may be required by law, to have the Rule 144 restriction immediately removed from the Common Shares such that the same are immediately freely and without restriction saleable or transferable by Holder.

(e)           Lost or Stolen Warrant.  Upon receipt by the Company of evidence of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) of indemnity or security reasonably satisfactory to the Company, and upon surrender and cancellation of this Warrant, if mutilated, the Company shall execute and deliver to the Holder a new Warrant identical in all respects to this Warrant.

(f)           Governing Law.  This Warrant shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and to be performed entirely within the State of California.

(g)           Successors and Assigns.  The terms and conditions of this Warrant shall inure to the benefit of and be binding upon the respective successors (whether by merger or otherwise) and permitted assigns of the Company and the Holder. The Company may not assign its rights or obligations under this Warrant except as specifically required or permitted pursuant to the terms hereof.

5

[Signature Page to Follow]

6

IN WITNESS WHEREOF, the Company has duly executed and delivered this Warrant as of the Issue Date.

ZAP

By /s/Steven Schneider       

Steven Schneider

CEO 

7

EXHIBIT A to WARRANT

EXERCISE NOTICE

The undersigned Holder hereby irrevocably exercises the right to purchase of the shares of Common Stock (“Warrant Shares”) of ZAP evidenced by the attached Warrant (the “Warrant”).  Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

1.           Form of Exercise Price.  The Holder intends that payment of the Exercise Price shall be made as:

______ a Cash Exercise with respect to _________________ Warrant Shares; and/or

______ a Cashless Exercise with respect to _________________ Warrant Shares, as permitted by the attached Warrant.

2.           Payment of Exercise Price.  In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder shall pay the sum of $________________ to the Company in accordance with the terms of the Warrant.

Date: ______________________

___________________________________

Name of Registered Holder

By:  _______________________________

       Name:

       Title:

Holder Requests Delivery to be made: (check one)

 By Delivery of Physical Certificates to the Above Address

 Through Depository Trust Corporation

(Account )

8