EXHIBIT
10.2
EXECUTION
VERSION
PREPARED BY
AND,
WHEN RECORDED,
RETURN TO:
Dewey &
LeBoeuf LLP
333 S. Grand
Ave., Ste. 2600 Los Angeles, CA 90071 Attention: Michael du
Quesnay
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Space Above
This Line For Recorder’s Use
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DEED OF TRUST, ASSIGNMENT OF
LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE
FILING
by
ZAP,
a California corporation
(Trustor)
to
Fidelity National Title
Company
having an address at:
400 Pitt Avenue
Sebastopol, CA 95472
(Trustee)
for the benefit of
Al Yousuf LLC
(Beneficiary)
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Dated:
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Location:
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Sonoma County,
California 95401
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DEED OF TRUST, ASSIGNMENT OF
LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE
FILING
THIS DEED OF
TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND
FIXTURE FILING (this “Deed of Trust”) is made as
of July 30, 2008 by Zap, a California corporation, having an
address at 501 4th Street, Santa Rosa, California 95401
(“Trustor”) to Fidelity National Title Company
(“Trustee”), in favor of Al Yousuf LLC, having
an address of Mezzanine Floor, Yamaha Showroom, Sheikh Zayed Road,
Dubai, United Arab Emirates (together with its successors and
assigns, “Beneficiary”).
STATEMENT OF PURPOSE
Trustor and Beneficiary are parties to a
Promissory Note dated as of the date hereof (the
“Note”), which Note provides for a loan in the
initial principal amount of one million seven hundred and sixty
thousand dollars ($1,760,000), and a maximum principal amount not
to exceed, at any one time, ten million dollars ($10,000,000) (the
“Loan”) to be made by Beneficiary to Trustor;
and
It is a condition to the obligation of
Beneficiary to make the loan to Trustor pursuant to the Note that
Trustor execute and deliver this Deed of Trust.
AGREEMENT
NOW, THEREFORE, in consideration of the making
of the Loan by Beneficiary to Trustor and the covenants,
agreements, representations and warranties set forth in the Loan
Documents, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and for
the purpose of securing the payment and performance of the
following (collectively, the “Loan
Obligations”): (a) all principal (including, without
limitation, any advance to Trustor now or hereafter made), interest
thereon and all other sums due and/or payable, and all obligations
owing by Trustor, under any Loan Document and amendments,
modifications, extensions, substitutions, exchanges and renewals
thereof (each of which shall enjoy the same priority as the advance
made on the Closing Date as evidenced by the Note); and (b) all
covenants, agreements and other obligations of Trustor under the
Loan Documents;
Trustor hereby
irrevocably grants, bargains, sells, releases, conveys, warrants,
assigns, transfers, mortgages, pledges, sets over and confirms unto
Trustee, its successors and assigns, in trust, WITH POWER OF SALE
AND RIGHT OF ENTRY AND POSSESSION, to have and to hold forever for
the security and benefit of Beneficiary and its successors and
assigns, all of Trustor’s right, title and interest in and to
the following property, rights, interests and estates, now existing
or hereafter coming into existence (the property, rights, interests
and estates hereinafter described are collectively referred to
herein as the “Mortgaged Property”): (i)
all the land located in the County and State identified on
Exhibit A attached hereto, as more particularly described on
such Exhibit A (the “Land”), (ii) the
Contracts; (iii) the Appurtenant Rights, (iv) the Equipment, (v)
the General Intangibles, (vi) the Improvements, (vii) the Leases,
(viii) the Permits (to the fullest extent assignable), (ix) the
Rents, (x) the Proceeds, and (xi) any and all other rights of
Trustor in
Deed of Trust, Assignment of Leases
and Rents,
Security Agreement and Fixture
Filing
and to the
items set forth in clauses (i) through (x) above, all whether now
owned or hereafter acquired, and all other property which is or
hereafter may become subject to a lien in favor of Beneficiary
pursuant to any Loan Document.
TO HAVE AND TO HOLD the Mortgaged Property and
all parts thereof unto Trustee, its successors and assigns, for the
benefit of Beneficiary, their successors and assigns
forever;
This Deed of Trust secures all present and
future loan disbursements or advances made by Beneficiary under the
Note, and all other sums from time to time owing to Beneficiary by
Trustor under the Loan Documents and under the Debt. The amount of
the present disbursement or advance secured is one million seven
hundred and sixty thousand dollars ($1,760,000), and the maximum
principal amount which may be secured at any one time is ten
million dollars ($10,000,000). The time period within which such
future disbursements or advances are to be made is the period
between the date of this Deed of Trust and July 30,
2009;
PROVIDED, HOWEVER, that these presents are upon
the express condition that, if Trustor shall pay or cause to be
paid to Beneficiary all sums due Beneficiary with respect to the
Loan under the Loan Documents and keep, perform and observe all the
covenants and promises in each of the Loan Documents, all without
fraud and delay, then this Deed of Trust, and all the properties,
interests, and rights hereby granted, bargained, and sold shall
cease, terminate and be void and Beneficiary shall instruct Trustee
to effect a full and proper termination, release and reconveyance;
otherwise the same shall remain in full force and
effect.
TO PROTECT THE SECURITY OF THIS DEED OF TRUST,
TRUSTOR HEREBY COVENANTS AND AGREES AS FOLLOWS:
ARTICLE 1
DEFINITIONS
Section 1.1. Certain Defined Terms. For
all purposes of this Deed of Trust, all capitalized terms shall
have the meaning ascribed in this Section 1.1 or if not defined
herein, then as defined in the Note:
“Appurtenant Rights”
means all easements, rights-of-way,
strips and gores of land, vaults, streets, ways, alleys, passages,
sewer rights, waters, water courses, water rights, air rights,
development rights and powers, and, to the extent now or hereafter
owned by Trustor, all minerals, flowers, shrubs, crops, trees,
timber and other emblements now or hereafter appurtenant to, or
used in connection with, or located on, under or above the Land or
any part or parcel thereof, and all “as extracted
collateral” (as defined in the UCC), and all ground leases,
subleases, estates, rights, titles, interests, privileges,
liberties, tenements, hereditaments and appurtenances, reversions,
and remainders whatsoever, in any way belonging, relating or
appertaining to the Land or any part thereof.
“Contracts” means, collectively, (a) all contracts between
Trustor and third parties in connection with the management,
construction, repair, renovation, use, operation or maintenance of
the Mortgaged Property, in each case as the same may thereafter
from time to time be amended or modified; and (b) all warranties,
guarantees, and other rights of Trustor, direct and indirect,
against manufacturers, dealers, suppliers, and others in connection
with the above
contracts and
agreement or the work done or to be done and the materials supplied
or to be supplied to or for the Mortgaged Property.
“Equipment” means all of Trustor’s
“equipment,” as such term is defined in the UCC, and,
to the extent not included in such definition, all fixtures,
appliances, machinery, “software” (as defined in the
UCC), furniture, furnishings, decorations, tools and supplies, now
owned or hereafter acquired by Trustor, including without
limitation, all beds, linens, radios, televisions, carpeting,
telephones, cash registers, computers, electronic data-processing
or other office equipment, lamps, glassware, restaurant and kitchen
equipment, and building equipment, including, without limitation,
all heating, lighting, incinerating, waste removal and power
equipment, engines, pipes, tanks, motors, conduits, switchboards,
security and alarm systems, plumbing, lifting, cleaning, fire
prevention, fire extinguishing, refrigeration, washing machines,
dryers, stoves, refrigerators, ventilating, and communications
apparatus, air cooling and air conditioning apparatus, escalators,
elevators, ducts, and compressors, materials and supplies, and all
other machinery, apparatus, equipment, fixtures and fittings now
owned or hereafter acquired by Trustor to the extent that the same
are located at the Mortgaged Property, any portion thereof or any
appurtenances thereto, together with all additions, replacements,
parts, fittings, accessions, attachments, accessories,
modifications and alterations of any of the foregoing.
“General Intangibles”
means all of Trustor’s
“general intangibles,” as such term is defined in the
UCC, and, to the extent not included in such definition, all
intangible personal property of Trustor (other than Accounts,
Rents, Instruments, Inventory, money and Permits), including,
without limitation, choses in action, settlements, judgments,
contract rights, rights to performance (including, without
limitation, rights under warranties) refunds of real estate taxes
and assessments and other rights to payment of money, copyrights,
trademarks, trade names, service marks, trade secrets, and patents,
the goodwill associated with any of the foregoing, and all
applications for any of the foregoing, in each case whether now
existing or hereafter in existence, in each case to the extent that
such General Intangibles are related to the Mortgaged
Property.
“Improvements”
means all buildings, structures and
improvements of every nature whatsoever situated on the Land on the
Closing Date or thereafter, including, without limitation, to the
extent of Trustor’s right, title or interest therein or
thereto, all gas and electric fixtures, radiators, heaters, washing
machines, dryers, refrigerators, ovens, engines and machinery,
boilers, ranges, elevators and motors, plumbing and heating
fixtures, antennas, carpeting and other floor coverings, water
heaters, awnings and storm sashes, and cleaning apparatus which are
or shall be attached to the Land or said buildings, structures or
improvements.
“Leases” means all leases and other agreements or
arrangements, if any, affecting the use or occupancy of all or any
portion of the Mortgaged Property now in effect or hereafter
entered into (including all lettings, subleases, licenses,
concessions, tenancies and other occupancy agreements covering or
encumbering all or any portion of the Mortgaged Property), together
with any guarantees, supplements, amendments, modifications,
extensions and renewals of the same.
“Permits” means all licenses, registrations, permits,
allocations, filings, authorizations, approvals and certificates
used in connection with the ownership, operation,
construction,
renovation, use
or occupancy of the Mortgaged Property, including, without
limitation, building permits, business licenses, state health
department licenses, food service licenses, liquor licenses,
licenses to conduct business and all such other permits, licenses
and rights, obtained from any governmental authority or private
person concerning the ownership, construction, operation,
renovation, use or occupancy of the Mortgaged Property.
“Proceeds” means all of Trustor’s
“proceeds” as such term is defined in the UCC and, to
the extent not included in such definition, all proceeds, whether
cash or non-cash, movable or immovable, tangible or intangible
(including insurance proceeds, condemnation proceeds, and proceeds
of proceeds), from the Security Interest Property, including,
without limitation, those from the sale, exchange, transfer,
collection, loss, damage, disposition, substitution or replacement
of any of the Security Interest Property and all income, gain,
credit, distributions and similar items from or with respect to the
Security Interest Property.
“Rents” means, with respect to the Mortgaged Property,
all rents (whether denoted as advance rent, minimum rent,
percentage rent, additional rent or otherwise), receipts, issues,
income, royalties, profits, revenues, proceeds, bonuses, deposits
(whether denoted as security deposits or otherwise), lease
termination fees or payments, rejection damages, buy-out fees and
any other fees made or to be made in lieu of rent, any award made
hereafter to Trustor in any court proceeding involving any tenant,
lessee, licensee or concessionaire under any of the Leases in any
bankruptcy, insolvency or reorganization proceedings in any state
or federal court, and all other payments, rights and benefits of
whatever nature from time to time due under the Leases.
“UCC” means the Uniform Commercial Code in effect in
the jurisdiction in which the Mortgaged Property or any of the
Security Interest Property is located, as applicable.
ARTICLE 2
COVENANTS AND AGREEMENTS OF
TRUSTOR
Section 2.1. Payment of Secured Loan
Obligations; Incorporation by Reference. Trustor shall pay when
due the principal, interest thereon and all other sums, charges,
fees and other Loan Obligations due and/or payable under any Loan
Document all as in accordance with the Loan Documents. All of the
covenants, conditions and agreements contained in the Loan
Documents are hereby made a part of this Deed of Trust to the same
extent and with the same force as if fully set forth
herein.
Section 2.2. No Transfer. Trustor shall
not and shall not cause, allow, or permit, and shall prevent from
occurring, a transfer of the Mortgaged Property, except as
expressly permitted pursuant to the Note. In the event of any
violation of this Section 2.2, Beneficiary may, at its
option, accelerate and declare the outstanding Debt immediately due
and payable, without notice or demand, and whether or not
Beneficiary shall have commenced any foreclosure proceeding or
other action for the enforcement of its rights and remedies under
any Loan Document with respect to any Mortgaged Property or all or
any portion of the Security Interest Property.
Section 2.3.
Duty to Defend; Filing; Re-Filing; Etc.
(a) Trustor will
forever defend the title to the Mortgaged Property and the validity
and priority of the lien or estate hereof against the claims and
demands of all persons whomsoever.
(b) Trustor shall
execute, acknowledge and deliver, from time to time, such further
instruments as Trustee or Beneficiary may reasonably require to
accomplish the purposes of this Deed of Trust. Trustor hereby
irrevocably authorizes and appoints Beneficiary as its
attorney-infact, coupled with an interest, for the purpose of
exercising and perfecting any and all rights and remedies available
to Beneficiary at law and in equity, including, without limitation,
such rights and remedies available to Beneficiary pursuant to this
Deed of Trust.
(c) Trustor shall pay
all intangible taxes, recording taxes, filing, registration and
recording fees, all refiling, re-registration and re-recording
fees, and all expenses incident to the execution, filing, recording
and acknowledgment of this Deed of Trust, any security agreement,
mortgage, modification or amendment supplemental hereto and any
document, instrument and agreement of further assurance, and all
federal, state, county and municipal stamp taxes and other taxes,
duties, imposts, assessments and charges arising out of the
execution, delivery, filing, registration and recording of the
Note, this Deed of Trust or any of the other Loan Documents, any
security agreement or mortgage or deed of trust modification or
amendment supplemental hereto or any document instrument or
agreement of further assurance.
(d) Trustor hereby
indemnifies and holds Beneficiary harmless from any sales or use
tax that may be imposed on Beneficiary by virtue of the Loan other
than taxes imposed on the income, stock or assets of
Beneficiary.
ARTICLE 3
ASSIGNMENT OF RENTS, ISSUES, PROFITS
AND CONTRACTS
Section 3.1. Assignment of Rents, Issues and
Profits. Trustor hereby absolutely and unconditionally assigns
to Beneficiary all of Trustor’s right, title and interest in
all current and future Leases and Rents, it being intended that
this Deed of Trust constitute a present, absolute assignment and
not an assignment for additional security only. This Article
3 presently gives Beneficiary the right to collect Rents and to
apply Rents in partial payment of the Loan Obligations and
otherwise in accordance with the Note. Trustor intends that the
Rents and Leases be absolutely assigned and no longer be, during
the term of this Deed of Trust, property of Trustor or
Trustor’s estate, as defined by 11 U.S.C. §541. If any
law exists requiring Beneficiary to take actual possession of the
Mortgaged Property (or some action equivalent to taking possession
of the Mortgaged Property, such as securing the appointment of a
receiver) for Beneficiary to “perfect” or
“activate” the rights and remedies of Beneficiary as
provided herein, Trustor waives the benefit of such law. Such
assignment to Beneficiary shall not be construed to bind
Beneficiary to perform any covenants, conditions or provisions
contained in any Lease or otherwise impose any obligation upon
Beneficiary, and notwithstanding this Deed of Trust, Trustor shall
remain liable for any obligations undertaken by Trustor pursuant to
any Lease. Subject to the terms of this Article 3 and the
Note, Beneficiary grants to Trustor a license, revocable as
hereinafter provided, to operate and manage the Mortgaged Property
and to collect
and use the
Rents. If an Event of Default occurs, the license granted to
Trustor herein may, at Beneficiary’s election, be revoked by
Beneficiary, and Beneficiary shall immediately be entitled to
possession of all Rents then or thereafter payable (including Rents
past due and unpaid) whether or not Beneficiary enters upon or
takes control of the Mortgaged Property. Any Rents collected by
Trustor from and after the date on which an Event of Default
occurred and is continuing shall be held by Trustor in trust for
Beneficiary. Trustor hereby grants and assigns to Beneficiary the
right, at Beneficiary’s option, upon revocation of the
license granted herein, to enter upon the Mortgaged Property in
person, by agent or by court appointed receiver to collect Rents
with or without taking the actual possession of the Mortgaged
Property or any equivalent action. Beneficiary may apply any Rents
collected after the license granted herein is revoked in
Beneficiary’s sole and absolute discretion to pay the Loan
Obligations in such order and in such manner as Beneficiary shall
elect.
Section 3.2. Assignment of Contracts.
Trustor hereby absolutely and unconditionally assigns to
Beneficiary all of Trustor’s right, title and interest in and
to the Contracts to the maximum extent allowable by law and to the
maximum extent allowable under the terms of each individual
Contract, it being intended that this assignment be an absolute
assignment from Trustor to Beneficiary and not merely the granting
of a security interest. Until the occurrence of an Event of
Default, Trustor may retain, use and enjoy the benefits of the
Contracts. Upon the occurrence and during the continuance of an
Event of Default, the license described in the preceding sentence
shall, upon Beneficiary’s election, be automatically revoked,
and Beneficiary may elect to exercise any and all of
Beneficiary’s rights and remedies hereunder.
ARTICLE 4
SECURITY AGREEMENT AND FIXTURE
FILING
As additional security, Trustor, as debtor,
hereby grants to Beneficiary, as secured party, a continuing
security interest in the portion of the Mortgaged Property which is
or may be subject to the provisions of the UCC which are applicable
to secured transactions, and in any property as to which a security
interest can be created or perfected, now existing or hereafter
coming into existence, and all substitutions replacements, renewals
and additions to and all products and Proceeds of the foregoing
(collectively, the “Security Interest
Property”). This Deed of Trust is intended to be and
shall be effective as a security agreement and “fixture
filing” under the UCC or other law applicable to the creation
of liens on and security interests in personal property and
fixtures. As further security for the payment and performance of
the Loan Obligations, this Deed of Trust shall constitute a
financing statement under the UCC with Trustor, as debtor, and
Beneficiary, as secured party. To the extent permitted by law,
Trustor hereby authorizes Beneficiary to file financing and
continuation statements necessary to cont
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