Document:

www.EXFILE.com 888.775-4789   ZAP - FORM 8K

    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

     

    
      	
               

              Space
      Above This Line For Recorder’s Use

            

    

     

    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)

     

     

    
    

     

    
      	Dated:	
              As of
      July 30, 2008

            
	 	 
	Location:	
              501
      Fourth Street

              Santa Rosa

              Sonoma County, California
  95401

            

    

     

     

     

                         

     

                        

     

     

    
 

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    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

     

     

    
      
        
        

      

      
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    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,

    
 

    
 

    
      
        
        

      

      
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    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.

    

     

    
      
        
        

      

      
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    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

    

     

    
      
        
        

      

      
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    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 continue the lien of and security
interest evidenced by this Deed of Trust with respect to the Security Interest
Property (and confirms that Beneficiary is a person entitled to file a record,
and that Trustor has authorized all such filings, within the meaning of Section
9-509 of the UCC). The principal places of business and mailing addresses of
Trustor, as debtor, and Beneficiary, as secured party, respectively, are as set
forth on page one hereof. Trustor’s location, for purposes of Section 9-307 of
the UCC, is Trustor’s state of incorporation as set forth on page 1 hereof.
Information relative to the security interest created hereby may be obtained by
application to Beneficiary.

    

     

    
      
        
        

      

      
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    ARTICLE
5

    REMEDIES

     

    Section
5.1. Acceleration of
Maturity. If an Event of Default shall have occurred, then the entire
Debt and all other Loan Obligations shall, at the option of Beneficiary, become
due and payable without notice or demand, time being of the essence; and any
omission on the part of Beneficiary to exercise such option when entitled to do
so shall not be considered as a waiver of such right. Trustor hereby expressly
waives presentment, demand for payment, notice of protest, notice of dishonor,
notice of intent to accelerate the maturity of the Debt and notice of
acceleration of the maturity of the indebtedness secured hereby.

     

    Section
5.2. Default
Remedies.

     

    (a) If an
Event of Default shall have occurred and be continuing, this Deed of Trust may,
to the maximum extent permitted by law, be enforced, and Beneficiary, or Trustee
in response to Beneficiary’s request (which Trustor agrees shall be presumed to
have been made), may exercise any right, power or remedy permitted to it
hereunder, under the Note or under any of the other Loan Documents or at law or
in equity, and, without limiting the generality of the foregoing, Trustee or
Beneficiary may, personally or by their agents, to the maximum extent permitted
by law:

     

    (i) enter
into and take possession of the Mortgaged Property or any part thereof, exclude
Trustor and all persons claiming under Trustor whose claims are junior to this
Deed of Trust, wholly or partly therefrom, and use, operate, manage and control
the Mortgaged Property or any part thereof either in the name of Trustor or
otherwise as Beneficiary shall deem best, and upon such entry, from time to time
at the expense of Trustor and the Mortgaged Property, make all such repairs,
replacements, alterations, additions or improvements to the Mortgaged Property
or any part thereof as Beneficiary may reasonably deem proper and, whether or
not Beneficiary has so entered and taken possession of the Mortgaged Property or
any part thereof, collect and receive all Rents and apply the same to the
payment of all expenses that Trustee or Beneficiary may be authorized to make
under this Deed of Trust, the remainder to be applied to the payment of the Loan
Obligations until the same shall have been repaid in full, take possession of
all security deposits held with respect to the Mortgaged Property, whether or
not Trustee or Beneficiary enters upon or takes control of the Mortgaged
Property and regardless of where any such security deposits are deposited or
located; if Beneficiary demands or attempts to take possession of the Mortgaged
Property or any part thereof in the exercise of any rights hereunder, Trustor
shall promptly turn over and deliver complete possession thereof to
Beneficiary;

     

    (ii) effect
new Permits and Contracts; amend, alter, renew, cancel or surrender existing
Permits and Contracts; and make concessions to the governmental authorities, the
Contractors, warrantors and others; and

     

    (iii) personally
or by agents, with or without entry:

    
 

     

    
 

    
      
        
        

      

      
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    (x) invoke
the power of sale and pursuant to the procedures prescribed by law as a result
thereof, sell the Mortgaged Property or any part thereof, or cause the Mortgaged
Property or any part thereof to be sold at a sale or sales held at such place or
places and time or times and upon such notice and otherwise in such manner and
in such order as may be required by law, or, in the absence of any such
requirements, as Beneficiary may deem appropriate and from time to time adjourn
any such sale by announcement at the time and place specified for such sale or
for such adjourned sale without further notice, except such as may be required
by law;

     

    (y) proceed
to protect and enforce Beneficiary’s rights under this Deed of Trust, by suit
for specific performance of any covenant contained herein or in the Loan
Documents or in aid of the execution of any power granted herein or in the Loan
Documents, or for the foreclosure of this Deed of Trust (as a mortgage or
otherwise) and the sale of the Mortgaged Property or any part thereof under the
judgment or decree of a court of competent jurisdiction, or for the enforcement
of any other right as Beneficiary shall elect, provided, that in the event of a
sale, by foreclosure or otherwise, of less than all of the Mortgaged Property,
this Deed of Trust shall continue as a lien on, and security interest in, the
remaining portion of the Mortgaged Property; or

     

    (z) exercise
any or all of the remedies available to a secured party under the UCC,
including, without limitation:

     

    (1) either
personally or by means of a court appointed receiver, take possession of all or
any of the Security Interest Property and exclude therefrom Trustor and all
persons claiming under Trustor, and thereafter hold, store, use, operate,
manage, maintain and control, make repairs, replacements, alterations, additions
and improvements to and exercise all rights and powers of Trustor in respect of
the Security Interest Property, or any part thereof; if Beneficiary demands or
attempts to take possession of the Security Interest Property in the exercise of
any rights hereunder, Trustor shall promptly turn over and deliver complete
possession thereof to Beneficiary;

     

    (2) without
further notice to or demand upon Trustor (except those otherwise required hereby
or by the Note), make such payments and do such acts as Trustee or Beneficiary
may deem necessary to protect its security interest in the Security Interest
Property, including, without limitation, paying, purchasing, contesting or
compromising any encumbrance that is prior to or superior to the security
interest granted hereunder, and in exercising any such powers or authority
paying all expenses incurred in connection therewith, which expenses shall
thereafter become part of the Loan Obligations secured by the lien of this Deed
of Trust;

     

    (3) require
Trustor to assemble the Security Interest Property or any portion thereof, at a
place designated by Trustee or Beneficiary and reasonably convenient to both
parties, and promptly to deliver the Security Interest Property to Beneficiary,
or an agent or representative designated by Beneficiary, and its agents and
representatives, shall have the right to enter upon the premises and property of
Trustor to exercise Beneficiary’s rights hereunder;

    

     

    
      
        
        

      

      
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    (4) sell,
lease or otherwise dispose of the Security Interest Property, with or without
having the Security Interest Property at the place of sale, and upon such terms
and in such manner as Beneficiary may determine (and Beneficiary may be a
purchaser at any such sale, provided, however, that Trustee, at the request and
direction of Beneficiary, may dispose of the Security Interest Property in
accordance with Beneficiary’s rights and remedies in respect of the Mortgaged
Property pursuant to the provisions of this Deed of Trust in lieu of proceeding
under the UCC); and

     

    (5) unless
the Security Interest Property is perishable or threatens to decline speedily in
value or is of a type customarily sold on a recognized market, Beneficiary, as
the case may be, shall give Trustor at least ten (10) days prior notice of the
time and place of any sale of the Security Interest Property or other intended
disposition thereof, which notice Trustor agrees is commercially
reasonable.

     

    (b) If an
Event of Default shall have occurred, Beneficiary, to the maximum extent
permitted by law, shall be entitled, as a matter of right, to the appointment of
a receiver of the Mortgaged Property, without notice or demand, and without
regard to the adequacy of the security for the Loan Obligations or the solvency
of Trustor. Trustor hereby irrevocably consents to such appointment and waives
notice of any application therefor. Any such receiver or receivers shall have
all the usual powers and duties of receivers in like or similar cases and all
the powers and duties of Beneficiary in case of entry and shall continue as such
and exercise all such powers until the date of confirmation of sale of the
Mortgaged Property, unless such receivership is sooner terminated.

     

    (c) In any
sale under any provision of this Deed of Trust or pursuant to any judgment or
decree of court, the Mortgaged Property, to the maximum extent permitted by law,
may be sold in one or more parcels or as an entirety and in such order as
Beneficiary may elect, without regard to the right of Trustor or any person
claiming under Trustor to the marshalling of assets. The purchaser at any such
sale shall take title to the Mortgaged Property or the part thereof so sold free
and discharged of the estate of Trustor therein, the purchaser being hereby
discharged from all liability to see to the application of the purchase money.
Upon the completion of any such sale by virtue of this Section 5.2(c),
Trustee or Beneficiary, as the case may be, shall execute and deliver to the
purchaser an appropriate instrument that shall effectively transfer all of
Trustor’s estate, right, title, interest, property, claim and demand in and to
the Mortgaged Property or portion thereof so sold, but without any covenant or
warranty, express or implied. Trustor shall ratify and confirm, or cause to be
ratified and confirmed, any such sale or sales by executing and delivering, or
by causing to be executed and delivered to Beneficiary or to such purchaser or
purchasers all such instruments as may be advisable, in the reasonable judgment
of Beneficiary, for such purpose, and as may be designated in such request. Any
sale or sales made under or by virtue of this Deed of Trust, to the extent not
prohibited by law, shall operate to divest all the estate, right, title,
interest, property, claim and demand whatsoever, whether at law or in equity, of
Trustor in, to and under the Mortgaged Property, or any portions thereof so
sold, and shall be a perpetual bar both at law and in equity against Trustor and
against any and all persons claiming or who may claim the same, or any part
thereof, by, through or under Trustor. The powers and agency herein granted are
coupled with an interest and are irrevocable.

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (d) All
rights of action under any Loan Document may be enforced by Trustee or
Beneficiary without the possession of the original Loan Documents and without
the production thereof at any trial or other proceeding relative
thereto.

     

    Section
5.3. Application of
Proceeds.

     

    (a) All
proceeds of any repayment of or recoveries on the Loan shall be applied to repay
the Debt in such order and in such manner as Beneficiary shall elect in
Beneficiary’s discretion.

     

    (b) No sale
or other disposition of all or any part of the Mortgaged Property pursuant to
this Section
5.3 shall be deemed to relieve Trustor of its obligations under any Loan
Document except to the extent the proceeds thereof are applied to the payment of
such obligations. If the proceeds of sale, collection or other realization of or
upon the Mortgaged Property are insufficient to cover the costs and expenses of
such realization and the payment in full of the Loan Obligations, Trustor shall
remain liable for any deficiency subject to Section
7.11.

     

    (c) Upon any
sale made under the powers of sale herein granted and conferred, the receipt
given by Beneficiary (or Trustee) will be sufficient discharge to the purchaser
or purchasers at any sale for the purchase money, and such purchaser or
purchasers and their heirs, devisees, personal representatives, successors and
assigns thereof will not, after paying such purchase money and receiving such
receipt of Beneficiary, be obligated to see to the application thereof or be in
any way answerable for any loss, misapplication or non-application
thereof.

     

    Section
5.4. Powers of
Beneficiary. Beneficiary may at any time or from time to time renew or
extend (and direct Trustee to renew or extend) this Deed of Trust or (with the
agreement of Trustor) alter or modify the same in any way, or waive any of the
terms, covenants or conditions hereof or thereof, in whole or in part, and may
release or reconvey, or cause Trustee to release or reconvey, any portion of the
Mortgaged Property or any other security, and grant such extensions and
indulgences in relation to the Loan Obligations, or release any person liable
therefor as Beneficiary may determine without the consent of any junior lienor
or encumbrancer, without any obligation to give notice of any kind thereto,
without in any manner affecting the priority of the lien and estate of this Deed
of Trust on or in any part of the Mortgaged Property, and without affecting the
liability of any other person liable for any of the Loan
Obligations.

     

    Section
5.5. Right to
Sue. Trustee and Beneficiary shall each have the right from time to time
to sue for any sums required to be paid by Trustor under the terms of this Deed
of Trust as the same become due, without regard to whether or not the entire
Loan Obligations shall be, or have become, due and without prejudice to the
right of Beneficiary thereafter to bring any action or proceeding of foreclosure
or any other action upon the occurrence of any Event of Default existing at the
time such earlier action was commenced.

     

    Section
5.6. Remedies
Cumulative.

     

    (a)   No
right or remedy herein conferred upon or reserved to Trustee or Beneficiary is
intended to be exclusive of any other right or remedy, and each and every right
and remedy shall

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    be
cumulative and in addition to any other right or remedy under this Deed of
Trust, or under applicable law, whether now or hereafter existing; the failure
of Trustee or Beneficiary to insist at any time upon the strict observance or
performance of any of the provisions of this Deed of Trust or to exercise any
right or remedy provided for herein or under applicable law, shall not impair
any such right or remedy nor be construed as a waiver or relinquishment
thereof.

     

    (b) To
the maximum extent permitted by law, Trustee and Beneficiary shall each be
entitled to enforce payment and performance of any of the obligations of Trustor
and to exercise all rights and powers under this Deed of Trust or under any Loan
Document or any laws now or hereafter in force, notwithstanding that some or all
of the Loan Obligations may now or hereafter be otherwise secured, whether by
mortgage, deed of trust, pledge, lien, assignment or otherwise; neither the
acceptance of this Deed of Trust nor its enforcement, whether by court action or
pursuant to the power of sale or other powers herein contained, shall prejudice
or in any manner affect the right of either Trustee or Beneficiary to realize
upon or enforce any other security now or hereafter held by Trustee or
Beneficiary, it being stipulated that Trustee and Beneficiary shall be entitled
to enforce this Deed of Trust and any other security now or hereafter held by
Trustee or Beneficiary in such order and manner as Beneficiary, in its
discretion, may determine; every power or remedy given by any Loan Documents to
Trustee or Beneficiary, or to which Trustee or Beneficiary is otherwise
entitled, may be exercised, concurrently or independently, from time to time and
as often as may be deemed expedient by Beneficiary, and Trustee or Beneficiary
may pursue inconsistent remedies.

     

    Section
5.7. Waiver of Stay,
Extension, Moratorium Laws; Equity of Redemption. To the maximum extent
permitted by law, Trustor shall not at any time insist upon, or plead, or in any
manner whatsoever claim or take any benefit or advantage of any applicable
present or future stay, extension or moratorium law, that may affect observance
or performance of the provisions of this Deed of Trust; nor claim, take or
insist upon any benefit or advantage of any present or future law providing for
the valuation or appraisal of the Mortgaged Property or any portion thereof
prior to any sale or sales thereof that may be made under or by virtue of Section 5.2; and
Trustor, to the maximum extent permitted by law, hereby waives all benefit or
advantage of any such law or laws. Trustor, for itself and all who may claim
under it, hereby waives, to the maximum extent permitted by law, any and all
rights and equities of redemption from sale under the power of sale created
hereunder or from sale under any foreclosure of this Deed of Trust and (if an
Event of Default shall have occurred) all notice or notices of seizure, and all
right to have the Mortgaged Property marshalled upon any foreclosure hereof.
Neither Trustee nor Beneficiary shall be obligated to pursue or exhaust their
rights or remedies as against any other part of the Mortgaged Property, and
Trustor hereby waives any right or claim of right to have Trustee or Beneficiary
proceed in any particular order.

     

    Section
5.8. Waiver of
Homestead. Trustor hereby waives and renounces all homestead and
exemption rights provided for by the Constitution and the laws of the United
States and of any state, in and to the Mortgaged Property as against the
collection of the Loan Obligations, or any part thereof.

     

    Section
5.9. No Assumption by
Beneficiary. Except as otherwise expressly set forth in any Loan
Document, Beneficiary will not be deemed in any manner to have assumed any
liabilities or obligations relating to the Mortgaged Property or any portion
thereof. Trustor

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    agrees
that the exercise by Beneficiary of one or more of its rights and remedies under
this Deed of Trust shall in no way be deemed or construed to make Beneficiary a
mortgagee-in-possession.

     

    Section
5.10. Discontinuance
of Proceedings. If either Trustee or Beneficiary shall have proceeded to
enforce any right, power or remedy under this Deed of Trust by foreclosure,
power of sale, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to Beneficiary, then in every such case, Trustor, Trustee and
Beneficiary shall be restored to their former positions and rights hereunder,
and all rights, powers and remedies of Trustee and Beneficiary shall continue as
if no such proceedings had occurred.

     

     

    ARTICLE
6

    TRUSTEE

     

    Section
6.1. Trustee’s
Powers. At any time, or from time to time without liability therefor and
without notice, upon written request of Beneficiary and presentation of this
Deed of Trust and the Note secured hereby for endorsement, and without affecting
the personal liability of any person for payment of the indebtedness secured
hereby or the effect of this Deed of Trust upon the remainder of the Mortgaged
Property, Trustee may (a) reconvey any part of the Mortgaged Property, (b)
consent in writing to the making of any map or plat thereof, (c) join in
granting any easement thereon, or (d) join in any extension agreement or any
agreement subordinating the lien or charge hereof.

     

    Section
6.2. Trustee’s
Fees. No fees or expenses shall become payable to Trustee under this Deed
of Trust other than those reasonable fees and expenses incurred by Trustee in
connection with the reconveyance of the Mortgaged Property pursuant to Section 6.3, or the
exercise by Trustee of any remedy permitted to it hereunder, under the Note or
under any of the other Loan Documents or at law or in equity. Trustor shall pay
all such reasonable fees and expenses incurred by Trustee and Trustee’s agents
and counsel in connection with the foregoing and all such costs, fees and
expenses shall be secured by this Deed of Trust.

     

    Section
6.3. Full Reconveyance
by Trustee. To the extent Trustee’s signature is necessary on any full
reconveyance of this Deed of Trust then, upon written request of Beneficiary
stating that all sums secured hereby have been paid and upon surrender of this
Deed of Trust and the Note to Trustee for cancellation and retention (or
disposal in accordance with applicable law) and upon payment by Trustor of
Trustee’s fees, Trustee shall reconvey to Trustor, or to the person or persons
legally entitled thereto, without warranty, any portion of the Mortgaged
Property then held hereunder. The recitals in such reconveyance of any matters
or facts shall be conclusive proof of the truthfulness thereof. The grantee in
any reconveyance may be described as “the person or persons legally entitled
thereto”.

     

    Section
6.4. Indemnity.
Trustor shall indemnify Trustee against all claims, actions, liabilities,
judgments, costs, attorneys’ fees or other charges of whatsoever kind or nature
made against or incurred by Trustee, and arising out of the performance by
Trustee of the duties of Trustee hereunder, other than those arising solely due
to Trustee’s gross negligence or wanton or willful
misconduct.

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    Section
6.5. Successor
Trustee. Trustee may resign in writing addressed to Beneficiary or be
removed at any time with or without cause by an instrument in writing duly
executed by Beneficiary and recorded in the office of the county recorder where
the Land is situated. In case of the death, resignation or removal of Trustee, a
successor Trustee may be appointed by Beneficiary without other formality than
an appointment and designation in writing unless otherwise required by
applicable law. Such appointment and designation will be full evidence of the
right and authority to make the same and of all facts therein recited, and upon
the making of any such appointment and designation, this Deed of Trust will vest
in the named successor trustee all the right, title and interest of Trustee in
the Mortgaged Property, and said successor will thereupon succeed to all the
rights, powers, privileges, immunities and duties hereby conferred upon Trustee;
provided, however, that Beneficiary may at its option, appoint and designate
several successor trustees, and in such manner, appoint and designate a
different successor trustee for each county wherein a portion of the Mortgaged
Property is located, as described in such written appointment and designation,
and upon the making of any such appointment and designation, this Deed of Trust
will vest in each such named successor trustee all of the right, title and
interest of Trustee in that portion of the Mortgaged Property ascribed to such
named successor trustee, and each such named successor trustee will thereupon
succeed to all the rights, powers, privileges, immunities and duties hereby
conferred upon Trustee in that portion of the Mortgaged Property ascribed to
such named successor trustee. All references herein to Trustee will be deemed to
refer to the trustee or trustees from time to time acting
hereunder.

     

     

    ARTICLE
7

    MISCELLANEOUS

     

    Section
7.1. Captions.
The captions or headings at the beginning of each Article and Section hereof are
for the convenience of the parties hereto and are not a part of this Deed of
Trust.

     

    Section
7.2. Amendments;
Waivers; Etc. This Deed of Trust cannot be modified, changed or
discharged except by an agreement in writing, duly acknowledged in proper form
for recording, signed by Trustor and Beneficiary.

     

    Section
7.3. Successors and
Assigns. This Deed of Trust applies to, inures to the benefit of and
binds Trustor and Beneficiary and each of their respective successors and
assigns, and shall run with the Land.

     

    Section
7.4. Notices.
All notices, demands, consents, requests or other communications that are
permitted or required to be given by any party to the other hereunder shall be
in writing and delivered or mailed to each party at the following
addresses:

     

    
    

     

    
      	
              (a)     
      

            	
              If to the
      Trustor:

               

              
                Zap

                501
      4th
      Street

                Santa
      Rosa, California, 95401

              

            

    

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

       

      
        	
                (b)     
      

              	
                If to the
      Trustee:

                 

                
                  
                    Fidelity
      National Title Company

                    400
      Pitt Avenue

                    Sebastopol,
      California 95472

                  

                

              

      

       

    

     

    
       

      
        	
                (c)     
      

              	
                If to the
      Beneficiary:

                 

                
                  Al
      Yousuf LLC

                  c/o
      Dewey & LeBoeuf LLP

                  333
      South Grand Avenue, Suite 2600

                  Los
      Angeles, California 90071-1530

                  Attention:
      Michael du Quesnay

                   

                  With
      an additional copy to:

                   

                  Al
      Yousuf LLC

                  Mezzanine
      Floor

                  Yamaha
      Showroom

                  Sheikh
      Zayed Road

                  Dubai,
      United Arab Emirates

                  Attention:
      Iqbal al Yousuf

                

              

      

       

       

    

    Section
7.5. Time of the
Essence. Time is of the essence with respect to each and every covenant,
agreement and obligation of Trustor under all Loan Documents.

     

    Section
7.6. Applicable
Law. This Deed of Trust shall be governed by and construed in accordance
with the laws of the state in which the Mortgaged Property is
located.

     

    Section
7.7. Limitation of
Interest. This Deed of Trust is subject to the limitations on the payment
of interest set forth in the Note.

     

    Section
7.8. Severability. If any
term or provision of this Deed of Trust or the application thereof to any person
or circumstance shall to any extent be invalid or unenforceable, the remainder
of this Deed of Trust, or the application of such term or provision to persons
or circumstances other than those as to which it is invalid or unenforceable,
shall not be affected thereby, and each term and provision of this Deed of Trust
shall be valid and enforceable to the maximum extent permitted by law. If any
portion of the Loan Obligations shall for any reason not be secured by a valid
and enforceable lien upon any part of the Mortgaged Property, then any payments
made in respect of the Loan Obligations (whether voluntary or under foreclosure
or other enforcement action or procedure or otherwise) shall, for purposes of
this Deed of Trust (except to the extent otherwise required by applicable law)
be deemed to be made (a) first, in respect of the portion of the Loan
Obligations not secured by the lien of this Deed of Trust, (b) second, in
respect of the portion of the Loan Obligations secured by the lien of this Deed
of Trust, but which lien is on less than all of the Mortgaged Property, and (c)
last, to the portion of

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    the Loan
Obligations secured by the lien of this Deed of Trust, and which lien is on all
of the Mortgaged Property.

     

    Section
7.9. Reconveyance by
Beneficiary. Upon payment in full of the Loan Obligations, Beneficiary
(and Trustee, to the extent required by law to effect a full and proper
termination, release and reconveyance) shall release the lien of this Deed of
Trust, or upon the request of Trustor, and at Trustor’s expense, assign this
Deed of Trust without recourse to Trustor’s designee, or to the person or
persons legally entitled thereto, by an instrument duly acknowledged in proper
form for recording.

     

    Section
7.10. WAIVER OF JURY
TRIAL. TRUSTOR, TRUSTEE AND BENEFICIARY HEREBY WAIVE ANY RIGHT EITHER MAY
HAVE TO A TRIAL BY JURY ON ANY CLAIM, COUNTERCLAIM, SETOFF, DEMAND, ACTION OR
CAUSE OF ACTION (A) ARISING OUT OF OR IN ANY WAY RELATED TO THIS DEED OF TRUST
OR THE LOAN, OR (B) IN ANY WAY CONNECTED WITH OR PERTAINING OR RELATED TO OR
INCIDENTAL TO ANY DEALINGS OF TRUSTOR, TRUSTEE AND/OR BENEFICIARY WITH RESPECT
TO ANY LOAN DOCUMENT OR THE EXERCISE OF ANY PARTY’S RIGHTS AND REMEDIES UNDER
THIS DEED OF TRUST OR OTHERWISE, OR THE CONDUCT OR THE RELATIONSHIP OF THE
PARTIES HERETO, IN ALL OF THE FOREGOING CASES WHETHER NOW EXISTING OR HEREAFTER
ARISING AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. EACH OF TRUSTOR,
TRUSTEE AND BENEFICIARY AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS DEED OF
TRUST WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY, AND
BARGAINED AGREEMENT OF TRUSTOR, TRUSTEE AND BENEFICIARY IRREVOCABLY TO WAIVE ITS
RIGHTS TO TRIAL BY JURY AS AN INDUCEMENT TO BENEFICIARY TO MAKE THE LOAN, AND
THAT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY DISPUTE OR CONTROVERSY
WHATSOEVER (WHETHER OR NOT MODIFIED HEREIN) BETWEEN TRUSTOR, TRUSTEE AND/OR
BENEFICIARY SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A
JUDGE SITTING WITHOUT A JURY.

     

    Section
7.11. Exhibits.
The information set forth on the cover, heading and recitals hereof, and the
Exhibits attached hereto, are hereby incorporated herein as a part of this Deed
of Trust with the same effect as if set forth in the body hereof.

     

    ARTICLE
8

    STATE-SPECIFIC
PROVISIONS

     

    Section
8.1. Principles of
Construction. In the event of any inconsistencies between the terms and
conditions of this Article 8 and the
other terms and conditions of this Security Instrument, the terms and conditions
of this Article
8 shall control and be binding.

     

    Section
8.2. Certain Matters
Relating to Property Located in the State of California. With respect to
the Mortgaged Property which is located in the State of California,
notwithstanding anything contained herein to the contrary (a) Trustor waives to
the extent permitted by law (i) the benefit of all laws now existing or that may
hereafter be enacted

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    providing
for any appraisal before sale of any portion of the Mortgaged Property, and (ii)
all rights of redemption, valuation, appraisal, stay of execution, foreclosure
of the liens hereby created, and (iii) all rights and remedies which Trustor may
have or be able to assert by reason of the laws of the State of California
pertaining to the rights and remedies of sureties; provided, however, nothing
contained herein shall be deemed to be a waiver of Trustor's rights under
Section 2924c of the California Civil Code.

     

     

     

     

     

     

     

     

    [Signatures
Commence on the Following Page]

    
 

    
 

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    IN
WITNESS WHEREOF, this Deed of Trust, Assignment of Leases and Rents, Security
Agreement and Fixture Filing has been duly executed by Trustor as of the day and
year first above written.

     

     

     

     

     

    TRUSTOR:

    ZAP, a
California corporation

     

    
      By: 
/s/ Steven
Schneider                       

       

      Name:
Steven
Schneider                         

       

      Title: 
CEO                                                 

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Deed of
Trust, Assignment of Leases and Rents,

    Security
Agreement and Fixture Filing

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ACKNOWLEDGMENT

     

    STATE OF
CALIFORNIA                               )

    COUNTY
OF                                                     
)

     

    On ______________________,
2008, before me, ______________________________________________________,
personally
appeared _____________________________________________________

     

    
      personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.

    

     

    
    

     

    WITNESS
my hand and official seal.

     

    
    

     

    
      	 	
              Signature

            	 
	 	 	
              Notary
      Public

            

    

     

     

    (seal)

     

     

     

     

     

     

     

     

     

     

     

     

    Deed of
Trust, Assignment of Leases and Rents,

    Security
Agreement and Fixture Filing

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
A

     

    LEGAL
DESCRIPTION OF MORTGAGED PROPERTY

     

    Lot 388,
the West one-half of Lot 389, the Southerly 40 feet of Lot 397 and the Southerly
40 feet of the West one-half of Lot 398, all in Block 12 of the Map of Santa
Rosa made by John A. Brewster, and recorded December 7, 1854 in Book 9 of Deeds,
at Page 1, Sonoma County Records.

    
 

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        A-1Exhibit 10.1

                                  PAUL G. LAIRD

                              EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the "Agreement"), effective as of the 1st day of
July 2008, is between New Frontier Energy, Inc., a Colorado corporation with its
principal place of business located at 1789 W. Littleton Blvd., Littleton,
Colorado 80120 (the "Company") and Paul G. Laird (the "Employee").

                                    RECITALS

     A.   The Company desires to be assured of the association and services of
          Employee for the Company.

     B.   Employee is willing and desires to be employed by the Company, and the
          Company is willing to employ Employee, upon the terms, covenants and
          conditions hereinafter set forth.

     C.   The Employee and the Company wish to cancel the employment agreement
          dated August 1, 2006 (the "Previous Employment Agreement") in its
          entirety and substitute this Agreement.

     NOW THEREFORE, in consideration of the Recitals and the mutual covenants,
promises, agreements, representations and warranties contained in this
Agreement, the parties hereby accept employment on the terms and conditions
hereinafter set forth.

     1. Employment. The Company hereby employs Employee as its President and
Chief Executive Officer of the Company.

     2. Term. The term of this Agreement shall be for a period of three (3)
years effective as of July 1, 2008 and ending on June 30, 2011 (the "Initial
Term"), unless terminated earlier pursuant to Section 10 below; provided,
however, that Employee's obligations in Section 11 below shall continue in
effect after such termination. This Agreement shall be automatically renewed for
successive one-year periods (the "Renewal Term") unless, at least 60 days prior
to the expiration of the Initial Term or any Renewal Term, either party gives
written notice to the other party specifically electing to terminate this
Agreement at the end of the Initial Term or any such Renewal Term.

<PAGE>
     3. Compensation.

     (a) Base Salary. For all services rendered by Employee under this
Agreement, the Company shall pay Employee a base salary of Two Hundred Fifty
Thousand Dollars ($250,000) per year (the "Base Salary"). The Base Salary shall
be payable in equal, consecutive monthly installments. Payment of the Salary
shall be subject to the customary withholding tax and other employment taxes as
required with respect to compensation paid by a corporation to an employee. It
is expressly understood and agreed that the Base Salary may be increased upon
the approval of the Company's Compensation Committee (if such a committee
exists) or of the Board of Directors. Furthermore, the Base Salary shall be
increased, effective on the 1st day of July of each year, beginning on July 1,
2009, for increases in the cost of living, based either on (i) inflation as
measured the federal Consumer Price Index ("CPI"), or (ii) Ten Thousand Dollars
($10,000) per year, whichever is greater. To determine the amount of the
increase in Base Salary using the CPI method, the Base Salary shall be
multiplied by a fraction, the numerator of which shall be the CPI most recently
published on the month immediately preceding the date of the Base Salary
adjustment, and the denominator of which shall be the CPI in effect on the last
day in June of the immediately preceding year. The term "Base Salary" as used
herein shall refer to the Base Salary, as adjusted.

     (b) Bonus. In addition to the Base Salary, the Company shall pay Employee
such Bonus or Bonuses as the Board of Directors shall determine in their sole
discretion.

     4. Reimbursement. The Employee is authorized to incur reasonable expenses
for promoting the business of the Company, including his out-of-pocket expenses
for entertainment, travel and similar items. The Company shall reimburse the
Employee for all such expenses on the presentation by the Employee, from time to
time, of an itemized account of such expenditures in accordance with the
guidelines set forth by the Internal Revenue Service for travel and
entertainment.

     5. Duties. Employee is engaged as the President and Chief Executive Officer
of the Company. Employees' duties shall include, but not be limited to those
duties that are generally associated with the positions of President and Chief
Executive Officer of a company similarly situated to the Company.

     6. Employee's Devotion of Time. Employee shall devote such productive time,
ability, and attention to the business of the Company during the term of this
agreement, as employee deems necessary to accomplish the duties assigned to him
and to the promotion and forwarding of the business affairs of the Company, and
not to divert any business opportunities from the Company to himself or to any
other person or business entity. Such services shall be rendered at such other
place or places as the Company shall in good faith require or as the interest,
needs, business or opportunity of the Company shall require. The Company
understands that Employee has other commitments and will not function
exclusively as the Company's employee; however, it is expected that the Employee
will devote significant time to the business of the Company.

     7. Benefits. The Employee shall be entitled to receive any and all health,
insurance, disability or any other benefit, if and when a plan is adopted by the
Board of Directors for the benefit of its employees.

<PAGE>
     8. Vacation. The Employee shall be entitled each year to a vacation of a
reasonable amount during which time his compensation shall be paid in full.

     9. Change of Control. If any time during the Initial Term or any Renewal
Term of this Agreement there is a Change of Control of the Company, as defined
below, and Employee's employment is terminated by the Company under Section
10.1(a), (b), (d) or (e) within the greater of one (1) year following the change
of control or the remaining term of this Agreement (the "Change of Control
Date"), the Company shall pay to Employee (a) the balance of all amounts due
under this Agreement from the date of the Change of Control until the end of the
Initial Term plus (b) an amount equal to 2.99 times the sum of (i) his annual
Base Salary as in effect on the date of termination plus (ii) the amount of
bonus paid in the prior year to Employee either pursuant to this Agreement or
the Previous Employment Agreement, and (c) any other amounts due to Employee
under any other provision of this Agreement. This amount shall be paid to
Employee in one lump sum as soon as practicable, but in no event later than one
hundred twenty (120) days, after the date that Employee's employment is
terminated. In addition to the lump sum payment referenced in the preceding
sentence, the Company shall pay to Employee any accrued and unpaid bonuses as
provided for in Section 3(b) at the same time as the lump sum payment is made.
Additionally, the Company will maintain and pay for Employee's health benefits
for the remaining Initial Term or the then in effect Renewal Term of this
Agreement. For example, if the Change of Control Date was July 1, 2008, the
amount paid to would be equal to [$250,000 (Base Salary) + $0 (Bonus)] X 3
(years remaining on contract)] + [$250,000 (Base Salary) + $180,000 (Bonus paid
during fiscal year ended February 28, 2008) X 2.99] or an aggregate of
$2,033,700).

     If any payment or distribution by the Company to Employee is determined to
be subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code, Employee is entitled to receive a payment on an after-tax basis equal to
the excise tax imposed. Employee is under no obligation to mitigate amounts
payable under these agreements.

     For purposes of this subsection, a change of control shall mean the
occurrence of one or more of the following three events:

     (1)  After the effective date of this Agreement, any person becomes a
          beneficial owner (as such term is defined in Rule 13d-3 promulgated
          under the Securities Exchange Act of 1934, as amended) directly or
          indirectly of securities representing 33% or more of the total number
          of votes that may be cast for the election of directors of the
          Company, provided however, that this provision shall not be applicable
          to Iris Energy Holdings Limited and its affiliates if, as a result of
          the conversion of any shares of the Company's 2.5% Series C Preferred
          Stock, or the exercise of the Company's AC Warrants or BC Warrants
          owned by Iris Energy Holdings Limited and its affiliates, Iris Energy
          Holdings Limited and its affiliates collectively become the beneficial
          owner directly or indirectly of securities representing 33% or more of
          the total number of votes that may be cast for the election of
          directors of the Company unless within one year following the
          acquisition of 33% or more of the total number of votes that may be
          cast for the election of directors of the Company by Iris Energy
          Holdings Limited and its affiliates, the individuals who were
          directors of the Company immediately prior thereto shall cease to
          constitute a majority of the Board of Directors;

<PAGE>

     (2)  Within one year after a merger, consolidation, liquidation or sale of
          assets involving the Company, or a contested election of a Company
          director, or any combination of the foregoing, the individuals who
          were directors of the Company immediately prior thereto shall cease to
          constitute a majority of the Board of Directors; or

     (3)  Within one year after a tender offer or exchange offer for voting
          securities of the Company, the individuals who were directors of the
          Company immediately prior thereto shall cease to constitute a majority
          of the Board of Directors.

     10.1 Termination and Bases for Termination.

     (a) Employee's employment hereunder may be terminated at any time by mutual
agreement of the parties.

     (b) Should the Employee, by reason of illness or incapacity, be unable to
perform his job for a period of up to and including a maximum of two (2) months,
the compensation payable for and during such period under this Agreement shall
be unabated. The Board of Directors shall have the right to determine the
incapacity of the Employee for the purposes of this provision, and any such
determination shall be evidenced by its written opinion delivered to the
Employee. Such written opinion shall specify with particularity the reasons
supporting such opinion and be manually signed by at least a majority of the
Board. Should the Board of Directors determine the Employee incapable of the
performance of his duties, the Employee's compensation thereafter shall be
terminated.

     The Employee shall begin to receive full compensation pursuant to Section 3
of this Agreement upon his return to employment and regular discharge of his
full duties hereunder. Should the Employee be absent from his employment for
whatever cause for a continuous period of more than 180 calendar days, the
Company may terminate this Agreement and all obligations of the Company
hereunder shall cease upon such termination.

     (c) Employee's employment may be terminated by the Company "with cause,"
effective upon delivery of written notice to Employee given at any time (without
any necessity for prior notice) if any of the following shall occur:

<PAGE>
          (1) any action by Employee which would be grounds for termination
     under applicable law (currently covering any willful breach of duty, and
     habitual neglect of duty);

          (2) any material breach of Executive's obligations under this
     Agreement other than any such breach resulting from illness or incapacity
     or

          (3) any material acts or events which inhibit Employee from fully
     performing his responsibilities to the Company in good faith, such as (i) a
     felony criminal conviction; (ii) any other criminal conviction involving
     Employee's lack of honesty or Employee's moral turpitude; (iii) drug or
     alcohol abuse; or (iv) acts of dishonesty, gross carelessness or gross
     misconduct.

     (d) Employee's employment may be terminated by the Company "without cause"
(for any reason or no reason at all) at any time by giving Employee 60 days
prior written notice of termination, which termination shall be effective on the
60th day following such notice. If Employee's employment under this Agreement is
so terminated, the Company shall (i) make a lump sum cash payment to Employee
within 10 days after termination is effective of an amount equal to (1)
Employee's Base Salary accrued to the date of termination; (2) unreimbursed
expenses accrued to the date of termination; (3) an amount equal to the greater
of (a) Employee's annual Base Salary (i.e., 12 months of Base Salary), or (b)
amounts remaining due to Employee as Base Salary (assuming that payments under
this Agreement were made until expiration of the Initial Term or if applicable
the Renewal Term), and (4) any other amounts due to Employee under any other
provision of this Agreement. For purposes of this provision, Employee's annual
Base Salary and the remaining portion of the term of the Agreement shall be
calculated as of the termination date. After the Company's termination of
Employee under this provision, the Company shall not be obligated to provide the
benefits to Employee described in Section 3 (except as may be required by law).
In addition to the lump sum payment referenced in this section, the Company
shall pay to Employee the Bonus provided for in Section 3(b) based upon the
number of days in the year that Employee was employed by the Company, within one
hundred twenty days after the end of the fiscal year in which Employee was
terminated.

     (e) Employee may terminate his employment hereunder by giving the Company
60 days prior written notice, which termination shall be effective on the 60th
day following such notice. The Company shall not be obligated to compensate
Employee, his estate or representatives after any such termination. Further,
Employee shall not be entitled to any of the benefits described in Section 3
(except as provided by law) after such termination.

     10.2 Payment Upon Termination. Upon termination under Sections 10.1(a),
(b), (c) or (e), the Company shall pay to Employee within 10 days after
termination an amount equal to the sum of (1) Employee's Base Salary accrued to
the date of termination; (2) unreimbursed expenses accrued to the date of
termination, and (3) any other amounts due to Employee under any other provision
of this Agreement. The Company shall not be obligated to compensate Employee,
his estate or representatives after any such termination. Further, Employee
shall not be entitled to any of the benefits described in Section 3 (except as
provided by law) after such termination.

<PAGE>

     10.3 Dismissal from Premises. At the Company's option, Employee shall
immediately leave the Company's premises on the date notice of termination is
given by either Employee or the Company.

     11. Confidential Information. During the term of this Agreement, the
Employee will have access to certain confidential information and materials,
including but not limited to oil and gas property and lease information,
originated by the Company or disclosed to the Company by others under agreements
to hold the same confidential ("Confidential Information"). Confidential
Information further includes, but is not limited to, all technical, engineering,
property and lease information, financial, business practices, customer lists,
customer identities and commercial information heretofore or hereafter disclosed
or transmitted by the Company in any form and manner to the Employee or
otherwise received by the Employee, whether orally or in writing. Employee
acknowledges that Employee shall not either directly or indirectly use, disclose
or communicate to any person or entity any Confidential Information for any
purpose at all whether during or after the term of this Agreement, except to the
extent any such information becomes generally known to the public through no
fault of Employee. Furthermore, the terms of this provision shall survive the
Term or any Renewal Term of this Agreement, or any termination thereof and will
expire two years from the termination of this agreement.

     12. Miscellaneous.

     (a) Entire Agreement. This Agreement contains the entire agreement between
the Company and the Employee, regarding employment of the Employee. This
Agreement shall not be modified except by written agreement signed by both
parties.

     (b) Headings. The subject headings of the articles and sections contained
in this Agreement are included for convenience purposes only and shall not
control or affect the meaning, construction or interpretation of any provision
hereof.

     (c) Assigns. This Agreement shall be binding upon the Company and Employee,
their respective heirs, executors, legal representatives, successors and
assigns.

     (d) Notices. All notices, demands, elections, opinions or requests (however
characterized or described) required or authorized hereunder shall be deemed
given sufficiently if in writing and sent by overnight courier or by registered
or certified mail, return receipt requested and postage prepaid, in the case of
the Company:

<PAGE>

                  New Frontier Energy, Inc.
                  1789 W. Littleton Blvd
                  Littleton, CO 80120

and in the case of the Employee:

                  Paul G. Laird
                  7430 S. Curtice Court
                  Littleton, CO 80120

     (e) Remedies. Employee acknowledges that any failure to carry out an
obligation under this Agreement, or a breach by the Employee of any provision
herein, will constitute immediate and irreparable damage to the Company, which
cannot be fully and adequately compensated in money damages and which will
warrant preliminary and other injunctive relief, an order for specific
performance, and other equitable relief. Employee also understands that other
actions may be taken and remedies enforced against the Employee, including
termination of any other agreements the Employee may have with the Company.

     (f) Waiver and Severability. No waiver by either party of any breach or
default hereof by the other shall be deemed to be a waiver of any preceding or
succeeding breach or default hereof, and no waiver shall be operative unless the
same shall be in writing. Should any provision of this Agreement be declared
invalid by a court of competent jurisdiction, the remaining provisions hereof
shall remain in full force and effect regardless of such declaration.

     (g) This Agreement shall be subject to the exclusive jurisdiction of the
courts in Arapahoe County in the State of Colorado. The parties to this
Agreement agree that any breach of any term or condition of this Agreement shall
be deemed to be a breach occurring in the State of Colorado by virtue of a
failure to perform an act required to be performed in the State of Colorado and
irrevocably and expressly agree to submit to the jurisdiction of the courts in
Arapahoe County in the State of Colorado for the purpose of resolving any
disputes among the parties relating to this Agreement or the transactions
contemplated hereby. The parties irrevocably waive, to the fullest extent
permitted by law, any objection which they may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement, or any judgment entered by any court in respect hereof brought
in the State of Colorado, and further irrevocably waive any claim that any suit,
action or proceeding brought in the State of Colorado has been brought in an
inconvenient forum.

     (h) Counterparts. This Agreement may be executed in several counterparts,
and as to executed shall constitute one Agreement, binding on all parties
hereto, notwithstanding that all parties are not signatory as to other original
or the same counterpart. Facsimile signatures are acceptable.

     (i) Time. Time is of the essence.

<PAGE>

     (j) Governing Law. This Agreement has been entered into and shall be
construed and enforced in accordance with the laws of the State of Colorado,
without reference to the choice of law principles thereof.

                [REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]

<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement effective on
the day and year first above written.

THE COMPANY:                                THE EMPLOYEE:

NEW FRONTIER ENERGY, INC.

By: /s/ Les Bates                           /s/ Paul G. Laird
    ----------------------                  -----------------------------------
    Les Bates, Secretary                    Paul G. Laird

<PAGE>

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