exv10w3






Exhibit 10.3




SETTLEMENT AGREEMENT




     THIS SETTLEMENT AGREEMENT (the “Agreement”) is made and dated as of September 3, 2009, by and
between Springbrook Investments, L.P., a California limited partnership (“Borrower”), and SPT Real
Estate Finance, LLC, a Delaware limited liability company (“Lender”).



RECITALS




     A. Borrower is the maker of that certain promissory note dated March 29, 2006 in the original
principal amount of $5,187,000 (the “Note”) payable to Vineyard Bank, N.A., a national banking
association (“Original Lender”). The Note is secured by a deed of trust recorded on March 31,
2006 in the Official Records of the Recorder of Riverside County, California (“Official Records”)
as document no. 2006-0229400, as modified by that certain Modification of Deed of Trust recorded in
the Official Records on May 26, 2006 as document no, 2006-0386956, that certain Modification of
Deed of Trust recorded in the Official Records on September 26, 2006 as document no. 2006-0709116
and that certain Modification of Deed of Trust recorded in the Official Records on February 15,
2008 as document no. 2008-0077706 (collectively, the “Deed of Trust”) encumbering certain real
property more particularly described on Exhibit A hereto (the “Property”).



     B. Lender is the successor-in-interest to Original Lender’s rights under the Note and the Deed
of Trust, as evidenced by that certain Memorandum of Assignment of Note, Deed of Trust and Loan
Documents recorded on August 26, 2009 in the Official Records as document no. 444428 by and
between Aware Development Company, Inc., a California corporation (“Aware”), and Lender.
Aware succeeded to Original Lender’s rights under the Note and Deed of Trust as evidenced by that
certain Assignment of Construction Deed of Trust and Fixture Filing recorded on April 8, 2009, in
the Official Records as document no. 2009-170509.



     C. The Note is in default and all obligations of Borrower thereunder have been declared due
and payable in full. Borrower has agreed that it is in its best interests for Borrower to execute
and deliver to Lender a grant deed to the Property in consideration for the discharge by Lender of
all obligations of Borrower to Lender under the Note and Deed of Trust (collectively, the “Loan
Documents”) and the release by Lender of claims under the Loan Documents against Borrower and its
general and/or limited partners, all on the terms and subject to the conditions set forth more
particularly in this Agreement.



     NOW, THEREFORE, in consideration of the above Recitals and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:



AGREEMENT




     1. Delivery of Closing Documents. On or before the Effective Date (as that term is
defined in Paragraph 10 below), Borrower shall execute and deliver or cause to be executed and



1









 




delivered to Lender each of the following (the “Closing Documents”):




          (a) A
grant deed in the form of Exhibit B attached hereto (the “Grant Deed”);




          (b) A release in the form of Exhibit C attached hereto;




          (c) An affidavit of Borrower in the form of Exhibit D attached hereto;




          (d) A partnership authorization from Borrower in the form of Exhibit E attached hereto;




          (e) A FIRPTA certificate in the form of Exhibit F attached hereto, and




          (f) A Form 593 in the form of Exhibit G attached hereto.




     2. Delivery of Release by Lender. Upon the Effective Date, Lender shall deliver to
Borrower a release in the form of Exhibit H attached hereto, duly executed by Lender.



     3. Delivery of Property Documents. On or before the Effective Date, Borrower shall
deliver to Lender originals of any and all assignable “Entitlements” (as defined in Paragraph 5
below) which are in Borrower’s possession or control.



     4. Delivery of Miscellaneous Items. Borrower has heretofore made or shall
hereafter make available to Lender, to the extent in Borrower’s possession or under its control and
reasonably needed for Lender’s continued ownership and/or development of the Property, each of the
items described on Exhibit I attached hereto. Lender shall have access to all such items and may
take possession of such items at any time on or after the Effective Date, and to the extent Lender
does not take possession of any such items on the Effective Date, Borrower shall reasonably
cooperate with Lender to make such items available to Lender thereafter.



     5. Representations and Warranties of Borrower. Borrower hereby represents and
warrants to Lender that, to the best of Borrower’s current actual knowledge, without any
independent inquiry or investigation, at the date of execution hereof and at and as of the
Effective Date:



          (a) Organization. Borrower is a limited partnership duly organized and validly
existing under the laws of the State of California.




          (b) Authorization. The execution, delivery and performance by Borrower of this
Agreement and the Closing Documents to which it is a party have been duly authorized by all
necessary partnership action and do not require the consent or approval of any person or entity and
will not contravene any law, regulation or contractual restriction applicable to or binding upon
Borrower or the Property.




          (c) Entitlements. Borrower has previously or concurrently herewith delivered



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to Lender copies of all licenses, approvals, zoning, registrations, permits and other
authorizations necessary to the development of the Property (the “Entitlements”) which are in
Borrower’s possession or control.




          (d) No Litigation. Except as set forth on Exhibit J attached hereto, there is no
litigation pending against Borrower or the Property, and Borrower has received no notice of any
litigation threatened against Borrower or the Property.




          (e) “Foreign Person”. Borrower is not a “foreign person” within the meaning of Section
1445(d)(3) of the Internal Revenue Code.




          (f) No Mechanics Liens. Borrower has not received actual notice of any claims or
liens for labor done or materials or services furnished at or to the Property.




     6. Assumed Obligations. Lender hereby agrees to assume, from and after the
Effective Date, any liability or obligations arising from any matters of record affecting the
Property accruing from and after the Effective Date (collectively, the “Assumed Obligations”).



     7. Disclaimer of Liability to Third Parties. Lender acknowledges that Lender is
acquiring the Property subject only to the Assumed Obligations, and then only to the extent Lender
would be subject to such obligations in the event Lender acquired the Property through judicial or
non-judicial foreclosure proceedings. Lender hereby expressly declines to assume and disclaims
any other obligations or liabilities of Borrower or the Property to third parties (including,
without limitation, employees or past employees of Borrower) under applicable laws or under any
contracts or agreements, except for the Assumed Obligations. Borrower covenants and agrees for the
benefit of Lender to satisfy and discharge any and all obligations of Borrower other than the
Assumed Obligations and to indemnify, defend and hold Lender harmless with respect to the same at
all times from and after the Effective Date.



     8. Cooperation; Other Matters. Prior to, at and at all times following the Effective
Date, Borrower agrees to reasonably cooperate with Lender and in furtherance of the foregoing
agrees to execute and deliver (or cause to be executed and delivered) to Lender and to do (or cause
to be done) such other acts and things as may reasonably be deemed necessary or desirable by Lender
and as are reasonably consistent with this Agreement to reasonably assure to Lender the benefit of
this Agreement and the Closing Documents; provided, however, that any reasonable out-of-pocket
costs incurred by Borrower in connection therewith shall be reimbursed by Lender. Following the
execution of this Agreement and prior to the Effective Date, Borrower will not enter into any
leases or contracts that would be binding on the Property and/or Lender without Lender’s prior
written consent, which may be withheld in Lender’s sole and absolute discretion.



     9. Tax Protest. Prior to the date hereof, Borrower initiated a real property tax
appeal (the “Appeal”) with the County of Riverside Assessor’s Office with respect to property taxes
for the Property for taxable year(s) ending prior to the Effective Date and/or for the 2009-2010
tax year. Borrower hereby assigns, without recourse or warranty, all of Borrower’s right, title
and



3









 




interest in and to any and all property tax refunds (collectively, the “Refunds”) to Lender, and
Borrower covenants and agrees that upon receipt of any Refund, whether before or after the
Effective Date, Borrower shall deliver to Lender any sums so received from the County, which
assignment and agreement are expressly subject to and conditioned upon the closing of Borrower’s
transfer of the Property to Lender.




     10. Effective Date. For purposes of this Agreement, the term “Effective Date”
shall mean the date as of which all of the following shall have occurred:



          (a) There have been delivered to the Lender duly executed and acknowledged as required, each
of the following:




               (1) This Agreement;



               (2) The Closing Documents and all deliveries in connection therewith;



               (3) Evidence reasonably satisfactory to Lender that upon recordation of the Grant Deed
Lender’s title to the Property will be insured by a policy of title insurance issued by Commerce
Title, which policy of title insurance will be in full force and effect, will be subject only to
reasonable exceptions approved by Lender and will be issued in accordance with and subject to the
requirements of the recording instructions in the form of Exhibit K attached hereto; and



          (b) The Grant Deed has been duly recorded consistent with the recording instructions in the
form of Exhibit K attached hereto.



If the Effective Date shall not have occurred on or before September 4, 2009 then this Agreement
shall, at the option of Lender (as evidenced by written notice to such effect delivered by Lender
to Borrower), terminate, the agreements of Lender contained herein shall be null and void, and
Lender may proceed to exercise any and all rights, powers and remedies it has under the Loan
Documents.




     11. Headings. Paragraph headings contained in this Agreement are for reference
purposes only, and shall not affect in any way the meaning or interpretation of this Agreement.



     12. Entire
Agreement; Counterparts. This Agreement, the Exhibits attached hereto and
the documents referred to herein or executed concurrently herewith in connection herewith,
constitute the entire agreement between the parties with respect to the subject matter hereof, and
there are no prior agreements, understandings, restrictions, warranties or representations among
the parties with regard thereto. This Agreement may be executed in multiple counterparts, each of
which shall constitute an original but all of which, when taken together, shall constitute but one
and the same document.



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     13. Time of the Essence. Time is of the essence with respect to all of the terms,
conditions and obligations set forth herein.



     14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.



     15. Amendment and Waiver. Neither this Agreement, the Closing Documents or any of the
provisions hereof or thereof may be modified, waived, discharged or terminated, except by an
instrument in writing signed by the party against whom enforcement of the modification, waiver,
discharge or termination is sought.



     16. Attorneys’ Fees. Each of the parties hereto agrees to pay all fees and expenses,
including, without limitation, reasonable attorneys’ fees, incurred by it in connection with the
preparation and negotiation of this Agreement and the other Closing Documents and the closing of
the transactions contemplated hereby. In any action brought by either party to enforce any of such
party’s rights or remedies under this Agreement or under the Closing Documents, the prevailing
party shall be entitled to all reasonable attorneys’ fees and all costs, expenses and disbursements
in connection with such action. The obligations of the parties hereunder shall survive the
closing of the transactions contemplated hereby or, if the Effective Date does not occur as
contemplated by Paragraph 10 above, the termination of this Agreement.



     17. Survival. All of the covenants and agreements of the parties hereunder shall
survive the Effective Date, the recordation of the Grant Deed and the consummation of the
transactions contemplated hereby.



     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.



	 	 	 	 	 	 	 	 	 
	 	 	LENDER:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	SPT Real Estate Finance, LLC, a Delaware limited

liability company
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Shopoff Partners, L.P., a Delaware limited
Partnership, sole member
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Shopoff General Partner, LLC, a

Delaware limited liability company,

general partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	Shopoff Properties, Trust,
Inc., a Maryland corporation,
Manager






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	 	By:  	                                          /s/ William A. Shopoff
 	 
	 	 	William A. Shopoff, 
President and Chief 	 
	 	 	Executive Officer 	 



	 	 	 
	 

	 	BORROWER:
	 
	 	 
	 

	 	Springbrook Investments, L.P., a California limited partnership
	 
	 	 
	 

	 	By:   Highgrove, Inc., its General Partner






	 	 	 	 	 
	 	By:  	                      /s/ William A. Shopoff
 	 
	 	 	William A. Shopoff, Secretary 	 



	 	 	 	 	 
	 	By:  	                      /s/ Cindy I. Shopoff
 	 
	 	 	Cindy I. Shopoff, President 	 
	 	 	 	 
	 




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SCHEDULE OF EXHIBITS




	 	 	 
	EXHIBIT	 	DESCRIPTION
	 
	A

	 	Legal Description of Property
	 
	 	 
	B

	 	Form of Grant Deed
	 
	 	 
	C

	 	Form of Borrower’s Release
	 
	 	 
	D

	 	Form of Affidavit of Borrower
	 
	 	 
	E

	 	Form of Borrower Partnership Authorization
	 
	 	 
	F

	 	Form of FIRPTA Certificate
	 
	 	 
	G

	 	Form of Form 593
	 
	 	 
	H

	 	Form of Lender’s Release
	 
	 	 
	I

	 	Schedule of Additional Closing Items
	 
	 	 
	J

	 	Litigation Disclosure
	 
	 	 
	K

	 	Form of Recording Instructions






 









 





Exhibit A 




Legal Description of Property




Exhibit A,
p.1 of 1




 









 






Real property in the City of Riverside, County of Riverside, State of California, described as
follows:



PARCEL 1 (349-170-003):



GOVERNMENT
LOT 4 IN THE SOUTHEAST 1/4 OF SECTION 22, TOWNSHIP 5
SOUTH, RANGE 4 WEST,
SAN BERNARDINO MERIDIAN, IN THE COUNTY OF RIVERSIDE, STATE OF
CALIFORNIA, ACCORDING TO THE OFFICIAL
PLAT THEREOF.



EXCEPT THAT PORTION INCLUDED WITHIN THAT PORTION DESCRIBED AS FOLLOWS:



BEGINNING AT THE NORTHEAST CORNER OF HOMESTEAD QUARTZ MINE, KNOWN AS LOT 39, IN SAID SECTION 22;
THENCE NORTH, TO THE SOUTH LINE OF THE NORTHEAST 1/4 OF SAID SECTION; THENCE WEST, TO THE
INTERSECTION OF SAID SOUTH LINE OF THE NORTHEAST 1/4 OF SAID SECTION WITH THE NORTH LINE OF SAID
LOT 39; THENCE SOUTHEASTERLY FOLLOWING THE NORTH LINE OF SAID LOT 39, TO THE POINT OF BEGINNING.



ALSO EXCEPTING THE EASTERLY 690 FEET OF SAID GOVERNMENT LOT 4.



ALSO EXCEPTING THE SOUTHERLY 530 FEET.



EXCEPTING THEREFROM 1/2 OF ALL OIL, GAS AND MINERAL RIGHTS, RESERVED IN THE DEED RECORDED
FEBRUARY 23, 1972 AS INSTRUMENT NO. 23316 OF OFFICIAL RECORDS.




PARCEL 2: (349-170-004):



THE NORTHERLY 330 FEET OF THE EASTERLY 690 FEET OF GOVERNMENT LOT 4 IN THE SOUTHEAST 1/4 OF SECTION
22, TOWNSHIP 5 SOUTH, RANGE 4 WEST, SAN BERNARDINO MERIDIAN, IN THE COUNTY OF RIVERSIDE, STATE OF
CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT THEREOF;



EXCEPT THAT PORTION INCLUDED WITH THAT PORTION DESCRIBED AS FOLLOWS:



THE WESTERLY 60 FEET OF SAID EASTERLY 690 FEET FOR ROAD AND WIND VISIBILITY PURPOSES;



EXCEPTING THEREFROM 1/2 OF ALL OIL, GAS AND MINERAL RIGHTS, RESERVED IN THE DEED RECORDED
FEBRUARY 23, 1972 AS
INSTRUMENT NO. 23314 OF OFFICIAL RECORDS.




PARCEL 3 (349-170-005):



THE SOUTH
330 FEET OF THE NORTH 660 FEET OF THE EASTERLY 690 FEET OF GOVERNMENT LOT 4 IN THE
SOUTHEAST 1/4 OF SECTION 22, TOWNSHIP 5 SOUTH, RANGE 4 WEST, SAN BERNARDINO BASE AND MERIDIAN.



EXCEPTING THEREFROM 1/2 OF ALL OIL, GAS AND MINERAL RIGHTS, RESERVED IN THE DEED RECORDED
FEBRUARY 23, 1972 AS INSTRUMENT NO. 23314 OF OFFICIAL RECORDS.




PARCEL 4
(349-170-006):




Exhibit A,
p.2 of 1




 









 




THE SOUTH 1/2 OF THE EASTERLY 690 FEET OF GOVERNMENT LOT 4, IN THE SOUTHEAST 1/4 OF SECTION 22,
TOWNSHIP 5 SOUTH, RANGE 4 WEST, SAN BERNARDINO MERIDIAN, IN THE COUNTY OF RIVERSIDE, STATE OF
CALIFORNIA, ACCORDING TO THE OFFICIAL PLATS THEREOF



EXCEPTING THE SOUTHERLY 330 FEET OF SAID EASTERLY 690 FEET OF GOVERNMENT LOT 4.



EXCEPTING THEREFROM 1/2 OF ALL OIL, GAS AND MINERAL RIGHTS, RESERVED IN THE DEED RECORDED
FEBRUARY 23, 1972 AS INSTRUMENT NO. 23314 OF OFFICIAL RECORDS.




PARCEL 5 (349-170-008):



THE EASTERLY 1/2 OF THE SOUTHERLY 560 FEET OF GOVERNMENT LOT 2 IN THE SOUTHEAST 1/4 OF SECTION
22, TOWNSHIP 5 SOUTH, RANGE 4 WEST, SAN BERNARDINO MERIDIAN, IN THE COUNTY OF RIVERSIDE, STATE
OF CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT THEREOF.



EXCEPTING THE SOUTHERLY 265 FEET OF SAID GOVERNMENT LOT 2



ALSO EXCEPTING THEREFROM 1/2 OF ALL OIL, GAS AND MINERAL RIGHTS, RESERVED IN THE DEED RECORDED
FEBRUARY 25, 1972 AS INSTRUMENT NO. 24579 OF OFFICIAL RECORDS.




PARCEL 6 (349-170-011):



THE EAST 1/2 OF THE SOUTHERLY 265 FEET OF GOVERNMENT LOT 2 IN THE SOUTHEAST 1/4 OF SECTION 22,
TOWNSHIP 5 SOUTH, RANGE 4 WEST, SAN BERNARDINO MERIDIAN, IN THE COUNTY OF RIVERSIDE, STATE OF
CALIFORNIA, ACCORDING THE OFFICIAL PLAT THEREOF.



EXCEPTING THEREFROM 1/2 OF ALL OIL, GAS AND MINERAL RIGHTS, RESERVED IN THE DEED RECORDED
FEBRUARY 29, 1972 AS INSTRUMENT NO. 26947 OF OFFICIAL RECORDS.




PARCEL 7 (349-170-013)



THE EASTERLY 690 FEET OF GOVERNMENT LOT 4 IN THE SOUTHEAST 1/4 OF SECTION 22, TOWNSHIP 5 SOUTH,
RANGE 4 WEST, SAN BERNARDINO BASE AND MERIDIAN.



EXCEPTING THEREFROM THE NORTH 990 FEET THEREOF.



EXCEPTING THEREFROM 1/2 OF ALL OIL, GAS AND MINERAL RIGHTS, RESERVED IN THE DEED RECORDED
FEBRUARY 23, 1972 AS INSTRUMENT NO. 23314 OF OFFICIAL RECORDS.




PARCEL 8 (349-180-002):



THE NORTH 1/2 OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 22,
TOWNSHIP 5 SOUTH, RANGE 4 WEST SAN BERNARDINO AND MERIDIAN.




PARCEL 9 (349-180-004):



THE SOUTH 1/2 OF THE NORTHEAST 1/4 OF THE SOUTHEAST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 22,
TOWNSHIP 5 SOUTH, RANGE 4 WEST SAN BERNARDINO AND MERIDIAN, IN THE COUNTY OF RIVERSIDE, STATE OF
CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT THEREOF.




Exhibit A, p.3 of 1





 












 





EXCEPTING THEREFROM 1/2 OF ALL OIL, GAS AND MINERAL RIGHTS, RESERVED IN THE DEED RECORDED FEBRUARY
25, 1972 AS INSTRUMENT NO. 24577 OF OFFICIAL RECORDS.



PARCEL 10
(349-180-006):




THE SOUTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 22, TOWNSHIP 5 SOUTH, RANGE 4 WEST, SAN
BERNARDINO MERIDIAN, IN THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL
PLAT THEREOF;



EXCEPT THAT PORTION DESCRIBED AS FOLLOWS:




BEGINNING AT A POINT ON THE WEST LINE OF THE SOUTHEAST 1/4 OF SAID SECTION, 66 FEET SOUTH OF THE
NORTHWEST CORNER OF THE SOUTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SAID SECTION; THENCE EAST 660 FEET,
PARALLEL WITH THE NORTH LINE THEREOF; THENCE SOUTH 594 FEET PARALLEL WITH THE WEST LINE OF THE
SOUTHEAST 1/4 OF SAID SECTION; THENCE WEST 660 FEET, PARALLEL WITH
THE NORTH LINE OF THE SOUTHWEST
1/4 OF THE SOUTHEAST 1/4 OF SAID SECTION, TO A POINT ON THE WEST LINE THEREOF; THENCE NORTH 594
FEET ON SAID WEST LINE TO THE POINT OF BEGINNING.



ALSO EXCEPTING THE SOUTHERLY 1/2 OF THE SOUTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SAID SECTION 22.



ALSO EXCEPTING THE NORTHERLY 66 FEET OF THE SOUTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 22, AND
THE SOUTHERLY 330 FEET OF THE NORTHEAST 1/4 OF THE SOUTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION
22.



ALSO EXCEPTING THEREFROM 1/2 OF ALL OIL, GAS AND MINERAL RIGHTS, RESERVED IN THE DEED RECORDED
FEBRUARY 28, 1972 AS INSTRUMENT NO. 25409 OF OFFICIAL RECORDS.



PARCEL 11
(349-180-007):




THE SOUTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 22, TOWNSHIP 5 SOUTH, RANGE 4 WEST, SAN
BERNARDINO MERIDIAN, IN THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL
PLAT THEREOF;



EXCEPT THAT PORTION DESCRIBED AS FOLLOWS:




BEGINNING AT A POINT ON THE WEST LINE OF THE SOUTHEAST 1/4 OF SAID SECTION, 66 FEET SOUTH OF THE
NORTHWEST CORNER OF THE SOUTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SAID SECTION; THENCE EAST 660 FEET,
PARALLEL WITH THE NORTH LINE THEREOF; THENCE SOUTH 594 FEET; PARALLEL WITH THE WITH WEST LINE OF
THE SOUTHEAST 1/4 OF SAID SECTION; THENCE WEST 660 FEET, PARALLEL WITH THE NORTH LINE OF THE
SOUTHWEST 1/4 OF SAID SECTION, TO A POINT ON THE WEST LINE THEREOF; THENCE NORTH 594 FEET ON SAID
WEST LINE TO THE POINT OF BEGINNING.



ALSO EXCEPTING THE SOUTHERLY 1/2 OF THE SOUTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SAID SECTION 22.



ALSO EXCEPTING THE NORTHERLY 330 FEET OF THE SOUTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 22, AND
THE SOUTHERLY 30 FEET OF THE NORTHEAST 1/4 OF THE SOUTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 22.



ALSO EXCEPTING THEREFROM 1/2 OF ALL OIL, GAS AND MINERAL RIGHTS, RESERVED IN THE DEED RECORDED
FEBRUARY 28, 1972 AS INSTRUMENT NO. 25409 OF OFFICIAL RECORDS.



Exhibit A,
p. 4 of 1





 









 




PARCEL 12 (349-180-016):




THE SOUTHWEST 1/4 OF THE SOUTHEAST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 22, TOWNSHIP 5 SOUTH, RANGE
4 WEST, SAN BERNARDINO MERIDIAN, IN THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, ACCORDING TO THE
OFFICIAL PLAT THEREOF;



EXCEPT THE SOUTHERLY 374 FEET OF THE SOUTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SOUTHEAST 1/4 OF SAID
SECTION;



EXCEPTING THEREFROM 1/2 OF ALL OIL, GAS AND MINERAL RIGHTS, RESERVED IN THE DEED RECORDED
FEBRUARY 25,1972 AS INSTRUMENT NO. 24577 OF OFFICIAL RECORDS.



PARCEL 13 (349-180-020):




THE EASTERLY 1/2 OF THE SOUTHEAST 1/4 OF THE SOUTHEAST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 22,
TOWNSHIP 5 SOUTH, RANGE 4 WEST, SAN BERNARDINO BASE AND MERIDIAN.



EXCEPT THE
SOUTHERLY 374 FEET OF SAID SOUTHEAST 1/4.



PARCEL 14 (349-160-010):




THE NORTHWEST 1/4 OF THE EASTERLY HALF OF THE SOUTHERLY HALF OF THE SOUTHWEST QUARTER OF SECTION
22, TOWNSHIP 5 SOUTH, RANGE 4 WEST, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.



PARCEL 15 (APN 349-170-009):




THE
WESTERLY HALF OF THE SOUTHERLY 560 FEET OF THE GOVERNMENT LOT 2 IN THE SOUTHEAST QUARTER OF
SECTION 22, TOWNSHIP 5 SOUTH, RANGE 4 WEST, SAN BERNARDINO MERIDIAN, IN THE COUNTY OF RIVERSIDE,
STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT THEREOF.



EXCEPTING THE SOUTHERLY 265 FEET OF SAID GOVERNMENT LOT 2.



PARCEL 16 (APN 349-170-007):




THE NORTH 265 FEET MORE OR LESS OF THE SOUTH 530 FEET MORE OR LESS OF THE WEST 640 FEET MORE OR
LESS OF GOVERNMENT LOT 4 IN THE SOUTHEAST QUARTER OF SECTION 22, TOWNSHIP 5 SOUTH, RANGE 4 WEST,
SAN BERNARDINO BASE AND MERIDIAN.



PARCEL 17 (APN 349-180-008):




THE SOUTH 30 FEET OF THE SOUTH HALF OF THE NORTHEAST QUARTER OF THE SOUTHWEST QUARTER OF THE
SOUTHEAST QUARTER OF SECTION 22, TOWNSHIP 5 SOUTH, RANGE 4 WEST, SAN BERNARDINO BASE AND MERIDIAN.



PARCEL 18 (APN 349-180-017):




Exhibit A,
p. 5 of 1





 











 






THE SOUTH
30 FEET OF THE NORTH 316 FEET OF THE SOUTHWEST 1/4 OF THE SOUTHEAST 1/4 OF THE SOUTHEAST
1/4
OF SECTION 22. TOWNSHIP 5 SOUTH, RANGE 4 WEST, SAN BERNARDINO BASE AND MERIDIAN.



PARCEL 19 (APN 349-180-001 Now 349-180-035):




THE NORTH 66 FEET OF THE SOUTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 22, TOWNSHIP 5 SOUTH,
RANGE 4 WEST, SAN BERNARDINO BASE AND MERIDIAN.



PARCEL 20 (349-150-034-3):




THE SOUTH 20 ACRES OF THE NORTH HALF OF THE SOUTHWEST QUARTER OF SECTION 22, TOWNSHIP 5
SOUTH, RANGE 4, WEST, SAN BERNARDINO BASE AND MERIDIAN.



EXCEPTING THEREFROM THE EASTERLY 5 ACRES THEREOF AND EXCEPTING THEREFROM THE WESTERLY 9
ACRES THEREOF.



PARCEL 21 (349-160-011):




THE EAST HALF OF THE SOUTHEAST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 22, TOWNSHIP 5
SOUTH, RANGE 4 WEST, SAN BERNARDINO BASE AND MERIDIAN;



EXCEPTING THEREFROM THE SOUTHERLY 374 FEET.




PARCEL 22 (349-170-010)




THE SOUTHERLY 265 FEET OF GOVERNMENT LOT 2 IN THE SOUTHEAST QUARTER OF SECTION 22, TOWNSHIP 5
SOUTH, RANGE 4 WEST, SAN BERNARDINO BASE AND MERIDIAN, ACCORDING TO THE OFFICIAL PLAT THEREOF.



EXCEPTING THEREFROM 1/2 OF ALL OIL, GAS AND MINERAL RIGHTS AS RESERVED IN THE DEED RECORDED
FEBRUARY 29, 1972 AS INSTRUMENT NO. 26947 OF OFFICIAL RECORDS OF SAID
COUNTY.



ALSO EXCEPTING THEREFROM THE EAST 1/2 OF THE SOUTHERLY 265 FEET OF GOVERNMENT LOT 2 IN THE
SOUTHEAST 1/4 OF SECTION OF SECTION 22, TOWNSHIP 5 SOUTH, RANGE 4 WEST, SAN BERNARDINO BASE AND
MERIDIAN AS CONVEYED TO GLEN C.J. FREESE, BY GRANT DEED RECORDED FEBRUARY 29, 1972 AS INSTRUMENT
NO. 26952 OF OFFICIAL RECORDS OF SAID COUNTY.



PARCEL 23 (349-170-012)




THE SOUTHERLY 265 FEET OF GOVERNMENT LOT 4 IN THE SOUTHEAST QUARTER OF SECTION 22, TOWNSHIP 5
SOUTH, RANGE 4 WEST, SAN BERNARDINO BASE AND MERIDIAN, ACCORDING TO THE OFFICIAL PLAT THEREOF.



EXCEPT THAT PORTION INCLUDED WITHIN THAT PORTION DESCRIBED AS FOLLOWS:




BEGINNING AT THE NORTHEAST CORNER OF HOMESTEAD QUARTZ MINE, ALSO KNOW AS LOT 39, IN SAID SECTION
22; THENCE NORTH, TO THE SOUTH LINE OF THE NORTHEAST 1/4 OF SAID SECTION; THENCE WEST, TO THE
INTERSECTION OF SAID SOUTH LINE OF THE NORTHEAST 1/4 OF SAID



Exhibit A, p. 6 of 1





 









 









SECTION
WITH THE NORTH LINE OF SAID LOT 39; THENCE SOUTHEASTERLY FOLLOWING THE NORTH LINE OF SAID
LOT 39, TO THE POINT OF BEGINNING.



ALSO EXCEPTING THE EASTERLY 690 FEET OF SAID GOVERNMENT LOT 4




ALSO EXCEPTING THEREFROM, ONE HALF OF ALL OIL, GAS, AND MINERAL RIGHTS AS RESERVED IN DOCUMENT
RECORDED FEBRUARY 28, 1972 AS INSTRUMENT NO. 25411 OF OFFICIAL
RECORDS OF SAID COUNTY.



PARCEL 24 (349-180-005)




THE SOUTH 1/2 OF THE NORTHEAST 1/4 OF THE SOUTHEAST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 22,
TOWNSHIP 5 SOUTH, RANGE 4 WEST, SAN BERNARDINO BASE AND MERIDIAN, ACCORDING TO THE GOVERNMENT
SURVEY.



EXCEPTING THEREFROM 1/2 OF ALL OIL, GAS AND MINERAL RIGHTS.




APN:
349-170-003 and 349-170-004 and 349-170-005 and 349-170-006 and 349-170-008 and 349-170-011
and 349-170-013 and 349-180-002 and 349-180-004 and 349-180-006 and 349-180-007 and 349-180-016 and
349-180-020 and 349-160-010 and 349-170-009 and 349-170-007 and 349-180-008 and 349-180-017 and
349-180-035 and 349-150-034 and 349-160-011 and 349-170-010 and 349-170-012 and 349-180-005



Exhibit A,
p. 7 of 1




 











 





Exhibit B




RECORDING REQUESTED BY

AND WHEN RECORDED RETURN TO:




Croudace & Dietrich LLP

4750 Von Karman

Newport Beach, California 92660

Attention: Debra M. Dietrich, Esq.




MAIL TAX STATEMENTS TO:




SPT Real Estate Finance, LLC

8951 Research Dr.

Irvine, CA 92618



Documentary Transfer Tax of $0, based on full value of property conveyed less value of liens and
encumbrances remaining at time of sale (value of property conveyed does not exceed liens and
encumbrances)




GRANT DEED




     FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Springbrook Investments,
L.P., a California limited partnership (“Grantor”) hereby grants to SPT Real Estate Finance, LLC,
a Delaware limited liability company (“Grantee”), the real property located in the unincorporated
area of the County of Riverside, State of California, described on Exhibit A attached hereto and
made a part hereof, together with all licenses, approvals, zoning, registrations, permits and
other authorizations pertaining to the use and/or development thereof.



     This deed is an absolute conveyance, Grantor having sold said land to Grantee for a fair and
adequate consideration, in addition to that above recited, being (i) the acceptance by Grantee
hereof in full satisfaction and discharge of Grantor’s obligations evidenced by a promissory note
(“Note”) in the original principal amount of $5,187,000.00 and dated as of March 29, 2006, secured
by a deed of trust (“Deed of Trust”) executed by Grantor for the benefit of Vineyard Bank, N.A. and
recorded March 31, 2006 as Instrument No. 2006-0229400 in the Official Records of Riverside County,
California, as modified, amended and/or assigned, and (ii) the release by Grantee of claims against
Grantor and its general and limited partners with respect to the loan evidenced by the Note, as set
forth in a separate Release of even date herewith by Grantee for the benefit of Grantor. Grantor
declares that this conveyance is freely and fairly made, and that there are no agreements, oral or
written, other than this deed between Grantor and Grantee with respect to said land which affects
the absolute nature of the conveyance hereby made.



Exhibit B,
p. l of 3




 









 





     Said property is conveyed to Grantee subject to all liens, encumbrances, easements, covenants,
conditions and restrictions of record.



     Executed as of this 3rd day of September, 2009.



	 	 	 	 	 	 	 	 	 
	 	 	Springbrook Investments, L.P., a California limited
partnership	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:    Highgrove, Inc., its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

William A. Shopoff, Secretary
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Cindy I. Shopoff, President
	 	 






Exhibit B,
p. 2 of 3




 









 





	 	 	 
	State of California
	 	)
	County of                                         
	 	)





On                                                              before me,          
                                ,
Notary Public, personally appeared                                         , who 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.



I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.



WITNESS my hand and official seal.



Signature                                                              (Seal)




Exhibit B,
p. 3 of 3




 









 








Exhibit C




GENERAL RELEASE




          FOR GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy of which are hereby
acknowledged, the undersigned, Springbrook Investments, L.P., a California limited partnership,
and its successors and assigns (collectively, “Releasor”) does hereby forever release, discharge
and acquit SPT Real Estate Finance, LLC, a Delaware limited liability company (“Lender”), its
officers, directors, members, managers, agents and employees, and their successors, heirs, and
assigns, and each of them, of and from any and all claims, demands, obligations, liabilities,
indebtednesses, breaches of contract, breaches of duty or any relationship, acts, omissions,
misfeasance, malfeasance, cause or causes of action, debts, sums of money, accounts,
compensations, contracts, controversies, promises, damages, costs, losses and expenses, of every
type, kind, nature, description or character, and irrespective of how, why, or by reason of what
facts, whether heretofore, now existing or hereafter arising, or which could, might, or may be
claimed to exist, of whatever kind or name, whether known or unknown, suspected or unsuspected,
liquidated or unliquidated, each as though fully set forth herein at length, which in any way
arise out of, are connected with or relate to the Loan (as that term and capitalized terms not
otherwise defined herein are defined in that certain Settlement Agreement dated of even date
herewith, pursuant to which this Release is delivered) (collectively, “Claims”), including,
without limitation, all Claims arising out of, connected with or relating to the Loan Documents,
the Settlement Agreement and the other Closing Documents (as such capitalized terms are defined in
the Settlement Agreement) (other than (i) in the case of the Settlement Agreement and the other
Closing Documents to which Lender is a party, Claims directly resulting from the material failure
of Lender to observe or perform its obligations thereunder and (ii) any rights or remedies,
including, without limitation, the right to contribution, which Releasor or any of their
successors or assigns may have against Lender under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (codified at Title 42 U.S.C. § 9601 et seq.), as it may be
amended from time to time, or any other applicable federal, state or local laws relating to
hazardous materials).



          As further consideration for this Release, the Releasor hereby agrees, represents and warrants that the matters released herein are not limited to matters which are known or disclosed, and the Releasor hereby waives any and all rights and benefits which it now has, or in the future may have, conferred upon it by virtue of the provisions of Section 1542 of the Civil Code of the State
of California which provides as follows:




A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR
HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.



          In this connection, the Releasor hereby agrees, represents and warrants that it realizes and
acknowledges that factual matters now unknown to it may have given or may hereafter give rise to
Claims which are presently unknown, unanticipated and unsuspected, and it





 









 







further agrees, represents and warrants that this Release has been negotiated and agreed upon in
light of that realization and that it nevertheless hereby intends to release, discharge and acquit
the parties set forth hereinabove from any such unknown Claims which are in any way related to the
matters released hereinabove.




          IT IS HEREBY FURTHER UNDERSTOOD AND AGREED that the acceptance of delivery of this Release by
the parties released hereby shall not be deemed or construed as an admission of liability by any
party released by the terms hereof, and each such party hereby expressly denies liability of any
nature whatsoever arising from or related to the subject of the within Release.




          The Releasor hereby agrees, represents and warrants that it has had advice of counsel of its
own choosing in negotiations for and the preparation of the within release, that it has read this
Release or has had the same read to it by its counsel, that it has had the within Release fully
explained by such counsel, and that it is fully aware of its contents and legal effect.




          DATED: September 3, 2009.




	 	 	 	 	 	 	 	 	 
	 	 	RELEASOR:	 	Springbrook Investments L.P., a California limited partnership
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:   Highgrove, Inc., its General Partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	     William A. Shopoff, Secretary
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	     Cindy I. Shopoff, President







 











 





Certification of Counsel




     I have advised the Releasor under the above Release of the meaning and effect of the
provisions of Section 1542 of the California Civil Code and that Releasor, acting through Its
authorized agents, has voluntarily waived any rights Releasor may have thereunder, as well as under
any other statutes or common law principles of similar effect.



	 	 	 	 	 
	 

	 	 

Attorney for Releasor
	 	 







 









 





Exhibit D




ESTOPPEL AFFIDAVIT




	 	 	 
	STATE OF CALIFORNIA
	 	)
	 
	 	)  ss.
	COUNTY OF ORANGE
	 	)






     The undersigned, being the sole general partner of Springbrook Investments, L.P., a
California limited partnership (the “Borrower”), being duly sworn, deposes and says on behalf of
the Borrower:



     That it is the entity which made, executed and delivered that certain partnership grant deed
to SPT Real Estate Finance, LLC, a Delaware limited liability company (the “Lender”), dated
September 3, 2009, conveying that certain real property described in Schedule I attached
hereto (the “Property”).



     That the aforesaid deed is intended to be and is an absolute conveyance of the title to the
Property to the Lender, and was not and is not now intended as a mortgage, trust conveyance, or
security of any kind; that it was and it is the intention of the Borrower as grantor in said deed
to convey, and by said deed the Borrower did convey to Lender, all its right, title and interest
absolutely in and to the Property; that possession of the Property has been surrendered to Lender;



     That in the execution and delivery of said deed the Borrower was not acting under any
misapprehension as to the effect thereof, and acted freely and voluntarily and was not acting
under coercion or duress;



     That the execution and delivery of said deed by the Borrower was duly authorized by a
Partnership Authorization of the General Partner of the Borrower, an original, fully executed copy
of which is attached hereto as Schedule II;



     That the consideration for said deed was and is: (a) the discharge by Lender of all of the
debts, obligations, costs, and charges of the Borrower (1) secured by that promissory note (“Note”(in the original principal amount of $5,187,000.00 and dated as of March 29, 2006, secured by a deed
of trust (“Deed of Trust”) executed by Borrower for the benefit of Vineyard Bank, N.A. and
recorded March 31, 2006 as Instrument No. 2006-0229400 of the Official Records of Riverside County,
California, as modified, amended and/or assigned, and (b) the release by Lender of claims against
Borrower or its general or limited partners with respect to the loan evidenced by the Note, as set
forth in a separate Release of even date herewith by Lender in favor of Borrower. At the time of
making said deed and said Note the Borrower believed and now believes that the aforesaid
consideration therefor represents the fair value of the Property;



     This affidavit is made for the protection and benefit of Lender, its affiliates,



Exhibit D, p. 1 of 2





 









 







successors arid assigns, and all other parties hereafter dealing with or who may acquire an
interest in the property herein described, and particularly for the benefit of Chicago Title
Insurance Company which is about to insure the title to the Property in reliance thereon, and any
other title company which may hereafter insure the title to the Property; and




     That the Borrower (and its general partner on its behalf) will testify, declare, depose or
certify before any competent tribunal, officer, or person, in any case now pending or which may
hereafter be instituted, to the truth of the particular facts hereinabove set forth.



	 	 	 	 	 
	 	Highgrove, Inc.

 	 
	 	By:  	 	 
	 	 	William A. Shopoff, Secretary 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Cindy I. Shopoff, President 	 
	 	 	 	 
	 



Exhibit D,
p. 2 of 2





 









 





Schedule I




Legal
Description of Property




Schedule
I





 












 





Schedule II




Partnership Authorization




Schedule II





 









 








PARTNERSHIP AUTHORIZATION

(Springbrook Investments, L.P.)




To: SPT Real Estate Finance, LLC




          The undersigned hereby certifies as follows:




          1. That it is the sole general partner of Springbrook Investments, L.P., a
limited partnership existing under the laws of the State of California (the “Partnership”).




          2. That the undersigned, acting alone and without the consent of any limited
partner of the Partnership, has full power and authority to:





	 	(a)	 	execute and deliver a Settlement Agreement (the “Settlement
Agreement”), by and among the Partnership and SPT Real Estate Finance,
LLC (“Lender”), and perform the transactions contemplated thereby; and
	 
	 	(b)	 	execute and deliver all Closing Documents required by (and as
defined in)
the Settlement Agreement, including, but not limited to, a Grant Deed and
Release, and perform the respective transactions contemplated thereby.





          3. That all instruments and documents hereinabove referred to shall be in
such form and shall contain such terms and conditions as may be approved by such general
partner, such approval to be conclusively evidenced by such general partner’s execution
thereof.




          4. That Lender shall be entitled to act in reliance upon the matters herein
contained without further inquiry of any kind, notwithstanding anything contained in the
Agreement and Articles of Limited Partnership of the Partnership or any other agreements or
documents.




          WITNESS the due execution hereof this 3rd day of September, 2009.




	 	 	 	 	 
	 	Highgrove, Inc.

 	 
	 	By:  	 	 
	 	 	     William A. Shopoff, Secretary 	 
	 	 	 
	 	By:  	
 	 
	 	 	     Cindy I. Shopoff, President 	 
	 	 	 	 
	 



Exhibit E,
p. 1 of 1




 









 








Exhibit F




CERTIFICATE OF TRANSFEROR OTHER

THAN AN INDIVIDUAL




(FIRPTA Affidavit)




          Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property
interest must withhold tax if the transferor is a foreign person. To inform SPT Real Estate
Finance, LLC, a Delaware limited liability company, as transferee of certain real property located
in Los Angeles, California, that withholding of tax is not required upon the disposition of such
U.S. real property interest by Harbor Realty Investors, a California limited partnership
(“Transferor”), the undersigned hereby certifies the following on behalf of Transferor:




          1. Transferor is not a foreign corporation, foreign partnership, foreign trust, or foreign
estate (as those terms are defined in the Internal Revenue Code and related Income Tax
Regulations);




          2. Transferor is not a disregarded entity as defined in Section 1.1445-2(b)(2)(iii);




          3. Transferor’s U.S. employer identification number is 75-3014860; and




          4. Transferor’s office address is 8951 Research Dr., Irvine, CA 92618.




          Transferor understands that this certification may be disclosed to the Internal Revenue
Service by the transferee and that any false statement contained herein could be punished by fine,
imprisonment, or both.




          Under penalty of perjury, I declare that I have examined this certificate and to the best of
my knowledge and belief it is true, correct and complete, and I further declare that I have
authority to sign this document on behalf of Transferor.




	 	 	 	 	 	 	 	 	 
	 	 	Springbrook Investments, L.P., a California
limited partnership	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Highgrove, Inc., its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

William A. Shopoff, Secretary
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Cindy I. Shopoff, President
	 	 






Dated as of September 3, 2009



NOTICE TO TRANSFEREE (BUYER): You are required by law to retain this Certificate until the end of
the fifth taxable year following the taxable year in which the transfer takes place and to make it
available to the Internal Revenue Service if requested during that period.




Exhibit F, p. 1 of 1

















 









	ExhibitGFormofForm593YEARCALIFORNIAFORM2009RealEstateWithholdingCertificate593-CPartI-Seller’sInformation
ReturnthisfromtoyourescrowcompanyNameSPRINGBROOKINVESTMENTS,LPSSNORITINSpouse’sRDP’sName(ifjointlyowned)S
pouse’sRDP’sSSNorITIN(ifjointlyowned)Address(includingroom,POBoxorPMBno.)FBNGACorpno.8951ResarchDr.753014
860CityIrvine,stateCAZPCode92618OwnershipPercentage%100%Propertyaddress(ifnostreetaddress,provideparcelnumbe
rcounty)Todeterminewhetheryouqualityforafullaspartialwithholdingexemption,checkallboxesthatapplytotheproperl
ybeingsoldortransferred.(Seeline-by-linenotesintheInstructions)PartII-Certificationwhichfullyexemptthesalefr
omwithholding:ThePropertyqualifiesasthesaller’s(ordecedent’sifbeingsoldbythedecedent’sestate)principalresidenc
ewithinthemeaningofInternalRevenuecode(IRC)Section121.Theseller(ordecedent,ifbeingsoldbythedecedent’sestatel
astusedthepropertyastheseller’s(decedent’s)principalresidencewithinthemeaningofIRCSection121withoutregardtothe
two-yeartimeperiod.ThesellerhasalossorzerogainforCaliforniaincometaxpurposesonthissale.Tocheckthisboxyoumustcompl
eteform593-E,RealEstateWithholding-ComputationofEstimatedGainorLossandhavealossorzerogainonline16.Thepropertyisbei
ngcompulsorilyorinvoluntarilyconvertedandthesellerintendstoacquirepropertythatissimilarorrelatedinservic
eorusetoqualifyfornonrecognitionofgainforCaliforniaincometaxpurposesunderIRCSection1033.Thetransferqualifie
sfornonrecognitiontreatmentunderIRCSection351(transfertoacorporationcontrolledbythetransferor’sorIRCSection721(co
ntributiontoapartnershipinexchangeforpartnershipinterest).Thesellerisacorporation(oralimitedliabilitycompany(LLC)cl
assifiedasacorporationforfederalandCaliforniaincometaxpurposes)thatiseitherqualifiedthroughtheCaliforniaSecretaryofSt
ateorhasapermanentplaceofbusinessinCalifornia.ThesellerisaCaliforniapartnershiporqualifiedtodobusinessinCalifornia(oran
LLCthatisclassifiedasapartnershipforfederalandCaliforniaincometaxpurposesandisnotasinglememberLLC)thatisnotdisregardedfor
federalandCaliforniaincometaxpurposes.Ifthisboxischecked,thepartnershiporLLCmuststillwithholdonnonresidentpartnersormembe
rs.Thesellerisatax-examptentityunderCaliforniaorfederallaw.Thesellerisaninsurancecompany,individualretirementaccount,quali
fiedpensionprofitsharingplan,orcharitableremaindertrustPartIII-Certificationsthatmaypartiallyorfullyexemptthesalefromwithho
lding:RealEstateEacreeParon(REEP):Seeinstructionsforamountstowithhold.Thetransferqualifiesassimultaneouslike-kindexchangewit
hinthemeaningofIRCSection1031Thetransferqualifiesasdeferredlike-kindexchangewithinthemeaningofIRCSection1031.Thetransferofth
ispropertyisaninstallmentsalewherethebuyerisrequiredtowithholdontheprincipalportionofeachinstallmentpaymentCopiesofForm593-1
        ,RealEstateWithholdingSaleAcknowledgement,andthepromissorynoteareattached.PartIV-Seller’sSignatureUnderpenaltiesofperjury,Iher
ebycertifythattheinformationprovidedaboveis,tothebestofmyknowledge,trueandcorrect.Ifconditionschange,Iwillpromptlyinformthe
withholdingagent.IunderstandthattheFranchiseTaxBoardmayreviewrelevantescrowdocumentstoensurewithholdingcomplianceandthatcomp
letingthisformdoesnotexemptmefromfilingaCaliforniaincomeorfranchisetaxreturntoreportthissale.SalerNameandTitleSAler’sSinnatur
eDateSpouse’sROP’sNamesSpouse’sRDP’sSignaturedateSaler,IfyouchackedanyboxinpartII.youareexampleformrealeatzwithholdering.Ifyo
uchackedanyboxinpartIII.youmayqualityforapartialorcompletewithholdingexerrption.IfyouchackedanyboxinpartIIorPartIII.thewithho
ldeingwillbe31/3%(.0333)ofthetotlesales=[riceortheoptionealgainonsalewithholdingtaxstatement.Ifyouarewithholdupon.thewithholdin
gagentshouldgiveyouonecopyofform593.AttachacopyfromtheFTBuponrequest.ForPrivacyNotice,getfromFTB1121.7131093from693-CC22008(REV01-09)Exh:bitH,p,1of2



















 








Exhibit H




GENERAL RELEASE




          FOR GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy of which are hereby
acknowledged, the undersigned, SPT Real Estate Finance, LLC, a Delaware limited liability company
(“Releasor”), and each of its successors and assigns, does hereby forever release, discharge and
acquit Springbrook Investments, L.P., a California limited partnership, its officers, directors,
members, managers, agents and employees, and their respective its officers, directors, members,
managers, agents, employees, successors, heirs, and assigns (collectively, “Releasees”),
and each of them, of and from any and all claims, demands, obligations, liabilities,
indebtednesses, breaches of contract, breaches of duty or any relationship, acts, omissions,
misfeasance, malfeasance, cause or causes of action, debts, sums of money, accounts,
compensations, contracts, controversies, promises, damages, costs, losses and expenses, of every
type, kind, nature, description or character, and irrespective of how, why, or by reason of what
facts, whether heretofore, now existing or hereafter arising, or which could, might, or may be
claimed to exist, of whatever kind or name, whether known or unknown, suspected or unsuspected,
liquidated or unliquidated, each as though fully set forth herein at length, which in any way
arise out of, are connected with or relate to the Loan (as that term and capitalized terms not
otherwise defined herein are defined in that certain Settlement Agreement dated of even date
herewith, pursuant to which this Release is delivered) (collectively, “Claims”), including,
without limitation, all Claims arising out of, connected with or relating to the Loan Documents,
the Settlement Agreement and the other Closing Documents (as such capitalized terms are defined in
the Settlement Agreement) (other than (i) in the case of the Settlement Agreement and the other
Closing Documents to which any Releasee is a party, Claims directly resulting from the material
failure of any Releasee to observe or perform its obligations thereunder and (ii) any rights or
remedies, including, without limitation, the right to contribution, which Releasor or any of its
affiliates, subsidiaries, successors or assigns may have against a Releasee (or any of them) under
the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (codified at
Title 42 U.S.C. § 9601 et seq.), as it may be amended from time to time, or any
other applicable federal, state or local laws relating to hazardous materials).




          As further consideration for this Release, the Releasor hereby agrees, represents and
warrants that the matters released herein are not limited to matters which are known or disclosed,
and the Releasor hereby waives any and all rights and benefits which it now has, or in the future
may have, conferred upon it by virtue of the provisions of Section 1542 of the Civil Code of the
State of California which provides as follows:





A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR
HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.



Exhibit H, p. 1 of 2




 









 





          In this connection, the Releasor hereby agrees, represents and warrants that it realizes and
acknowledges that factual matters now unknown to it may have given or may hereafter give rise to
Claims which are presently unknown, unanticipated and unsuspected, and it further agrees,
represents and warrants that this Release has been negotiated and agreed upon in light of that
realization and that it nevertheless hereby intends to release, discharge and acquit the parties
set forth hereinabove from any such unknown Claims which are in any way related to the matters
released hereinabove.




          IT IS HEREBY FURTHER UNDERSTOOD AND AGREED that the acceptance of delivery of this Release by
the parties released hereby shall not be deemed or construed as an admission of liability by any
party released by the terms hereof, and each such party hereby expressly denies liability of any
nature whatsoever arising from or related to the subject of the within Release.




          The Releasor hereby agrees, represents and warrants that it has had advice of counsel of its
own choosing in negotiations for and the preparation of the within release, that it has read this
Release or has had the same read to it by its counsel, that it has had the within Release fully
explained by such counsel, and that it is fully aware of its contents and legal effect.




          DATED: September 3, 2009




	 	 	 	 	 	 	 	 	 	 	 	 	 
	          RELEASOR:	 	SPT Real Estate Finance, LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Shopoff Partners, L.P., a Delaware limited Partnership, sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Shopoff General Partner, LLC, a Delaware limited liability company, general partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Shopoff Properties, Trust, Inc., a Maryland corporation, Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

William A. Shopoff,
	 	 
	 

	 	 	 	 	 	 	 	 	 	President and Chief Executive Officer	 	 






Exhibit H, p. 2 of 2




 









 








Certification of Counsel




          I have advised the Releasor under the above Release of the meaning and effect of the
provisions of Section 1542 of the California Civil Code and that Releasor, acting through its
authorized agents, has voluntarily waived any rights Releasor may have thereunder, as well as under
any other statutes or common law principles of similar effect.




	 	 	 	 	 
	 

	 	 

Attorney for Releasor
	 	 






Exhibit I, p. 1 of 1




 









 





Exhibit I




SCHEDULE OF ADDITIONAL CLOSING ITEMS





	1.	 	Subdivision maps and filings with respect thereto.
	 
	2.	 	Engineering, environmental and soil reports.
	 
	3.	 	Surveys.
	 
	4.	 	Subdivision and other bonds.
	 
	5.	 	Marketing reports.
	 
	6.	 	List of deposits to utility companies.
	 
	7.	 	Copy of 2007-2008 and 2008-2009 tax bills.





Exhibit I, p. 1 of 1




 









 





Exhibit J




LITIGATION DISCLOSURE 




None




Exhibit J, p. 1 of 1





 









 








Exhibit K




September      , 2009




Commerce Title

1265 Corona Pointe Court, Suite 210

Corona, CA 92879

Attention: Steve Gomez





	 	Re:	 	Lender’s Policy No. __________         (the “Original Lender’s Policy”)





Dear Sir or Madam:




     A. Closing Documents. In connection with the transfer of certain property from
Springbrook Investments, L.P., a California limited partnership (the “Borrower”), to
SPT Real
Estate Finance, LLC, a Delaware limited liability company (the “Transferee”), we are
enclosing
herewith or you will receive directly from the Borrower (or its counsel) the following for
the
purpose of obtaining issuance of a new owner’s policy in favor of the Transferee and/or
endorsement of the above-referenced Original Lender’s Policy:




	 	1.	 	Original, executed Grant Deed (to be delivered by the Borrower);
	 
	 	2.	 	Original, executed Estoppel Affidavit, with original, executed
Partnership Authorization (to be delivered by the Borrower); and
	 
	 	3.	 	Original Promissory Note (the “Note”) dated March 29,
2006, from Borrower, as Maker, to Vineyard Bank, N.A., as endorsed and/or
assigned to Transferee, as Holder, in the original principal amount of
$5,187,000.00.





          You will also receive form the Transferee funds sufficient to cover the costs described in
paragraph D.1 below.




     B. Conditions
of Closing. You may record the Grant Deed upon fulfillment of the
conditions set forth below:




	 	1.	 	You hold the documents and funds referred to in Paragraph A
above which documents are to be duly executed and acknowledged where required.
	 
	 	2.	 	You are prepared to issue your 2006 ALTA Standard Owner’s Title Policy





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	 	 	 	(herein the “Owner’s Policy”) naming the Transferee as the fee simple owner
of the real property described in the Grant Deed (the “Property”)
and insuring the Transferee in an amount to be specified by the Transferee,
subject only to those exceptions specified in Lender’s Policy or otherwise
approved by the undersigned in writing, including the lien of the Deed of
Trust (the “Deed of Trust”) recorded on March 31, 2006 in the
Official Records of the Recorder of Riverside County, California
(“Official Records”) as document No. 2006-00229401, as modified by
that certain Modification of Deed of Trust recorded in the Official Records
on December 31, 2007, as document no. 20070772611.
	 
	 	3.	 	You have telephoned and received oral advice from Debra Dietrich of
Croudace & Dietrich LLP (949) 794-9900 that all other conditions of closing
required by the Transferee to be fulfilled have been fulfilled to the
satisfaction of the Transferee.





     C. Closing Procedures. In closing this file, you will strictly adhere to the procedures set
forth hereinbelow. All requirements with respect to closing shall be considered as having taken
place simultaneously, and no delivery shall be considered as having been made until all deliveries
and closing transactions have been accomplished.




	 	1.	 	Record the Grant Deed referred to above in Paragraph A.1 in
the Official Records of Riverside County in such a manner as will enable you
to issue the Owner’s Policy.
	 
	 	2.	 	Deliver to the undersigned a conformed copy of the Grant Deed
referred to in Paragraph A.l above and the original and two copies of each of
the Owner’s Policy.
	 
	 	3.	 	Mark the Note “CANCELLED”, deliver the original thereof to
Borrower (or its counsel) and deliver a photocopy thereof to the undersigned.





     D. General Instructions.




	 	1.	 	All costs and expenses for the Owner’s Policy, escrow fees,
photocopying, recording fees, mortgage taxes, title company services, and all
other fees, charges and taxes with respect to the closing of this transaction
shall be paid by Transferor.
	 
	 	2.	 	If you are unable to comply with these instructions and close
this escrow on or before 5:00 p.m. on September 4, 2009, or if there are to be
any changes therein, you are not to proceed without further written
authorization from the Transferee. If there are any questions concerning the
above, please call the undersigned immediately.





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          PLEASE IMMEDIATELY RETURN AN EXECUTED COPY OF THESE INSTRUCTIONS TO THE
UNDERSIGNED.




Very truly yours,




	 	 	 	 	 
	 

	 	 

CROUDACE & DIETRICH LLP
	 	 
	 
	 	 	 	 
	 

	 	Attorneys for the Transferee	 	 





The undersigned acknowledges receipt of the within recording instructions and agrees to proceed in strict accordance therewith.




COMMERCE TITLE





			
	By:	 	
 







			
	Name:	 	
 







			
	Title:	 	
 







			
	Date:	 	
 







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