exv10w4






Exhibit 10.4



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 $1,072,000 (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. 2006-0229401, as modified by that certain Modification of Deed of Trust recorded in
the Official Records on December 31, 2007 as document no. 2007-0772611 (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. 2009-170508.



     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
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”);




1









 





          (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 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.




2









 





          (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 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



3









 




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.



     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.



4









 





     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.



5









 





     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	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	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	 	 






6









 





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



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



LOTS 3 AND
4 IN BLOCK 11 OF NORTH ELSINORE TRACT, AS SHOWN BY MAP ON FILE IN BOOK 5 PAGE 105 OF
MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA;



EXCEPTING THEREFROM THAT PORTION OF LOTS 3 AND 4 DESCRIBED AS FOLLOWS:



BEGINNING
AT THE INTERSECTION OF THIRD STREET AND CAMBERN AVENUE, AS SHOWN ON SAID MAP OF THE NORTH
ELSINORE TRACT;



THENCE SOUTH 43 DEGREES 11' WEST, 158.4 FEET TO THE POINT OF BEGINNING;

THENCE SOUTH 46 DEGREES 49' EAST 825 FEET;

THENCE SOUTH 43 DEGREES 11' WEST, 158.4 FEET;

THENCE NORTH 46 DEGREES 49' WEST, 825 FEET;

THENCE NORTH 43 DEGREES 11' EAST 158.4 FEET TO THE POINT OF BEGINNING;



ALSO EXCEPTING THEREFROM THAT PORTION OF LOTS 3 AND 4 DESCRIBED AS FOLLOWS:



BEGINNING AT THE INTERSECTION OF THIRD STREET AND CAMBERN AVENUE, AS SHOWN ON SAID
MAP OF THE NORTH ELSINORE TRACT; SAID POINT BEING THE POINT OF BEGINNING;

THENCE SOUTH 43 DEGREES 11' WEST, 158.5 FEET;

THENCE SOUTH 46 DEGREES 49' EAST 825 FEET;

THENCE NORTH 43 DEGREES 11' EAST, 158.4 FEET;

THENCE NORTH 46 DEGREES 49' WEST 825 FEET TO THE POINT OF BEGINNING;



EXCEPTING THEREFROM ANY PORTIONS OF THE ABOVE DESCRIBED LEGALS LYING WITHIN THIRD STREET AND
CAMBERN AVENUE.
APN: 377-090-008-0




Exhibit A, p.1 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 $1,072,000.00 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. 2006-0229401 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.



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



Exhibit B, p.1 of 3




 









 





     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, each of 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 respective
partners, officers, directors, members, managers, agents, employees 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 $1,072,000.00 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. 2006-0229401 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 II




Partnership
Authorization




Schedule II




 









 





Exhibit E




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









 









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        ._^753014860_,,:IgtBtob:PC«lB:|O*BS«Hpftma«s9ijws»,.mmmmm_m_.,,,,,,92618100%Pn»«iii»*f!SKfifi»5i!s«i!.i*iaK,pforebptsr,«lnuiTibsT»
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mputalicriofEsSwa&dG»h»rt^andhavealotsorisropinnnta16.4»QTheprajsi^fiBbangoomputejnlsfOTHSS3liffllaf%caBwitedaxllhB6isltBrintBnitetnaci|
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ThaBsilBrisaEsJrforriaparoiBisHp,orouiliftarJtBdBsiEiriessiriCrfrfomis(orailifitntrtiaEbsaStBdsbaaartnarsnitforfetafdandCslrfomisire»n»
toEpi!pBse&andisratasingtememberWSitotis.rrtfiBngaidadforfederalandfelitomBinmroetepurpnaas.Iffeteemischanted,
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law,ft.*Dftessftorfessigsaraassoonifanj;(trfwiftBlnUJrifmttaooKiist,qaatifedfran^fsfVprofiistagingptan.
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[7131093p~^Fwm693aC(22BOB(REV0109JExhibitH,p.3of2





 









 





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 partners, officers, directors,
members, managers, agents, employees successors, heirs, and assigns, and each of them
(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
$1,072,000.00.





          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 either to issue your 2006 ALTA Standard Owner’s Title





2









 






	 	 	 	Policy (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 provided to you
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.1 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.





3









 





          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:
	 	 	 	 
	 

	 	 

	 	 







4