Exhibit 10.7







Exhibit 10.7




RECORDING REQUESTED BY:

AND WHEN RECORDED MAIL TO:




La Jolla
Bank, FSB

390 W. Valley Parkway

Escondido, CA 92025




Loan No. 1013023934




[Space above this line for Recorder’s use.] 





LOAN ASSUMPTION AND SECURITY AGREEMENT,

AND NOTE MODIFICATION AGREEMENT





THIS AGREEMENT is entered into and dated for reference purposes as of, AUGUST 1, 2009, by and
among LA JOLLA BANK, FSB, (“Lender”), and NETREIT, A CALIFORNIA CORPORATION
(“Purchaser”), with reference to the following facts:




	A.	 	Lender holds a loan (the “Loan”) evidenced by an Adjustable Rate Note dated MARCH
16, 2004, payable by MONTEREY PALMS SELF STORAGE, LLC.(the “Original Borrower”), to the
order of Lender in the original principal amount of $5,200,000.00 (the “Note”) and a
Change in Terms Agreement dated December 1, 2005. The Note is
secured by, among other things,
a Deed of Trust, dated MARCH 16, 2004, executed by the Original Borrower, as trustor, in favor
of OLD REPUBLIC TITLE COMPANY, as trustee, for the benefit of Lender, as beneficiary,
recorded in the Official Records of RIVERSIDE COUNTY, State Of CALIFORNIA, (the
“Official Records”) on MARCH 25, 2004, as Document No. 2004-0208211 (the “Deed of
Trust”) and a Modification of Deed of Trust dated December 1, 2005 and recorded on
December 22, 2005 as Document No. 2005-1057223 in the official records of Riverside county,
state of California.

	 
	B.	 	The Deed of Trust constitutes a first lien on the Original Borrower’s fee simple estate as
more particularly described in Exhibit “A”. The Original Borrower’s right, title and
interest in and to the land and the improvements located on the land, are collectively
referred to in this Agreement as the “Property”.

	 
	C.	 	Concurrently with the recordation of this Agreement in the Official Records, Purchaser has
acquired title to the Property from the Original Borrower. In connection therewith,
Purchaser has requested that Lender consent to Purchaser’s assumption of the Loan. Lender is
willing to permit Purchaser to assume the Loan on the terms and subject to the conditions
contained in this Agreement.






NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Lender and Purchaser agree as follows:




	1.	 	Assumption of Loan. Effective as of the date on which Purchaser acquires title to
the Properly, which shall conclusively be deemed to have occurred no later than the date on
which this Agreement is recorded in the Official Records, Purchaser hereby assumes and agrees
to perform fully and when due each and every monetary and non-monetary obligation of the
Original Borrower under the Note, the Deed of Trust and every other instrument, certificate,
agreement and document that sets forth or secures any obligations of the Original Borrower
relating to the Loan (collectively, the “Loan Documents”). Lender hereby consents to
Purchaser’s assumption of the Loan.

	 
	2.	 	Assumption Fee. Concurrently with the recordation of this Agreement, Purchaser
shall pay to Lender an assumption fee in the amount of $0.00. If Purchaser is acquiring the
Real Property through an escrow (the “Escrow”), this paragraph constitutes Purchaser’s
irrevocable instructions to the holder of the Escrow to remit such assumption fee to Lender
upon the closing of the Escrow from the funds then held in the Escrow for Purchaser’s account.

	 
	3.	 	Purchaser’s Receipt of Loan Documents. Purchaser acknowledges having received a
complete copy of each Loan Document, including all riders and exhibits thereto, each in the
form executed and delivered by the Original Borrower.





 


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	4.	 	Lender’s Costs; Title Endorsement. Purchaser shall pay, immediately upon Lender’s
written request, all out-of-pocket expenses incurred by Lender in connection with Purchaser’s
assumption of the Loan, including the fees for recording this Agreement in the Official
Records, the cost of obtaining a new Loan Policy of Title Insurance, or an ALTA No. 10, Policy
Bring Down endorsement to Lender’s policy of title insurance insuring the continued
validity and first lien priority of the Deed of Trust. If for any reason
Lender’s title insurer is unwilling or unable to issue such ALTA No. 10, Policy Bring Down
endorsement, then Lender, at its election, shall have the right, but not the obligation, to
revoke Lender’s consent to Purchaser’s assumption of the Loan and to declare the Loan due and
payable in full. Purchaser acknowledges that as a condition of issuing the ALTA No. 10 Policy
Bring Down Form endorsement. Lender’s title insurer may require that the Original Borrower or
Purchaser obtain and deliver to the title insurer for recordation a subordination agreement in
form and content satisfactory to the title insurer, executed and acknowledged by each person or
entity that holds or proposes to acquire any lien or security interest on or in the Property or
any part thereof. Purchaser hereby agrees to obtain any and all such subordination agreements at
no expense whatsoever to Lender, and to deliver a complete and correct copy of each subordination
agreement to Lender concurrently with the Purchaser’s receipt thereof.

	 
	5.	 	Non-Recourse. Notwithstanding anything contained herein to the contrary, Lender by
its acceptance hereof, hereby agrees that none of the partners of Borrower, individually,
shall ever have any personal liability for the payment of the indebtedness evidenced hereby or
for the performance of any covenant, condition or term of this Note or the Deed of Trust or
any other instrument or other agreement existing as security for the payment of this Note.
Such non-personal liability shall in no way affect or impair the rights of the holder hereof
to realize upon the security thereof in the default, or levy execution of any money,
judgement, deficiency, or otherwise against Borrower or any property of Borrower. Lender
hereby agrees that at such time as a default shall occur, the sole remedies of the legal
holder hereof, or the Lender, or the Trustee, or the Beneficiary under the Deed of Trust,
shall be the foreclosure of the properly covered by the Deed of Trust or an action against
Borrower or the assets of Borrower and Lender shall not be entitled to a personal or
deficiency judgement against any partner.

	 
	6.	 	Original Borrower and Guarantor Released. Upon Purchaser’s satisfaction of all
conditions and requirements of Lender to the this assumption, including, without limitation,
the payment of all principal reductions, fees and expenses, the closing of this assumption,
and the recordation of all agreements required to be recorded, this Agreement shall release
the Original Borrower(s) and Guarantors from any of their respective liabilities under the Loan
Documents and/or Guaranties.

	 
	7.	 	Costs of Suit. If any legal action, suit, or other proceeding is brought by either
party to enforce any provision of this Agreement, to rescind or otherwise set aside or vacate
this Agreement, or to remedy any breach or alleged breach of this Agreement, the party who
obtains substantially the relief sought by it in such action, suit or proceeding shall be
entitled to recover from the other party all costs and expenses of suit, including actual
attorneys’ fees.

	 
	8.	 	No Novation. This Agreement shall not be construed as a novation, it being the intent
of the parties that the Loan Documents shall remain in full force and effect and that the lien
priority of the Deed of Trust relative to any other lien or encumbrance on the Property shall
not in any way be affected by this Agreement.

	 
	9.	 	Notices. All notices and other communications required or permitted under this
Agreement shall be in writing and shall be personally delivered or sent by first class United
States mail, and if mailed, shall be deemed received on the third business day after deposit
in the mail in the State of California, postage prepaid, addressed to
Lender at 390 W. Valley
Parkway, Escondido, California 92025, or to Purchaser at 1282 PACIFIC
OAKS PLACE, ESCONDIDO,
CA 92029. Notice of any change of either party’s address shall be given by written notice in
the manner set forth in this paragraph.

	 
	10.	 	Counterparts. This Agreement may be executed in counterparts, each of which shall be
deemed an original and all of which together shall constitute one and the same document.

	 
	11.	 	Further Actions. The parties shall execute such further documents and take such
further actions as may be necessary to carry the provisions of this Agreement into effect.

	 
	12.	 	Construction of Agreement. Paragraph headings in this Agreement are included solely
for ease of reference and shall not affect the construction of this Agreement. This Agreement
shall be construed as if it had been prepared jointly by Lender and Purchaser. Unless
otherwise indicated, all references to paragraphs are to paragraphs in this Agreement. Unless
otherwise indicated, each exhibit referred to in this Agreement is an exhibit attached to this
Agreement and is incorporated herein by reference. When used in this Agreement, the words
“include”, “includes”, and “including” shall be construed as if immediately followed by the
words “without limitation”. If any portion of this Agreement shall be declared to be invalid,
illegal or unenforceable by any court of competent jurisdiction, such portion shall be deemed
severed from this Agreement and the remaining portions shall continue in full force and effect. CALIFORNIA law shall govern the
construction and enforcement of this Agreement.





 


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	13.	 	Entire Agreement. This Agreement is intended by the parties to be a final
expression of their agreement with respect to the subject matter hereof and a complete and
exclusive statement of the terms of such agreement between the parties. This Agreement
supersedes any and all prior understandings, written or oral, between the parties.

	 
	14.	 	No Relationship.
Purchaser, Original Borrower(s) and each Guarantor represent and
warrant to Lender, that neither Original Borrower(s) nor any Guarantor have any interest in
or is anyway related to or affiliated with Purchaser or any party holding and interest in
Purchaser or the Property.






IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above
written.



	 	 	 	 	 
	LENDER



LA JOLLA BANK, FSB

 	 	 
	
 	 	 
	BY: R.W. LOVELESS, AVP 	 	 
	 	 	 
	 
	PURCHASER



NETREIT

 	 	 
	
 	 	 
	BY: JACK K. HEILBRON, PRESIDENT 	 	 
	 	 	 
	 



CONSENT OF ORIGINAL BORROWER AND GUARANTORS




The undersigned Original Borrower and
Guarantors consent to the execution and delivery of this Agreement.




ORIGINAL BORROWER




MONTEREY PALMS SELF STORAGE, LLC




BY: SOVREN VENTURES II, LLC, MANAGING MEMBER OF

MONTEREY PALMS SELF STORAGE, LLC




BY: GRANITE SOVREN PARTNERS, LLC, MANAGING MEMBER OF

SOVREN VENTURES II, LLC




BY: GRANITE INVESTMENT GROUP, MANAGING MEMBER OF

GRANITE SOVREN PARTNERS. LLC





 


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