Document:

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

 

	Exhibit GFormofForm593YEARQMjroBNIjtjCjflM_2009RealEstateWJthtolclimi593CPartiSaltedhhfmttecsftii8iB’JsJ8temt(tyiitr’isi(ifwgiiipgj.
Name’~’’(SBNsrmNSpBiBs’sfROPsNumBfjoirtfyownwi)SFCUsttlWiiSHotmHra^riiyMriiiSd^f^SflJi^^’POBiTo’pHS^):IfFBNDKCorpKLaasitetaaj^jDt_m
        ._^753014860_,,:IgtBtob:PC«lB:|O*BS«Hpftma«s9ijws»,.mmmmm_m_.,,,,,,92618100%Pn»«iii»*f!SKfifi»5i!s«i!.i*iaK,pforebptsr,«lnuiTibsT»
fid’»ai!f/;Isataiiiiteiiiiiii*fMi^^(Seaft»tfA»MiwindmIwinicUisw,)itartilewiiMtta:ttt*Wfmaftfctsri»hrawMateiftij:1.*OTheproperty(jialilBsastester’s
(sadassderrJ/B,ifbeingtold%thadssrftafssBiais^pfrHpsitaciJiiiKiistlEiiitemaaningdInStreilHewenitBCffifepCJSaSailSI.2.•QThetain(mrtucaten,«
keinjsdriteihedaiBilflnrBeitatB:!lastusedDiepfopsr^ffltNssHsrt(datstofa)piirra^lraattenoeHiaHnihsrassiisp(rfIRESetion121wthmjtffigaidlBlhstffai
^irtniaparini.3.•OTheBelieftiBBalossortarnpinfirCjifeniareonstastpLtpoaesaotfeeata.ToctekttisiatyajmiEtcompbtaform^E,fiKdfeiafefiittinldnjDi’
mputalicriofEsSwa&dG»h»rt^andhavealotsorisropinnnta16.4»QTheprajsi^fiBbangoomputejnlsfOTHSS3liffllaf%caBwitedaxllhB6isltBrintBnitetnaci|
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thatisalhsrqiffllrBedtirottghftBCsltfiimiBSEcreteiyofStatesteapsimBnentpteaafbLeinesiinCsjrfomia.?.*I^
ThaBsilBrisaEsJrforriaparoiBisHp,orouiliftarJtBdBsiEiriessiriCrfrfomis(orailifitntrtiaEbsaStBdsbaaartnarsnitforfetafdandCslrfomisire»n»
toEpi!pBse&andisratasingtememberWSitotis.rrtfiBngaidadforfederalandfelitomBinmroetepurpnaas.Iffeteemischanted,
ftapartHBiafipmUSmuststBwfSttoldenncnreiirlBMpartnersormsmbiis.&»DItsBsifarisat»samptBtr%UBriBrGa!Sornianrfedara!
law,ft.*Dftessftorfessigsaraassoonifanj;(trfwiftBlnUJrifmttaooKiist,qaatifedfran^fsfVprofiistagingptan.
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feramaunteto«Waid.id.«DTtalraBiferqiflHrtaEB5aara^an«»!slikBlirrfBM*ai^BSM98nwBfltaB(rftfiCSafliori1D81.11*DTg«tng^r^nH£«a^6mdNi9^^nd«r^
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«hinBtBlltriBntpajnent.topiwsrfFarmSIS1,RealEststsWthMdrgS^«iW«w»k£«rnent,mdihtpramfeaoiyrwtamatttdwd.iIstt|¥Silterkiitutet,,
UnderpnihtBBrrfp«r|uiy,Ihsreb^Cir%thtrtfts))*nffflal8f<pwwdsdabcvaB.tottahartofmyltnwlad^,maendcorrectiftcndtinnEchanp,
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n«orfrairfiisstarrttantotB»ort1htsBate.S»lter%NaititendT*SBlteftS^aatre.^Cat,SpoussVFIOfisMaRieSpsttEs’sfBDPsSipiaiErefeteftsSHm%tttt*»S!^
srHIKtet«»»«•»FtitIif*»1orraistssrea.SuSeitlynuehatiidffliifbctsinPMi!,jMEreesarrtptframreaiesta&xitfthdilrg.ifjouchecfcsdanytosinRut!!!,
ywnaippal%forapaRiaJorcoiiflitesSiialdingeramption.ByoudidfBtctactar^toxinPartlierParttit,thfiailhhddingoilbe313%(.0333)
sfthstotaleofespricennhsofrSonalgahtnaals«itiaddi^eiieuitEsnSadtysaferonForaSS3,RralEstateWntihoMsis.ikBtsttraaftSyeaaawiSWdupon,
tetsiihtaidingagtntbbouhgim^bhenseojr?ofPomE^.f&sdh£copytaAslowerfruntafjaurCaliforniainasnBtasumandmateacopySsryoarrecaKiii.
teepftnnSKGforfiseyearsfollo^inrjfacloseoftheSrartEssion.YoumnBtfurnishInsformtotheFTBuponrsquaBtRsrPftBSEy«c«»,fettofmFFB1181.’~~~
[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:
	 	 	 	 
	 

	 	 

	 	 

4EX-10.1 EMPLOYMENT AGREEMENT/TIM CARTER

Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

          This EXECUTIVE EMPLOYENT AGREEMENT (the “Agreement”) is entered into as of the 30th
day May, 2007 (the “Effective Date”) by and between OMNIAMERICAN BANK (the “Bank”), a federally
chartered savings bank, and Tim Carter (the “Executive’’).

WITNESSETH:

          WHEREAS, the Bank desires to engage the services of the Executive on the terms and conditions
set forth herein and, for the purpose of effecting the same, the Board of Directors of the Bank
(the “Board”) has approved this Agreement and authorized its execution and delivery on the Bank’s
behalf to the Executive;

          WHEREAS, the Executive will be the duly elected President and Chief Executive Officer of the
Bank and as such will be a key executive officer of the Bank whose dedication, availability, advice
and counsel to the Bank is deemed important to the Bank and the Board;

          WHEREAS, the services of the Executive, his experience, knowledge, reputation and contacts
within the banking industry are valuable to the Bank;

          WHEREAS, the Bank wishes to attract and retain such well-qualified executives, and it is in
the best interests of the Bank and of the Executive to secure the services of the Executive; and

          WHEREAS, the Bank considers the establishment and maintenance of a sound management team to be
part of its overall corporate strategy and to be essential to protecting and enhancing the best
interests of the Bank; and

          WHEREAS, the Bank: is regulated by the Office of Thrift Supervision (the “OTS”).

          NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy whereof each
party hereby acknowledges, the Bank and the Executive hereby agree as follows:

          1.     EMPLOYMENT: The Bank shall, and does hereby, employ the Executive, and the
Executive shall, and does hereby, accept such employment, for the period commencing upon the
Effective Date and continuing for a period of two (2) years thereafter, subject to earlier
termination as provided herein (the “Employment Period”). Beginning on the second anniversary of
the Effective Date and on each anniversary of the Effective Date thereafter, the Employment Period
shall be extended by additional one-year periods; provided, however, that either party may cause
the Employment Period to expire by giving written notice to the other party not less than ninety
(90) days prior to the next annual anniversary date. The foregoing notwithstanding, the Employment
Period shall not be extended unless, prior to each such anniversary date, the Board of Directors
shall have explicitly reviewed the performance of the Executive and approved the extension.
Reference herein to the Employment Period shall refer to both such initial period and such extended
periods.

          2.     EXECUTIVE DUTIES: Executive shall, during the Employment Period, and in his
capacity as President and Chief Executive Officer, devote his full business time and energy to the
business, affairs and interests of the Bank and serve it diligently and to the best of his ability

 

 

in compliance with all applicable laws, regulations, federal agency orders, OTS policies, and
Bank policies. As such, the Executive shall render administrative and management services as are
customarily performed by persons situated in similar executive capacities, and shall have such
other powers and duties as the Board may prescribe from time to time. The Executive shall also
render services to any affiliates or subsidiaries of the Bank as requested by the Board from time
to time consistent with his executive position. The Executive’s duties shall include, but not be
limited to, responsibility for: (a) oversight over the Bank’s compliance with the Bank Secrecy Act
and its applicable implementing regulations and with requirements applicable to the Bank’s
information technology operations; and (b) the development and implementation of an organizational
structure and communication system for the Bank to ensure timely and proper dissemination of
regulatory information and requirements, policies and procedures, and strategic goals to the
appropriate staff of the Bank. The Executive may (i) serve on corporate or charitable boards or
committees and (ii) manage personal investments, so long as such activities do not interfere
materially with the performance of his responsibilities hereunder and are in compliance with all
applicable regulations including 12 C.F.R. §563.200 and 12 C.F.R. §563. 201. The duties and
responsibilities of the Executive, as described herein, shall collectively constitute the “Duties.”

          The Executive represents that he has no agreements with, or obligations to, any party which
conflict, or may conflict, with the interests of the Bank or with his performing the Duties.

          3.        COMPENSATION:

          (a)     The Bank shall pay the Executive, as compensation for the Duties rendered by him to
the Bank during the Employment Period, a base salary at an annual rate not less than
$350,000, subject to deductions for federal income taxes and other deductions as required by
law or as authorized by the Executive, which compensation shall be payable in accordance
with the Bank’s customary payroll practices (the “Base Salary”). The Base Salary shall be
reviewed by the Board not less often than annually. Any adjustments in the Base Salary or
other compensation shall in no way limit or reduce any other obligation of the Bank
hereunder.

          (b)     In addition to the Base Salary the Executive shall be entitled to receive an annual
incentive bonus in the amount (if any) as determined by the Board, in its sole discretion,
based upon the Board’s review of the Executive’s performance and the financial condition of
Bank.

          (c)     The Executive shall be entitled to annual paid vacation in accordance with the
policies established by the Board for executive officers, which vacation shall be in no
event less than four (4) weeks per year.

          (d)     During the Employment Period, the Bank shall provide the Executive with an
automobile exclusively for his business use under this Agreement, or shall reimburse
Executive for the use of his personal automobile when conducting Bank business in accordance
with OmniAmerican’s normal policy. In the event an automobile is furnished by the Bank, it
shall be fully maintained by the Bank, and the Bank shall provide insurance against
liability that results from the business use of the automobile. Executive

2

 

shall be responsible for properly preventing the loss, theft, or destruction of the
automobile, including its garaging at the Bank’s place of business, the expense of which,
however, shall be paid by the Bank.

          (e)     The Bank shall pay the monthly dues of the Executive’s membership in Colonial
Country Club, the Fort Worth Exchange Club, the Fort Worth Club, and the Rotary Club of Fort
Worth, all in Tarrant County, Texas.

	 	4.	 	PARTICIPATION IN BENEFIT PLANS, REIMBURSEMENT OF BUSINESS EXPENSES AND
OTHER BENEFITS:

          (a)     During the Employment Period, the Executive shall be eligible to participate in any
pension, group insurance, hospitalization, deferred compensation or other benefit, bonus or
incentive plan of the Bank presently in effect or hereafter adopted by the Bank which is
generally available to any employee of executive status.

          (b)     During the Employment Period, to the extent that the Executive’s reasonable and
necessary business expenditures are substantiated by the Executive in accordance with
applicable policies of the Bank, the Bank shall reimburse the Executive promptly for such
business expenditures.

	 	5.	 	CONFIDENTIALITY:

          (a)     Upon the Effective Date, the Bank shall, and is obligated to, provide the Executive
with the right and ability to access various Confidential Information, as defined below,
belonging to the Bank which is necessary for the Executive to perform the Duties, to which
the Executive has not had prior access. The Executive acknowledges that all information
related to the Bank’s confidential, trade secret and proprietary information concerning (i)
the identity, credit and financial data and special needs of the Bank’s current and
prospective customers, the Bank’s current and prospective services, the Bank’s business
projections and market studies, the Bank’s business plans and strategies, the Bank’s studies
and information concerning special services unique to Bank; (ii) the Bank’s employees and
independent contractors; and (iii) the Bank’s compensation and benefits as described in this
Agreement are va1uable, special and unique assets which are not available to the general
public (collectively, the “Confidential Information”). The Executive further acknowledges
and agrees that he is being provided the Confidential Information in exchange for his
execution of the NONCOMPETITION and NONSOLICITATION provisions set forth herein, that the
Confidential Information is essential to the performance of the Duties, that the
Confidential Information is the exclusive property of the Bank and that this consideration
constitutes fair and adequate consideration for his execution of this Agreement in regards
to the NONCOMPETITION and NONSOLICITATION provisions.

          (b)     The Executive shall not, without the prior written consent of the Bank, during the
Employment Period or at any time thereafter, use himself or disclose to any third party by
any method whatsoever any of the Confidential Information. If the Executive’s employment
hereunder is terminated for any reason, the Executive shall

3

 

return all Confidential Information to the Bank immediately upon its request and shall
not take originals or copies of any records, papers, programs, computer software and
documents of whatever nature containing Confidential Information.

          The foregoing covenants shall not prohibit the Executive from disclosing Confidential
Information to other employees of the Bank or any third parties to the extent that such disclosure
is necessary to performing the Duties under this Agreement or as otherwise required by law.

          6.     NONCOMPETITION: Ancillary to this otherwise enforceable Agreement and in exchange
for the Executive being granted the right to access the Confidential Information which the Bank
desires to protect, during the Employment Period and for a period of twelve (12) months from and
after the expiration or termination of the Employment Period, the Executive shall not, either as a
sole proprietor, partner, shareholder, director, employee, independent contractor or in any other
capacity, directly or indirectly, provide services identical, or similar, to the Duties hereunder
to any financial institution in Tarrant, Dallas, Denton, Johnson and Hood Counties in the State of
Texas and any County adjacent to such Counties.

          The Executive acknowledges that the need for this Section relates to the Confidential
Information to which the Executive has been provided access as a result of his executive position
with the Bank.

          7.     NONSOLICITATION: Ancillary to this otherwise enforceable agreement and in exchange
for the Executive being granted the right to access the Confidential Information which the Bank
desires to protect, during the Employment Period and for a period of twelve (12) months from and
after the expiration or termination of the Employment Period, the Executive shall not, either as a
sole proprietor, partner, shareholder, director, employee, independent contractor or in any other
capacity, directly or indirectly, hire, engage or solicit business from, as the case may be, any
Bank employee, independent contractor or customer, respectively, who was a Bank employee,
independent contractor or customer during the twelve (12) month period prior to the date the
Employment Period expired or was terminated, for the purpose of conducting a business relationship.

          8.     INCAPACITY: In the event the Executive is unable to perform the Duties on a
full-time basis for a period of six (6) consecutive months by reason of illness, injury, physical
or mental disability (collectively, “Incapacity”), the Bank may terminate this Agreement. For
purposes of this Agreement, “Incapacity” shall mean the inability of the Executive, as determined
by the Board, to perform the essential functions of the Duties, with or without reasonable
accommodation, due to a medically determinable physical or mental condition deemed to be a
disability under the Americans with Disabilities Act.

          9.     DEATH: In the event of the Executive’s death during the Employment Period, this
Agreement shall automatically terminate as of the end of the month in which the Executive dies.

          10.     AT WILL: Either party to this Agreement may terminate this Agreement at any time
for any or no reason; provided, however, in the event of a termination pursuant to this Section 9,
the party so terminating this Agreement shall provide at least ninety (90) days prior

4

 

written notice to the other party. Any termination by the Bank pursuant to this Section shall
be deemed to be termination without Cause (as defined below). Notwithstanding the above, the Bank
may, at its discretion, terminate the Executive without ninety (90) days prior written notice, but
if the Bank fails to provide such notice, the Bank will pay the Executive an additional twenty-five
percent (25%) of the amount of the Base Salary then in effect. Any termination by the Executive
pursuant to this Section shall be deemed to be termination without Good Reason.

          11.     Termination FOR CAUSE:

          Notwithstanding the provisions of Section 1 of this Agreement, the Board may, in its sole
discretion, immediately terminate this Agreement for Cause. For the purposes of this Agreement,
“Cause” shall mean any of the Executive’s:

          (a)     personal dishonesty;

          (b)     incompetence;

          (c)     willful misconduct;

          (d)     breach, of fiduciary duty involving personal profit;

          (e)     intentional failure to perform the Duties, including but not limited to failure to
follow the instructions of the Board;

          (f)     willful violation of any law, rule, or regulation (other than traffic violations or
similar offenses) or final cease-and-desist order;

          (g)     material breach of any provision of this Agreement;

          (h)     conviction of a misdemeanor involving moral turpitude or a felony;

          (i)     engaging in willful misconduct in the course and scope of his employment with the
Bank, including his indecency, immorality, gross insubordination, dishonesty, unlawful
harassment, use of illegal drugs, or fighting;

          (j)     prohibition from engaging in the business of banking by any governmental regulatory
agency having jurisdiction over the Bank; or

          (k)     conviction of any criminal offense involving dishonesty or a breach of trust or
money laundering or any agreement by the Executive to enter into a pretrial diversion or
similar program in connection with a prosecution for such offense.

          Termination of the Executive’s employment by the Bank for Cause hereunder shall be
communicated by written notice of termination to the Executive. A notice of termination pursuant to
this Section shall set forth with particularity the facts and circumstances claimed to provide a
basis for termination of employment for Cause under the provision so indicated.

          12.     RESIGNATION WITH GOOD REASON:

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          (a)     The Executive may resign for Good Reason (as hereafter defined) at any time by
giving not less than ninety (90) days written notice to the Bank. The notice of resignation
shall set forth in reasonable detail the facts and circumstances claimed to provide a basis
for a resignation for Good Reason. For purposes of this Agreement, “Good Reason” shall mean
termination of this Agreement by the Executive for any of the following reasons:

          (i)     Other than as a result of written direction from the OTS, the assignment of
duties to the Executive by the Bank which (A) are materially different from the
Duties on the Effective Date, or (B) result in the Executive having significantly
less authority and/or responsibility than he has on the Effective Date, without his
express written consent;

          (ii)     The removal of the Executive from or any failure to re-elect him to the
positions of President and Chief Executive Officer, except in connection with a
termination of his employment by the Bank for Cause or by reason of the Executive’s
Incapacity;

          (iii)     A reduction by the Bank of greater than five percent (5%) of the
Executive’s then current Base Salary;

          (iv)     The failure of the Bank to provide the Executive with substantially the
same fringe benefits (including paid vacations) that were provided to him upon the
Effective Date, provided however, that any elimination or modification of any fringe
benefit program that is applicable either to greater than five employees or to
senior executive officers as a group (as “senior executive officer” is defined in 12
C.F.R. Section 563.555) shall not violate this provision; or

          (v)     The Bank requires the Executive to be based anywhere other than at a
location within a fifty (50) mile radius of Fort Worth, Texas, without the
Executive’s express prior written consent, except for required travel on business of
the Bank.

        13.     EFFECT OF TERMINATION ON COMPENSATION:

          (a)     Termination by the Executive or the Death or Incapacity of the Executive.
If this Agreement is terminated by the Executive for other than Good Reason, death or
Incapacity, then the Executive or his heirs, as the case may be, shall be entitled to
receive (i) the Base Salary up to the date when such termination occurs and (ii) payment for
any unused vacation. Payment of unused vacation is contingent upon the Executive providing
the required ninety (90) days written notice. In the event of a termination pursuant to the
death or Incapacity of the Executive, the Bank shall be relieved of all its obligations
under this Agreement, except that the Bank shall pay to the Executive, or his estate in the
event of his death, the Executive’s Base Salary through the end of the month during which
such termination shall have occurred, in addition to any unused vacation pay. All such
payments to the Executive or his estate shall be made in the same manner as other payroll
obligations of the Bank. Payments are subject to deductions for applicable taxes.

6

 

          (b)     Termination by the Bank without Cause or by the Executive with Good Reason.
If the Agreement is terminated by the Bank without Cause or by the Executive with Good
Reason, the Executive shall be entitled to receive as severance pay (in addition to the
payment of any Base Salary earned through the date of such termination) a sum equal to one
(1) times the amount of the Base Salary then in effect, payable in accordance with the
Bank’s customary payroll practices, in twelve (12) equal monthly installments beginning
fifteen (15) days following the date of such termination or resignation.

          (c)     Termination by the Bank for Cause. If this Agreement is terminated by the
Bank for Cause, the Executive shall be entitled to receive the Base Salary up to the date
when such termination occurs. The Executive shall not be entitled to further Base Salary or
other compensation or benefits after the termination date, except as required by law.
Payments are subject to deductions for applicable taxes.

          (d)     Required Regulatory Provisions. If the Executive is suspended and/or
temporarily prohibited from participating in the conduct of the Bank’s affairs by a notice
served under Section 8(e)(3) or 8(g)(1) [12U.S.C. §§1818(e)(3) and 1818(g)(1)] of the
Federal Deposit Insurance Act, 12 U.S.C. § 1811 et seq. (the “Federal Deposit
Insurance Act’’), the Bank’s obligations under this Agreement shall be suspended as of the
date of service unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, the Bank may in its discretion (i) pay the Executive all or part of the
compensation withheld while its contract obligations were suspended, and (ii) reinstate (in
whole or in part) any of its obligations which were suspended.

          If the Executive is removed and/or permanently prohibited from participating in the conduct of
the Bank’s affairs by an order issued under Section 8(e)(4) or 8(g)(l) of the Federal Deposit
Insurance Act [12 U.S.C. §§ 1818(e)(4) or 1818(g)(1)], all obligations of the Bank under this
Agreement shall terminate as of the effective date of the order, but vested rights of the
contracting parties shall not be affected.

          If the Bank is in default [as default is defined in Section 3(x)(l) of the Federal Deposit
Insurance Act], all obligations under this Agreement shall terminate as of the date of default, but
this paragraph shall not affect any vested rights of the contracting parties.

          All obligations under this Agreement shall be terminated, except to the extent it is
determined that continuation of this Agreement is necessary for the continued operation of the
Bank:

          (i)     by the Director of the Office of Thrift Supervision (the “Director”) or his
or her designee, at the time the Federal Deposit Insurance Corporation enters into
an agreement to provide assistance to or on behalf of the Bank under the authority
contained in, Section 13(c) of the Federal Deposit Insurance Act; or

          (ii)     by the Director or his or her designee, at the time the Director or his or
her designee approves a supervisory merger to resolve problems related to

7

 

operation of the Bank or when the Bank is determined by the Director to be in
an unsafe or unsound condition.

          Any rights of the parties that have already vested, however, shall not be affected by such
action.

          Notwithstanding the above, if any severance payment to the Executive hereunder would cause the
Bank to contravene any law, regulation or policy applicable to the Bank, including the Internal
Revenue Code of 1986, as amended (the “Code”), Section 409A, the Bank and the Executive agree that
such severance payment shall be made only to the extent permitted by law, regulation and policy,
and the remainder of such severance payment shall be made from time to time at the earliest time
permitted by law, regulation and policy.

          (e)     Limitation of Benefits. It is the intention of the parties that no payment
be made or benefit provided to the Executive that would constitute an “excess parachute
payment” within the meaning of Section 280G of the Code and any regulations thereunder,
thereby resulting in a loss of an income tax deduction by the Bank or the imposition of an
excise tax on the Executive under Section 4999 of the Code. If the independent accountants
serving as auditors for the Bank determine that some or all of the payments or benefits
scheduled under this Agreement would constitute nondeductible excess parachute payments by
the Bank under Section 280G of the Code, then the payments or benefits scheduled under this
Agreement will be reduced to one dollar less than the maximum amount which may be paid or
provided without causing any such payments or benefits scheduled under this Agreement to be
nondeductible. The determination made as to the reduction of benefits or payments required
hereunder by the independent accountants shall be binding on the parties. The Executive
shall have the right to designate within a reasonable period which payments or benefits will
be reduced; provided, however, that if no direction is received from the Executive, the Bank
shall implement the reductions under this Agreement in its discretion.

          The Executive’s entitlement to any payment hereunder is strictly contingent on the Executive’s
complying with the terms of the NONCOMPETITION and NONSOLICITATION provision set forth above. Any
breach by the Executive of the terms of the NONCOMPETITION and NONSOLICITATION provisions shall
allow the Bank to immediately cease payment hereunder and the Bank shall have no further
obligations to the Executive. This remedy is in addition to others available to the Bank under law
or as provided elsewhere herein. Any termination of payments pursuant to the above provisions shall
not be interpreted to limit or alter the scope or duration of the Executive’s obligations pursuant
to the NONCOMPETITION and NONSOLICITATION provisions herein.

          No termination under the NONCOMPETITION or NONSOLICITATION provisions shall terminate or
adversely affect any rights of the Executive then vested under the provisions of any disability or
other benefit program of the Bank.

          Any payments made to the Executive pursuant to this Agreement or otherwise, are subject to and
conditioned upon their compliance with 12 U.S.C. Section 1828(k) and IDIC regulations 12 C.F.R.
Part 359, Golden Parachute and Indemnification Payments.

8

 

                    (f)     Code Section 409A. Notwithstanding any provision of this Agreement to the
contrary, if at the time of the Executive’s termination of employment, the Executive is a
“specified employee” as defined in Section 409A of the Code, no payment or benefit will be paid
until the earlier of (A) the date which is 6 months after the date of the Executive’s termination
of employment, or (B) the date of the Executive’s death.

          Notwithstanding any provision of this Agreement to the contrary, to the extent that any
payment under the terms of this Agreement would constitute an impermissible acceleration of
payments under Section 409A of the Code or any regulations or Treasury guidance promulgated
thereunder, such payments shall be made no earlier than at such times allowed under Section 409A of
the Code.

          If any provision of this Agreement (or of any award of compensation) would cause the Executive
to incur any additional tax or interest under Section 409A of the Code or any regulations or
Treasury guidance promulgated thereunder, the Bank may reform such provision; provided that the
Bank shall (i) maintain, to the maximum extent practicable, the original intent of the applicable
provision without violating the provisions of Section 409A of the Code and (ii) notify and consult
with the Executive regarding such amendments or modifications prior to the effective date of any
such change.

          14.     SUCCESSOR LIABILITY: The Bank shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Bank, or either one of them, by agreement in form and substance
satisfactory to the Executive, to expressly assume and agree to perform this Agreement in its
entirety. The Executive shall not unreasonably withhold his consent to the form or substance of any
such agreement.

          15.     BANK REGULATION COMPLIANCE: It is the intention of the parties that this Agreement
complies with all applicable regulations and written directives of the FDIC and the OT5. Any
provision of this Agreement which is deemed not in compliance with any applicable regulation or
written directive shall be automatically reformed to comply with such regulation or directive as
most nearly carries out the intent and purpose of this Agreement.

          16.     NOTICES: For the purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or mailed by United States registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:

	 	 	 
	If to the Executive:

	 	Tim Carter
	 

	 	3408 Rustwood Court
	 

	 	Fort Worth, Texas 76109
	 
	 	 
	 
	 	 
	If to the Bank:

	 	OmniAmerican Bank
	 

	 	1320 S. University Drive,
	 

	 	Suite 900
	 

	 	Fort Worth, Texas, 76107

9

 

	 	 	 
	 

	 	Attention: Chairman of the Board

          or at such other address as any party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon receipt.

          17.     MODIFICATION - WAIVER - APPLICABLE LAW - ENTIRETY: No provisions of this Agreement
may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in
writing, signed by the Executive and on behalf of the Bank by such officer as may be specifically
designated by the Board. No waiver by either party hereto at the time of any breach by the other
party hereto of, or in compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. Any prior agreement between the parties
is hereby voided. Otherwise, no agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either party which are not set
forth expressly in this Agreement. The validity, interpretation, construction and performance of
this Agreement shall be governed by the Rules and Regulations of the OTS and by the laws of the
State of Texas. The Agreement is subject to the written notice of non-objection by the OTS.

          18.     INVALIDITY - ENFORCEABILITY: The invalidity or unenforceability of any provisions
of this Agreement shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect. Any provision in this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only
to the extent of such prohibition or unenforceability without invalidating or affecting the
remaining provisions of this Agreement, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

          19.     INJUNCTIVE RELIEF: Notwithstanding the arbitration provision set forth below, if
the Executive violates any of the provisions set forth in Sections 5, 6, or 7 of this Agreement,
the Executive acknowledges that the Bank would suffer immediate and irreparable harm and would not
have an adequate remedy at law for money damages. Accordingly, the Executive acknowledges that,
without the necessity of proving actual damages or posting bond or other security, the Bank shall
be entitled to temporary or permanent injunction or injunctions to prevent breaches of such
performance and to specific enforcement of such covenants in addition to any other remedy to which
the Bank may be entitled, at law or in equity. In such a situation, the Bank may pursue any remedy
available, including declaratory relief, concurrently or consecutively in any order as to any
breach, violation, or threatened breach or violation of any of the provisions set forth in this
Agreement, and the pursuit of any particular remedy is not to be deemed an election of remedies or
waiver of the right to pursue any other remedy.

          20.     SURVIVABILITY: Sections 5. 6, 7, and 13 shall survive the termination of this
Agreement.

          21.     BINDING: This Agreement shall inure to the benefit of and be enforceable by and
binding upon the parties hereto and their representatives, executors, administrators,

10

 

successors, heirs, distributees, devisees and legatees. If the Executive should die while any
amounts would still be payable to him hereunder, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to his executor or, if there
is no such executor, to his estate.

          22.     HEADINGS: Descriptive headings contained in this Agreement are for convenience
only and shall not control or affect the meaning or construction of any provision in this
Agreement.

          23.     ARBITRATION: Except as otherwise set forth herein, any dispute, controversy or
claim arising under or in connection with this Agreement shall be settled exclusively by a sole
arbitrator in Fort Worth, Texas (or as close thereto as feasible) in accordance with the Commercial
Arbitration Rules of the American Arbitration Association then in effect. The arbitrator shall
apply the terms of this Agreement to the extent that such terms apply to the issue in arbitration
and are not found to be illegal. The Bank shall pay all administrative fees associated with such
arbitration. Judgment may be entered on the arbitrator’s award in any court having jurisdiction.
Unless otherwise provided in the rules of the American Arbitration Association, the arbitrator
shall, in his/her award, allocate between the parties the costs of arbitration, which shall include
reasonable attorneys’ fees and expenses of the parties, as well as the arbitrator’s fees and
expenses, in such proportions as the arbitrator deems just.

11

 

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

	 	 	 	 	 
	 	EXECUTIVE

 	 
	ATTEST: /s/ Lisanne Davidson 	/s/ Tim Carter
 	 
	 	Tim Carter 	 
	 	 	 
	 	OMNIAMERICAN BANK

 	 
	 
	ATTEST: /s/ Lisanne Davidson 	/s/ Clyde Johnson
 	 
	 	Clyde Johnson 	 
	 	Chairman of the Board 	 
	 

12

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