Document:

Exhibit 10.4

 

RIDER TO DEED OF TRUST WITH ASSIGNMENT OF
RENTS

 

This Rider to Deed of Trust with Assignment
of Rents is hereby attached to and made a part of that certain Deed of Trust with Assignment of Rents (Long Form) (the “Trust
Deed”) dated for reference purposes as of February 15, 2012, by and between SPT-LAKE ELSINORE HOLDING CO., LLC,
a Delaware limited liability company (“Trustor”), CARDINAL INVESTMENT PROPERTIES-RAMSGATE, L.P.,
a California limited partnership (“Beneficiary”), and FIRST AMERICAN TITLE INSURANCE COMPANY, a
California corporation (“Trustee”), with reference to the following matters:

 

RECITALS:

 

      A. Trustor has executed
that certain Promissory Note Secured by Deed of Trust dated concurrently with the Trust Deed (the “Note”),
and pursuant to which Trustor has borrowed from Beneficiary the principal sum of Eight Hundred Thousand and No/100 Dollars ($800,000.00)
(the “Loan”). The Note, the Trust Deed and such other agreements and/or instruments as may have been
entered into or made by Trustor for the benefit of Beneficiary in connection with the Loan shall sometimes hereinafter be referred
to as the “Loan Documents”.

 

      B. The lien of the
Trust Deed is a monetary encumbrance upon and against the property more particularly described on Exhibit “A”
to the Trust Deed and by this reference incorporated herein (the “Property”).

 

      C. Trustor intends
this Rider to supplement and supersede, where applicable, the terms and provisions of the Trust Deed.

      Now, therefore,
in consideration of the above Recitals, and other good and valuable consideration, receipt of which is hereby acknowledged, Trustor
hereby agrees to be bound by, and further supplement and modify the Trust Deed with the following provisions which shall supersede
any provision addressing (or silence concerning) the same issue in the Trust Deed:

 

1.                  Due on Sale/Encumbrance: Trustor shall not sell, transfer, assign, further encumber, hypothecate, or in any way dispose
of or use as collateral for another loan or obligation of Trustor, the Property or any interest therein without first obtaining
the prior written consent of Beneficiary, which consent may be granted, conditioned or withheld in the sole discretion of Beneficiary.
Any violation of the restrictions set forth herein, whether by act, omission or by virtue of law, shall be considered a default
in the performance of the obligations of Trustor under the Trust Deed and Beneficiary shall have the same rights with respect thereto
as are provided to Beneficiary under the Trust Deed with respect to any default by Trustor in the payment of any indebtedness secured
under the Trust Deed or in Trustor’s performance of any agreement thereunder.

2.                  Assignment
of Leases and Rents: The following provisions supersede the provisions of Paragraph B(5) of the Trust Deed:

 

a.Assignment. Trustor hereby
irrevocably assigns to Beneficiary all of Trustor’s right, title and interest in, to and under: (a) all leases and/or subleases
of the Property, all licenses and agreements relating to the management, leasing or operation of the Property and all other agreements
of any kind relating to the use or occupancy of the Property, whether now existing or entered into after the date hereof (collectively,
the “Leases”); and (b) the rents, issues and profits of the Property, including, without limitation,
all amounts payable and all rights and benefits accruing to Trustor under the Leases (collectively, the “Payments”).
The term “Leases” shall also include all guarantees of and security for the lessees’ performance thereunder,
and all amendments, extensions, renewals or modifications thereto which are permitted hereunder. This is a present and absolute
assignment, not an assignment for security purposes only, and Beneficiary’s right to the Leases and Payments is not contingent
upon, and may be exercised without possession of, the Property.

 

    	 

    	 	

    
 

 

b.Grant of License. By acceptance
of this Rider, Beneficiary shall be deemed to have conferred upon Trustor a license (the “License”) to
collect and retain the Payments as they become due and payable, until the occurrence of a default under any of the Loan Documents.
Upon a default and the passage of the applicable cure period without cure, the License shall be automatically revoked and Beneficiary
may collect and apply the Payments without notice and without taking possession of the Property. Trustor hereby irrevocably authorizes
and directs the lessees under the Leases to rely upon and comply with any notice or demand by Beneficiary for the payment to Beneficiary
of any rental or other sums which may at any time become due under the Leases, or for the performance of any of the lessees’
undertakings under the Leases, and the lessees shall have no right or duty to inquire as to whether any Default has actually occurred
or is then existing hereunder. Trustor hereby relieves the lessees from any liability to Trustor by reason of relying upon and
complying with any such notice or demand by Beneficiary.

 

 c.Effect of Assignment. The
foregoing irrevocable assignment shall not cause Beneficiary to be: (a) a mortgagee in possession; (b) responsible or liable for
the control, care, management or repair of the Property or for performing any of the terms, agreements, undertakings, obligations,
representations, warranties, covenants and conditions of the leases; or (c) responsible or liable for any waste committed on the
Property by the lessees or any other parties; for any dangerous or defective condition of the Property; or for any negligence in
the management, upkeep, repair or control of the Property resulting in loss or injury or death to any Lessee, licensee, employee,
invitee or other person. Beneficiary shall not directly or indirectly be liable to Trustor or any other person as a consequence
of: (i) the exercise or failure to exercise any of the rights, remedies or powers granted to Beneficiary hereunder; (ii) the failure
or refusal of Beneficiary to perform or discharge any obligation, duty or liability of Trustor arising under the Leases.

 

 d.Representations and Warranties.
Trustor represents and warrants that: (a) all existing Leases, if any, are in full force and effect and are enforceable
in accordance with their respective terms, and no breach or default, or event which would constitute a breach or default after
notice or the passage of time, or both, exists under any existing Leases; and (b) no rent or other payment under any existing Lease
has been paid by any lessee for more than one (1) month in advance; and (c) none of the lessor’s interests under any of the
Leases has been transferred or assigned.

 

 e.Covenants. Trustor covenants
and agrees at Trustor’s sole cost and expense to: (a) perform the obligations of lessor contained in any Lease and enforce
by all available remedies in a commercially reasonable manner performance by the lessees of the obligations of the lessees contained
in the Leases; (b) give Beneficiary prompt written notice of any default which occurs with respect to any of the Leases, whether
the default be that of the lessee or of the lessor; (c) exercise commercially reasonable efforts to keep all portions of the Property
leased at all times at rentals not less than the fair market rental value; (d) deliver to Beneficiary fully executed, counterpart
original(s) of each and every Lease if requested to do so; and (e) execute and record such additional assignments of any Lease
or specific subordinations of any Lease to the Trust Deed, in form and substance acceptable to Beneficiary, as Beneficiary may
reasonably request. Except with Beneficiary’s prior written consent, which consent shall not be unreasonably withheld or
delayed, Trustor shall not: (i) enter into any Leases after the date hereof (except for leases executed by Trustor in the ordinary
course of Trustor’s business); (ii) execute any other assignment relating to any of the Leases; (iii) discount any rent or
other sums due under the Leases or collect the same in advance, other than to collect rent one (1) month in advance of the time
when it becomes due; (iv) terminate, modify or amend any of the terms of the Leases or in any manner release or discharge the lessees
from any obligations thereunder; (v) consent to any assignment or subletting by any lessee; or (vi) subordinate or agree to subordinate
any of the Leases to any other deed of trust or encumbrance. Any such attempted action in violation of the provisions hereof shall
be null and void.

 

   f.Intentionally Deleted. [estoppel
certificates]

 

3.            Reinstatement of Lien. Beneficiary’s
rights hereunder shall be reinstated and revived, and the enforceability of this Trust Deed shall continue, with respect to any
amount at any time paid on account of any obligations secured hereby which Beneficiary is thereafter required to restore or return
in connection with a bankruptcy, insolvency, reorganization or similar proceeding with respect to any Borrower.

 

4.            Insurance. In addition to the
obligations of Trustor pursuant to Paragraph A(2) of the Trust Deed, Trustor shall maintain in effect at all times prior
to the full release and reconveyance of the Trust Deed, the following insurance naming Beneficiary as an additional insured and
containing a waiver of subrogation: (a) commercial general public liability insurance covering claims for bodily injury, personal
injury and property damage with single limit coverage of not less than One Million Two Hundred Thousand and No/100 Dollars ($1,200,000.00)
per occurrence and (b) if reasonably requested in writing by Beneficiary, all risk course of construction insurance in an amount
not less than the full replacement value of the improvements to the Property.

 

5.            No Amendment. Neither this Rider
nor the Trust Deed shall be amended without the written consent of Trustor and Beneficiary.

 

6.            Notices. Any notice to Trustee
shall be in writing and shall be considered given when delivered by personal service or three (3) business days after placement
in the U.S. mails, certified or registered mail, postage prepaid, addressed to Trustee: c/o Cardinal Development, 375 Bristol Street,
Suite 50, Costa Mesa, California 92626, Attention: David J. Seidner, or such other address as Trustee may designate by written
notice to Trustor. Any notice to Trustor under this Note shall be in writing and shall be considered given three (3) business days
after placement in the U.S. mails, certified or registered mail, postage prepaid, addressed to Borrower: c/o Shopoff Advisors,
L.P., 2 Park Plaza, Irvine, California 92614, Attention William A. Shopoff, or such other address as Trustor may designate by written
notice to Trustee.

 

7.            Attorneys Fees. In addition to
the obligations of Trustor pursuant to Paragraph A(3) of the Trust Deed, Trustor shall pay a reasonable sum as and for the
attorneys fees and legal costs incurred by Beneficiary in connection with any dispute arising between the parties hereto or their
legal representatives, successors and assigns, concerning any provision of this Rider or the Trust Deed, or the rights and duties
of any person in relation thereto, if Beneficiary is the prevailing party in such dispute.

 

8.           Governing Law. The validity,
interpretation and performance of this Rider or the Trust Deed shall be controlled by and construed under the laws of the State
of California. The parties hereto hereby consent to the jurisdiction of the California courts with venue in Orange County in the
event any dispute arises in conjunction herewith.

 

9.           Time of Essence. Time is of the
essence. As used herein, the word “days” shall mean and refer to calendar days; provided, however, in the event a payment
date or deadline falls on a Saturday, Sunday or federal holiday, such payment date or deadline shall be extended to the next following
calendar day that is not a Saturday, Sunday or federal holiday.

 

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END OF RIDER

Dated as of the date first
written above.

“Trustor”

 

SPT-LAKE ELSINORE HOLDING CO., 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 CEO

 

“Beneficiary”

 

CARDINAL INVESTMENT PROPERTIES – RAMSGATE, L.P.,
        

a California limited partnership 

 

	By:	Cardinal Investment Properties, LLC, a	 
	 	California limited liability company, 	 
	       	General Partner	 
	 	 	 	 
	     	 By: 	 /s/ David J. Seidner	 
	 	 	David J. Seidner, General ManagerExhibit 10.5

 SECURITY AGREEMENT

THIS SECURITY
AGREEMENT (this “Agreement”) is dated for reference purposes as of February 15, 2012, and is made
by and between SPT-LAKE ELSINORE HOLDING CO., LLC, a Delaware limited liability company (the “Debtor”),
and the CARDINAL INVESTMENT PROPERTIES-RAMSGATE, L.P., a California limited partnership (the “Secured Party”),
with reference to the following facts:

RECITALS:

 

A.Debtor
has entered into certain agreements as “Borrower” with Secured Party as “Lender”
including that certain Loan Agreement, Promissory Note Secured by Deed of Trust, Deed of Trust with Assignment of Rents, and such
other documents of an even date herewith (collectively, the “Loan Documents”) as may have been entered
into by and between Debtor and Secured Party in connection with that certain loan from Secured Party to Debtor in the amount Eight
Hundred Thousand and No/100 Dollars ($800,000.00) (the “Loan”), and pursuant to which Debtor has assumed
certain obligations as more particularly described therein.

 

B.Debtor
has agreed to provide for the benefit of Secured Party certain collateral security for the performance by Debtor of its obligations
thereunder in the form of a security interest in certain collateral as described herein.

 

C.The parties
now wish to enter into this Agreement to provide for such security interest and such matters as are set forth herein.

 

NOW, THEREFORE,
in consideration of the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

1. Debtor
hereby (i) grants Secured Party a security interest in all of Debtor’s right, title and interest in and to the property more
particularly described below and all products thereof (collectively, the “Collateral”), to be held and/or
disposed of in accordance with the terms of this Agreement:

A.
All fixtures and arising of property now or hereafter attached hereto, or used or adapted for use in the development, construction
and/or operation of, the real property and all improvements thereto located in the City of Lake Elsinore, County of Riverside,
State of California, and more particularly described in the attached Exhibit “A” (the “Real
Property”), or delivered to the Real Property for such attachment, use and/or adaptation for use (whether such items
are leased, owned absolutely or subject to any title retaining or security instrument, or otherwise used or possessed, but excluding
those items owned by tenants in accordance with their leases), including, without limitation, all building and construction materials,
heating, cooling, air-conditioning, ventilating, refrigerating, plumbing, generating, power, lighting, laundry, maintenance, incinerating,
lifting, cleaning, fire prevention and extinguishing, security and access control, cooking, gas, electric, and communication fixtures,
equipment, and apparatus, all engines, motors, conduits, pipes, pumps, tanks, ducts, compressors, boilers, water heaters, and furnaces,
all ranges, stoves, disposers, refrigerators, and other appliance, all escalators and elevators, all cabinets, partitions, mantels,
built-in mirrors, window shades, blinds, screens, awnings, storm doors, windows, and sash, all capering, under padding, and draperies,
all furnishings of public spaces, halls, and lobbies, and all shrubbery and plants.

B.All
proceeds and rights thereto which may be or become payable by virtue of any insurance contracts or policies which insure the Real
Property or any building, structures, or improvements thereon, or any such fixtures or personal property, against casualties and
theft (including all deposit accounts and/or investment property in which such proceeds are deposited or held).

    	 

    	 	

    

C.All
the rents, revenues, issues, profits and income of the Real Property, and all right, title and interest of Debtor in and to all
present and future leases and other agreements for the occupancy or use of all or any part of the Real Property, and all right,
title and interest of Debtor thereunder, including, without limitation, all cash or security deposits, advance rentals, and deposit
or payments of similar nature (including all deposit accounts and/or investment property in which the same are deposited or held
or are otherwise related thereto), together with all guarantees of tenants or occupants’ performance thereunder.

D.All
deposit accounts, investment property, tangible property and all general intangibles relating to the development of the Real Property
including, but not limited to, all plans and specifications, architectural plans and renderings, development rights, utility or
other deposits or prepaid fees, reports, studies, entitlements, permits, licenses, franchises, all names under or by which the
Real Property may at any time be operated or known and all rights to carry on business under any such names or any variant thereof.

E.
All products and proceeds of all of the foregoing and all deposit accounts and/or investment property in which the same are deposited
or held or are otherwise related thereto.

2.The granting of this security
interest is security for the performance by Debtor of its obligations to Secured Party, pursuant to the terms of the Loan Documents,
including, but not limited to, repayment of the Loan and any and all sums hereafter advanced and expenditures hereafter made by
Secured Party to or for the account or benefit of Debtor, and any and all indebtedness and obligations now or hereafter owing or
due or becoming owing or due from Debtor to Secured Party.

3.Debtor hereby represents
and warrants to Secured Party that (i) Debtor is the absolute owner of all of the Collateral, (ii) the Collateral is free and clear
of all security interests, liens and encumbrances and adverse claims except such claims in favor of Secured Party as are created
hereunder and (iii) Debtor has the right to grant to Secured Party the security interest in the Collateral created herein without
obtaining the consent of any person or, in the event the consent of any person is required, Debtor shall obtain such consent in
form and content reasonably satisfactory to Lender and deliver the same to Lender prior to the funding of the Loan.

4.Debtor covenants and agrees
that Debtor will, upon demand at any time, execute and deliver all such further instruments, documents and/or agreement, and undertake
such acts, as shall be reasonably required to effectuate the security interest described herein and so as to render all of the
Collateral available for the security and satisfaction of said indebtedness, according to the intent and purpose herein expressed
and so as to enable the Secured Party to sell and/or convey or otherwise to subject the same to the lien hereof. Debtor further
agrees to appear in and defend any and all actions and proceedings affecting the title to the Collateral or any part thereof or
affecting the security interest of Secured Party therein.

5.If Debtor shall default
in the payment of any of the indebtedness, obligations or liabilities secured hereby or shall default in the performance of any
agreement herein contained, or if any breach be made in any obligation, promise, declaration or warranty of Debtor herein contained
or secured hereby, then, subject to Debtor’s cure rights under the Loan Documents, Secured Party at Secured Party’s
option, shall have the remedies of a Secured Party under the laws of the State of California, including (to the extent not otherwise
prohibited thereby) the right to require Debtor to assemble the Collateral and make it available to Secured Party where the Collateral
may be and for taking possession thereof by Secured Party, and the removal, sale or other disposition of the Collateral, or any
part thereof, by Secured Party at public or private sale, upon legal notice to Debtor. Secured Party shall deduct and retain from
the proceeds of such sale or sales all costs, expenses and charges paid or incurred in the taking, removal, handling and sale of
the Collateral, or otherwise incurred in connection therewith, including any reasonable attorneys’ fees incurred or paid
by Secured Party; the balance of the proceeds shall be applied by Secured Party upon the indebtedness, obligations and liabilities
secured hereby and the surplus, if any, shall be paid to Debtor or to the person or persons lawfully entitled to receive the same.
If suit be brought, or any proceedings instituted by Secured Party against Debtor to enforce the provisions of this Agreement,
there shall be due from Debtor to Secured Party, such sum for reasonable attorneys’ fees and expenses as may be awarded to
Secured Party in said action or proceeding, which sum is hereby secured. In any such action, the plaintiff shall be entitled
to the appointment of a receiver, without notice, to take possession of all or any part of the Collateral and to exercise such
powers as the Court shall confer upon him. At any sale or sales made under this Agreement, or authorized herein, Secured Party
or any person on behalf of Secured Party, or any other person may bid for and purchase any of the Collateral being sold.

    	 

    	 	

    
 

6.Unless otherwise directed
by Debtor in writing, any notices required to be delivered to Debtor hereunder shall be delivered: c/o Shopoff Advisors, L.P.,
2 Park Plaza, Suite 700, Irvine, California 92614, Attention William A. Shopoff. Unless otherwise directed by Secured Party in
writing, any notices required to be delivered to Secured Party hereunder shall be delivered to: c/o Cardinal Development, 375 Bristol
Street, Suite 50, Costa Mesa, California 92626, Attention: David J. Seidner.

7.This Agreement has been
entered into by and between Debtor and Secured Party in addition to, and for the purpose of complimenting, the rights of Secured
Party under the Loan Documents. Debtor hereby acknowledges and agrees that, to the maximum extent permitted by applicable law,
(i) the rights of, and the remedies available to, Secured Party under this Agreement or any of the other Loan Documents, shall
at all times be available to and enforceable by Secured Party on a nonexclusive basis and (ii) the election by Secured Party to
pursue anyone course of action thereunder shall not constitute a waiver or prohibition against the pursuit by Secured Party of
any other right or remedy under any of the Loan Documents.

8.The words “Debtor”
and “Secured Party”, as used herein, shall be construed to include the heirs, legatees, devisees, administrators, executors,
successors and assigns of Debtor and Secured Party, respectively, and this Agreement shall bind and inure to the benefit of said
third persons. Whenever the context so requires, the masculine gender includes the feminine and/or neuter, the singular number
includes the plural and vice versa. If there be more than one Debtor, it is agreed that the provisions of this Agreement in reference
to Debtor shall be construed to apply jointly and severally to each of the Debtors. The term “and/or” as used herein
means one or the other or both, or anyone or all, of the things or persons in connection with which the words are used. This Agreement
shall be governed by the laws of the State of California. This Agreement may be executed in counterparts, each of which shall be
deemed to be an original of this Agreement, but such counterparts, when taken together, shall constitute but one agreement.

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IN WITNESS WHEREOF, Secured Party and Debtor have executed this
Agreement as of the date first above written.

 

SECURED PARTY: 

CARDINAL INVESTMENT PROPERTIES – RAMSGATE, L.P.,
        

a California limited partnership

 

	By:	Cardinal Investment Properties, LLC, a	 
	 	California limited liability company, 	 
	       	General Partner	 
	 	 	 	 
	     	 By: 	 /s/ David J. Seidner	 
	 	 	David J. Seidner, General Manager	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

BORROWER:

 

DEBTOR:

 

SPT-LAKE ELSINORE HOLDING CO., 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 CEO

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