Document:

Exhibit 10.2

 

PROMISSORY NOTE SECURED BY DEED OF TRUST

 

	$800,000.00	Irvine, California	February 15, 2012

 

 

FOR VALUE RECEIVED, the
undersigned (the “Borrower”), promises to pay to the order of CARDINAL INVESTMENT PROPERTIES –
RAMSGATE, L.P., a California limited partnership (the “Lender”), or its assignee, at the address
set forth below for Lender or such other place as may be designated from time to time in writing by Lender, the principal sum of
Eight Hundred Thousand and No/100 Dollars ($800,000.00) (the “Loan Amount”), or so much as may be advanced
(including any additional advance of monies as may from time-to-time be made to Borrower by Lender) hereunder (the “Loan”),
in lawful money of the United States of America, plus interest and other charges as provided herein.

 

1.                  
Except as provided immediately below with regard to the “Default Rate” and the minimum interest payable in the
event this Note is prepaid as provided in Section 3 below, interest on this Note shall accrue at a rate equal to Twelve
Percent (12%) per annum, simple interest, commencing upon the date on which Lender disburses the Loan proceeds to Borrower (the
“Disbursement Date”). Interest shall be due and payable quarterly, commencing on the date that is one
(1) month after the Disbursement Date, and continuing thereafter until the entire principal balance under this Note has been paid.
A fee of Five Percent (5%) of the Loan Amount, or Forty Thousand and No/100 Dollars ($40,000.00) (“Service Fee”),
shall be deemed earned upon the funding of the Loan and shall be paid at the Disbursement Date. In the event Borrower exercises
its option to extend the Maturity Date (defined below) pursuant to Section 2 of this Note, interest shall be due and payable
monthly, commencing on the date that is one (1) month after the one (1) year anniversary of the Disbursement Date, and continuing
thereafter until the entire principal balance under this Note has been paid. During the pendency of any Event of Default (as hereinafter
defined), the default interest rate (the “Default Rate”) shall be equal to Seventeen Percent (17%) per
annum, simple interest.

 

2.                  
The entire Loan Amount, and all unpaid accrued interest under this Note, shall collectively be due and payable on the one
(1) year anniversary of the Disbursement Date (the “Maturity Date”); provided, however, that (a) Borrower
may, at Borrower’s option, provided that the Loan is not in default at that time, extend the Maturity Date for up to one
(1) additional period of six (6) months (the “Loan Extension Period”) by giving written notice to Lender
not less than ten (10) days prior to the then-current Maturity Date, which notice shall be accompanied by payment to Lender of:
(i) a non-refundable sum in good funds equal to Two Percent (2%) of the then existing loan balance as of the first day of the Loan
Extension Period (an “Extension Payment”), (ii) any unpaid interest accrued under the Loan from the Disbursement
Date through the date upon which the Loan Extension Period commences, and (b) interest accruing under this Note during any Loan
Extension Period shall be paid monthly in arrears on the first day of each month during the applicable Loan Extension Period.

 

3.                  
This Note may be prepaid in whole or in part without penalty before the Maturity Date. Any such prepayment under this Note
shall be applied (i) first to payment of the Extension Payment, if applicable, (ii) then to any unpaid third-party costs incurred
by Lender with respect to the Loan as provided in Section 5 of the Loan Agreement, (iii) then to any accrued but unpaid
interest under the Loan and (iv) last to the reduction of the outstanding principal balance hereunder. Notwithstanding the foregoing,
in no event shall the total cumulative interest payable with respect to the Loan be less than Seventy-Two Thousand and No/100 Dollars
($72,000.00) (the “Minimum Interest”), regardless of when the Loan is repaid. If the Loan is pre-paid,
any portion of the Pre-Paid Interest that is unearned, over the Minimum Interest, will be credited against the remaining principal
balance.

 

4.                  
Time is of the essence of the performance of Borrower’s obligations under this Note. An “Event of Default”
is defined as Borrower’s: (a) failure to pay the entire unpaid principal balance of (and all unpaid accrued interest on)
this Note on or before the Maturity Date; or (b) failure to pay any other payment required hereunder by the delinquency date defined
in Section 5, below; or (c) failure to comply with the “Due on Sale/Encumbrance” provision of
the Trust Deed as described in Section 8, below; or (e) failure to cure any non-monetary event of default under the Trust
Deed [other than as covered in (c) above] within the thirty (30) days next following written notice thereof from Lender to Borrower.
Upon the occurrence of an Event of Default, the entire unpaid principal balance of and all unpaid accrued interest on this Note
shall become immediately due and payable at Holder’s option and without further notice. Holder’s failure to exercise
such option, or any other remedy provided herein, shall not constitute a waiver of the right to do so upon the occurrence of any
subsequent Event of Default.

    	 

    	 	

    
 

 

5.                  
Any payment required under this Note which is not received by Holder within ten (10) days of its due date hereunder (other
than the full principal balance at maturity) shall be considered to be delinquent and Borrower shall pay to Holder on demand a
late charge in the amount equal to three percent (3%) of the late payment. Borrower and Holder agree that the late charge is intended
to be a reasonable approximation of the actual damages incurred by Lender as a result of such overdo payment, which damages the
parties acknowledge are difficult to estimate. The imposition or collection of a late charge is in addition to and not in lieu
of the increase of the rate of interest to the Default Rate or any other rights or remedies Holder may have as a result of the
late payment.

 

6.                  
If, upon the occurrence of an Event of Default, Holder consults with an attorney regarding the enforcement of any of its
rights under this Note or the Trust Deed, or if this Note is placed in the hands of an attorney for collection, or if a lawsuit,
litigation or other action is instituted to enforce this Note or Trust Deed, or if Borrower files for or is otherwise involved
in a Bankruptcy which in any way affects the rights of Lender to enforce its rights under this Note, then in any such event, Borrower
promises to pay all costs thereof, including reasonable attorneys’ fees or costs of litigation. Such costs and attorneys’
fees shall include, without limitation, those incurred on any appeal and in any proceeding under any present or future bankruptcy
or similar act or state receivership.

 

7.                  
Borrower acknowledges and agrees that the Loan has been arranged by R. Jeffrey Spindler, Park Place Partners Capital, Inc.,
a licensed California real estate broker (License No. 00775023) (the “Broker”). Broker has been retained
by Lender, and Borrower has no responsibility for any fee or commission payable to said broker. Notwithstanding anything to the
contrary set forth elsewhere herein, this Note is hereby expressly limited so that in no contingency or event whatsoever, whether
by acceleration of maturity of the debt evidenced hereby or otherwise, shall the amount paid or agreed to be paid to Lender for
the use, forbearance or detention of the money advanced or to be advanced under this Note exceed the highest lawful rate permissible
under the laws of the State of California as applicable to Borrower. If, from any circumstances whatsoever, fulfillment of any
provision hereof or of any other agreement, evidencing or securing the debt, at the time performance of such provisions shall be
due, shall involve the payment of interest in excess of that authorized by law, the obligation to be fulfilled shall be reduced
to the limit so authorized by law; and if from any circumstances, Lender shall ever receive as interest an amount which would exceed
the highest lawful rate applicable to the Borrower, such amount would be excessive interest shall be applied to the reduction of
the unpaid principal balance of the debt evidenced hereby and not to the payment of interest. In the event any such excess exceeds
the then unpaid principal balance hereunder, such interest as is so in excess of the then unpaid balance hereunder shall be refunded
to Borrower.

 

8.                  
This Note is secured by, among other things, that certain Deed of Trust with Assignment of Rents (Long Form) with Rider
attached of an even date herewith describing real property and other assets (the “Collateral”) owned
by Borrower and located in Riverside County, California (the “Trust Deed”). The Trust Deed provides in
part:

 

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 of 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.

 

9.                  
Borrower owns certain real property in addition to the Collateral, which real property is identified on Exhibit “A”
attached hereto (the “Borrower’s Other Real Property”). Notwithstanding anything to the contrary
herein, the Borrower’s Other Real Property shall not be deemed to be part of the Collateral. In the event that Borrower obtains
mortgage financing encumbering Borrower’s Other Real Property, or any portion thereof, without the prior written consent
of Lender, in Lender’s sole and absolute discretion, this Loan shall become immediately due and payable.

    	 

    	 	

    
 

 

10.               
Borrower hereby waives presentment, demand for payment, notice of dishonor, protest, and notice of protest. Any modification
to this Note must be set forth in writing which, to the extent enforcement thereof may be sought against Holder, must be executed
by Holder. This Note shall be governed by and construed and enforced in accordance with the laws of the state of California. The
liability of all persons and entities who are in any manner obligated hereunder shall be joint and several.

 

11.               
Limitations on Recourse. Notwithstanding anything in the Loan Documents to the contrary, but subject to the qualifications
and other provisions in clauses (a), (b) and (c) of this Section 11 below, Lender and Borrower agree that: (i) Borrower
shall be liable for the obligations arising under the Loan Documents to the full extent (but only to the extent) of the security
therefor, the same being all properties (whether real or personal), rights, estates and interests now or at any time hereafter
securing the payment of the Debt and/or the other obligations of Borrower under the Loan Documents; (ii) if a default occurs in
the timely and proper payment of all or any part of the Loan, any judicial proceedings brought by Lender against Borrower shall
be limited to the preservation, enforcement and foreclosure, or any thereof, of the liens, security titles, estates, assignments,
rights and security interests now or at any time hereafter securing the payment of the Loan and/or the other obligations of Borrower
under the Loan Documents, and no attachment, execution or other writ of process shall be sought, issued or levied upon Borrower’s
Other Real Property; and (iii) in the event of a foreclosure of such liens, security titles, estates, assignments, rights or security
interests securing the payment of the Loan, no judgment for any deficiency upon the Loan shall be sought or obtained by Lender
against Borrower.

 

a.                  
Nothing contained in this Section 11 shall (1) be deemed to be a release or impairment of the Loan or the lien of
the Loan Documents upon the Collateral, or (2) preclude Lender from foreclosing under the Loan Documents in case of any default
or from enforcing any of the other rights of Lender, including naming Borrower as a party defendant in any action or suit for foreclosure
and sale under the Trust Deed, or obtaining the appointment of a receiver or prohibit Lender from obtaining a personal judgment
against Borrower on the Loan to the extent (but only to the extent) such judgment may be required in order to enforce the liens,
security titles, estates, assignments, rights and security interests securing payment of the Loan, or (3) limit or impair in any
way whatsoever the Guaranty of Recourse Obligations of Borrower (the “Guaranty”) of even date executed
and delivered by William A. Shopoff (the “Guarantor”) in connection with the indebtedness evidenced by
this Note or release, relieve, reduce, waive or impair in any way whatsoever, any obligation of any party to the Guaranty or (4)
release, relieve, reduce, waive or impair in any way whatsoever any obligations of any person other than Borrower which is a party
to any of the other Loan Documents.

 

b.                  
In the event of fraud or material misrepresentation by Borrower or the Guarantor in connection with the Loan Documents or
the documents delivered by Borrower, or if any petition or proceeding for bankruptcy, reorganization or arrangement pursuant to
federal bankruptcy law, or any similar federal or state law, shall be filed by Borrower (or if any such petition or proceeding
was not so filed by Borrower, but Borrower or Guarantor or their respective agents, affiliates, officers or employees consented
to, acquiesced in, arranged or otherwise participated in bringing about the institution of such petition or proceeding), the limitations
on recourse set forth in this Section 11 will be null and void and completely inapplicable, and this Note shall be full-recourse
to Borrower.

 

c.                   
Nothing contained herein shall in any manner or way release, affect or impair the right of Lender to recover, and Borrower
shall be fully and personally liable and subject to legal action, for, any loss, cost, expense, damage, claim or other obligation
(including without limitation reasonable attorneys’ fees and court costs) incurred or suffered by Lender arising out of or
in connection with the following: (i) Borrower’s failure to obtain Lender’s prior written consent to any subordinate
financing or any other encumbrance on the Collateral or any other real property owned by Borrower, or any transfer of the Collateral;
(ii) the misapplication by Borrower, its agents, affiliates, officers or employees of any funds derived from the Collateral, including
security deposits, insurance proceeds and condemnation awards, in violation of the Loan Documents; (iii) after the occurrence of
an Event of Default or otherwise to the extent the Loan Documents require such application, Borrower’s failure to apply any
income from the Collateral or any other collateral when received to the costs of maintenance and operation of the Collateral and
to the payment of taxes, lien claims, insurance premiums, monthly payments of principal and interest or escrow payments or other
payments due under the Loan Documents; (iv) any litigation or other legal proceeding related to the Debt filed by Borrower or the
Guarantor that delays or impairs Lender’s ability to preserve, enforce or foreclose its lien on the Collateral, including,
but not limited to, the filing of a voluntary petition concerning Borrower under the U.S. Bankruptcy Code, in which action a claim,
counterclaim, or defense is asserted against Lender, other than any litigation or other legal proceeding in which a final, non-appealable
judgment for money damages or injunctive relief is entered against Lender; (v) the gross negligence or willful misconduct of Borrower,
its agents, affiliates, officers or employees which causes or results in a material diminution, or material loss of value, of the
Collateral that is not reimbursed by insurance or which gross negligence or willful misconduct exposes Lender to claims, liability
or costs of defense in any litigation or other legal proceeding; (vi) the seizure or forfeiture of the Collateral, or any portion
thereof, or Lender’s interest therein, resulting from criminal wrongdoing by Borrower, its agents, affiliates, officers or
employees; and (vii) waste to the Collateral caused by the acts or omissions of Borrower, its agents, affiliates, officers, employees
or contractors; or the removal or disposal of any portion of the Collateral by any of the foregoing after an Event of Default to
the extent such Collateral is not replaced by Borrower with like property of equivalent value, function and design.

    	 

    	 	

    
 

 

12.               
Any notice to Lender under this Note 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 Lender:
c/o Cardinal Development, 375 Bristol Street, Suite 50, Costa Mesa, California 92626, Attention: David J. Seidner, or such other
address as Lender may designate by written notice to Borrower. Any notice to Borrower 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, Suite 700, Irvine, California 92614, Attention William A. Shopoff,
or such other address as Borrower may designate by written notice to Lender.

 

13.               
This Note is the controlling document concerning the matters addressed herein. Therefore, in the event of a conflict between
the specific terms of this Note and those contained in other documents executed in connection herewith (collectively, with this
Note, the “Loan Documents”), such specific terms of this Note shall prevail.

 

14.               
As used herein, the word “days” shall mean and refer to calendar days; provided, however, in the event of 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.

 

[Signature Page Follows]

 

    	 

    	 	

    
 

 

This Promissory Note Secured by Deed of Trust is executed as of
the date first written above.

 

 

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 CEOExhibit 10.3

When recorded mail to:

Gromet & Associates

114 Pacifica, Suite 250

Irvine, CA 92618

Attention: Brian M. Davis, Esq.

 

Title No. OSA 3943026 (18)

Escrow No. 3943026

 

DEED OF TRUST
WITH ASSIGNMENT OF RENTS

 

This DEED OF TRUST WITH ASSIGNMENT OF RENTS,
is made this 15TH day of February, 2012 between

 

SPT-LAKE ELSINORE HOLDING CO., LLC,
a Delaware limited liability company, herein called TRUSTOR, whose address is 2 Park Plaza, Suite 700, Irvine, California 92614

 

FIRST AMERICAN TITLE INSURANCE COMPANY,
a California corporation, herein called TRUSTEE, and

 

CARDINAL INVESTMENT PROPERTIES - RAMSGATE,
L.P., a California limited partnership, herein called BENEFICIARY.

 

WITNESSETH: Trustor irrevocably grants, transfers
and assigns to Trustee in Trust, with Power of Sale that property in the County of Riverside, State of California, described as
follows:

 

FOR LEGAL DESCRIPTION SEE
EXHIBIT “A” ATTACHED HERETO AND BY THIS

REFERENCE INCORPORATED
HEREIN.

 

SEE RIDER ATTACHED HERETO
FOR ADDITIONAL TERMS AND CONDITIONS.

 

together with the rents, issues and profits
thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and
apply such rents, issues and profits,

 

FOR THE PURPOSE OF SECURING (1) payment of
the sum of Eight Hundred Thousand Dollars and No/100 Dollars ($800,000.00) with interest thereon according to the terms of a promissory
note or notes of even date herewith made by TRUSTOR, payable to order of BENEFICIARY, and extensions or renewals thereof; (2) the
performance of each agreement of TRUSTOR incorporated by reference or contained herein or reciting it is so secured; (3) payment
of additional sums and interest thereon which may hereafter be loaned to Trustor, or his or her successors or assigns, when evidenced
by a promissory note or notes reciting that they are secured by this Deed of Trust.

 

		A.	To protect the security of this Deed of Trust, and with
respect to the property above described, Trustor agrees:

 

(1)To
keep said property in good condition and repair; not to remove or demolish any building thereon; to complete or restore promptly
and in good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all
claims for labor performed and materials furnished therefor; to comply with all laws affecting said property or requiring any
alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act
upon said property in violation of the law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from
the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general.

 

(2)To
provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary (to the extent
insurable improvements are located on the property). The amount collected under any fire or other insurance policy may be applied
by Beneficiary upon any indebtedness secured hereby and in such order as beneficiary may determine, or at option of Beneficiary
the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive
any default or notice of default hereunder or invalidate any act done pursuant to such notice.

 

    	 

    	 	

    

 

(3)To
appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary
or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney’s fees in a reasonable sum,
in any action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this
Deed of Trust.

 

(4)To
pay: at least ten days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant
water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear
to be prior or superior hereto; all costs, fees and expenses of this Trust.

 

Should
Trustor fail to make any payment (beyond any applicable cure period without cure) or to do any other act as herein provided within
twenty (20) days after demand by Beneficiary, then Beneficiary or Trustee, but without obligation so to do and without notice
to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same in such manner and
to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon
said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the
rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge, or lien which in the
judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ
counsel and pay his or her reasonable fees.

 

(5)To
pay immediately upon demand all sums so expended by Beneficiary or Trustee, with interest from date of expenditure at the amount
allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding
the obligation secured hereby, any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when
said statement is demanded.

 

		B.	It is mutually agreed:

 

(1)That
any award of damages in connection with any condemnation for public use of or injury to said property or any part thereof is hereby
assigned and shall be paid to Beneficiary who may apply or release such moneys received by him or her in the same manner and with
the same effect as above provided for disposition or proceeds of fire or other insurance.

 

(2)That
by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his or her right either to require
prompt payment when due of all other sums so secured or to declare default for failure so to pay.

 

(3)That
at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation
of this Deed and said note for endorsement, and without affecting the personal liability or any person for payment of the indebtedness
secured hereby, Trustee may: reconvey any part of said property; consent to making of any map or plat thereof; join in granting
any easement thereon; or join in any extension agreement or any agreement subordinating the lien or charge hereof.

 

(4)That
upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed and said
note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment
of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of
any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described
as “the person or persons legally entitled thereto.”

 

(5)That
as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance
of these Trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default
by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, to collect and retain such
rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either
in person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness
hereby secured, enter upon and take possession of said property or any part thereof, in his or her own name sue for or otherwise
collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation
and collection, including reasonable attorney’s fees, upon any indebtedness secured hereby, and in such order as Beneficiary
may determine. The entering upon and taking possession of said property, the collection of such rents, issues and profits and
the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act
done pursuant to such notice.

    	 

    	 	

    
 

 

(6)That
upon default (beyond any applicable cure period without timely cure) by Trustor in payment of any indebtedness secured hereby
or in performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery
to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to
be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this
Deed, said note and all documents evidencing expenditures secured hereby.

 

After
the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale
having been given as then required by law, Trustee without demand on Trustor, shall sell said property at the time and place fixed
by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction
to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all
or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone
such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its
deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any
matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary
as hereinafter defined, may purchase at such sale.

 

After
deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale,
Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued
interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if
any, to the person or persons legally entitled thereto.

 

(7)Beneficiary,
or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute
a successor of successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly
acknowledged and recorded in the office of the recorder of the county or counties where said property is situated, shall be conclusive
proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor,
succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee
and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Trustee.

 

(8)That
this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators,
executors, successors, and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the note secured
hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender includes
the feminine and/or the neuter, and the singular number includes the plural.

 

(9)The
Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee
is not obliged to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which
Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee.

 

Beneficiary may charge for a statement regarding
the obligation secured hereby, provided the charge thereof does not exceed the maximum allowed by laws.

 

The undersigned Trustor, requests that a copy
of any notice of default and any notice of sale hereunder be mailed to him or her at his or her address hereinbefore set forth.

 

[Balance of this page intentionally left blank]

 

 

    	 

    	 	

    

 

 

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

 

 

State of California

 

 

County of Orange

 

 

On February ___, 2012 before me, _____________________________,
notary public, personally appeared WILLIAM A. SHOPOFF, who proved to me on the basis of satisfactory evidence to be the
person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity,
and that by his signature on the instrument, the entity upon behalf of which he 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)

 

 

    	 

    	 	

    
 

 

DO NOT RECORD

REQUEST FOR FULL RECONVEYANCE

 

To FIRST AMERICAN TITLE INSURANCE COMPANY

 

The undersigned is the
legal owner and holder of the note or notes, and of all other indebtedness secured by the foregoing Deed of Trust. Said note or
notes, together with all other indebtedness secured by said Deed of Trust have been fully paid and satisfied; and you are hereby
requested and directed, on payment to you of any sums owning to you under the terms of said Deed of Trust, to cancel said note
or notes above mentioned, and all other evidence of indebtedness secured by said Deed of Trust delivered to you herewith, together
with the said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terms of said Deed of Trust, all
the estate now held by you under the same.

 

Dated_________________________________

 

___________________________________________________

 

 

___________________________________________________

 

Please mail Deed of Trust, Note(s) and Reconveyance to:

 

_____________________________________________________________________

 

Do not lose or destroy this Deed of Trust OR THE NOTE which
it secures. Both must be delivered to the Trustee for cancellation before reconveyance will be made.

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