EX-10.4



 Exhibit 10.4 
 Parcel        Identification 
 Numbers:

 540-005-29-00-0001-00 

540-005-29-00-0002-00 
 540-005-29-00-0003-00 
 540-005-29-00-0004-00 

540-005-29-00-0005-00 
 540-005-29-00-0006-00 
 540-005-29-00-0033-00 

540-005-29-00-0034-00 
          540-005-00-00-0016-03 
 540-005-31-00-0001-00 
 540-005-31-00-0002-00 

540-005-31-00-0004-00 
 540-005-31-00-0005-00 
 540-005-31-00-0006-00 

540-005-31-00-0007-00 
 540-005-31-00-0009-00 
 540-005-31-00-0011-00 

540-005-31-00-0012-00 
 540-005-31-00-0013-00 
 540-005-31-00-0014-00 

540-005-31-00-0015-00 
 540-005-00-00-0016-00 

         540-005-29-00-0008-00 

         540-005-29-00-0010-00 

         540-005-29-00-0012-00 

         540-005-29-00-0015-00 

         540-005-29-00-0019-00 

         540-005-29-00-0022-00 

         540-005-29-00-0026-00 

         540-005-29-00-0027-00 

         540-005-29-00-0028-00 

         540-005-29-00-0029-00 

         540-005-29-00-0030-00 

         540-005-29-00-0031-00 

         540-005-29-00-0032-00 

         540-005-00-00-0023-02 

RECORDATION REQUESTED BY: 

Shepherd’s Finance, LLC 

3508 Washington Road 

McMurray, PA 15317 
 Attn:
Daniel M. Wallach 
 WHEN RECORDED MAIL TO: 
 Shepherd’s Finance, LLC 
 3508 Washington Road 

McMurray, PA 15317 
 Attn:
Daniel M. Wallach 
 SEND TAX NOTICES TO: 
 Shepherd’s Finance, LLC 
 3508 Washington Road 

McMurray, PA 15317 
 Attn:
Daniel M. Wallach 
 FOR RECORDER’S USE ONLY 







 OPEN-END MORTGAGE 
 THIS OPEN-END MORTGAGE dated December 30, 2011, is made and executed between BENJAMIN MARCUS HOMES, L.L.C., whose address is P.O. BOX 1287, MCMURRAY, PA 15317 (referred to below as
“Grantor”) and SHEPHERD’S FINANCE, LLC, whose address is 3508 WASHINGTON ROAD, MCMURRAY, PA 15317 (referred to below as “Lender”). 
 THIS MORTGAGE IS AN “OPEN-END” MORTGAGE, AS SET FORTH IN 42 PA. C.S.A. §8143, AND SECURES OBLIGATIONS UP TO A MAXIMUM AMOUNT OF INDEBTEDNESS EXISTING AT ANY TIME OF $8,075,776.76. THIS MORTGAGE,
INCLUDING THE ASSIGNMENT OF LEASES AND RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE IN THE ORIGINAL
PRINCIPAL AMOUNT OF $4,164,000.00, THE RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE TERMS CONTAINED IN THIS MORTGAGE. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS MORTGAGE, THIS
MORTGAGE SHALL BE SUBJECT TO THE TERMS AND CONDITIONS OF THE CREDIT AGREEMENT. 
 GRANT OF MORTGAGE. For valuable consideration,
Grantor grants, bargains, sells, conveys, assigns, transfers, releases, confirms and mortgages to Lender all of Grantor’s right, title, and interest in and to the following described real property, together with all existing or subsequently
erected or affixed buildings, improvements and fixtures; all streets, lanes, alleys, passages, and ways; all easements, rights of way, all liberties, privileges, tenements, hereditaments, and appurtenances thereunto belonging or anywise made
appurtenant hereafter, and the reversions and remainders with respect thereto; all water, water rights, watercourses and ditch rights (including stock in utilities with ditch or irrigation rights); and all other rights, royalties, and profits
relating to the real property, including without limitation all minerals, oil, gas, geothermal and similar matters, (the “Real Property”) located in WASHINGTON County, Commonwealth of Pennsylvania and more particularly described on
“EXHIBIT A”, which is attached to this Mortgage and made a part of this Mortgage as if fully set forth herein. The Real Property parcel identification numbers are 540-005-29-00-0001-00, 540-005-29-00-0002-00, 540-005-29-00-0003-00,
540-005-29-00-0004-00, 540-005-29-00-0005-00, 540-005-29-00-0006-00, 540-005-29-00-0033-00, 540-005-29-00-0034-00, 540-005-00-00-0016-03, 540-005-31-00-0001-00, 540-005-31-00-0002-00, 540-005-31-00-0004-00, 540-005-31-00-0005-00,
540-005-31-00-0006-00, 540-005-31-00-0007-00, 540-005-31-00-0009-00, 540-005-31-00-0011-00, 540-005-31-00-0012-00, 540-005-31-00-0013-00, 540-005-31-00-0014-00, 540-005-31-00-0015-00, 540-005-00-00-0016-00, 540-005-29-00-0008-00,
540-005-29-00-0010-00, 540-005-29-00-0012-00, 540-005-29-00-0015-00, 540-005-29-00-0019-00, 540-005-29-00-0022-00, 540-005-29-00-0026-00, 540-005-29-00-0027-00, 540-005-29-00-0028-00, 540-005-29-00-0029-00, 540-005-29-00-0030-00,
540-005-29-00-0031-00, 540-005-29-00-0032-00, and 540-005-00-00-0023-02. 
 CROSS-COLLATERALIZATION. In addition to the
Note, this Mortgage secures all obligations, debts and liabilities, plus interest thereon, of Grantor to Lender, or any one or more of them, as well as all claims by Lender against Grantor or any one or more of them, whether now existing or
hereafter arising, whether related or unrelated to the purpose of the Note, whether voluntary or otherwise, whether due or not due, direct or indirect, determined or undetermined, absolute or contingent, liquidated or unliquidated, whether Grantor
may be liable individually or jointly with others, whether obligated as guarantor, surety, accommodation party or otherwise, and whether recovery upon such amounts may be or hereafter may become barred by any statute of limitations, and whether the
obligation to repay such amounts may be or hereafter may become otherwise unenforceable. This Mortgage also secures all obligations, debts and liabilities, plus interest thereon, of Investor’s Mark and Mark L. Hoskins to Lender, or any one of
them, as well as all claims by Lender against Investor’s Mark and Mark L. Hoskins, or any one or more of them, whether now or existing or hereafter arising, whether related or unrelated to the purpose of the Related Documents, whether voluntary
or otherwise, whether due or not due, direct or indirect, determined or undetermined, absolute or contingent, liquidated or unliquidated, whether Investor’s Mark or Mark L. Hoskins may be liable individually or jointly with others, whether
obligated as guarantor, surety, accommodation party or otherwise, and whether recovery upon such amounts may be or hereafter may become barred by any statute of limitations, and whether the obligation to repay such amounts may be or hereafter may
become otherwise unenforceable. 
 ASSIGNMENT OF LEASES AND RENTS; GRANT OF SECURITY INTERESTS . Grantor presently assigns to Lender
all of Grantor’s right, title, and interest in and to all present and future Leases of the Property and all Rents from the Property. In addition, Grantor grants to Lender, a security interest in the Personal Property, Rents, Leases and fixtures
under the Uniform Commercial Code, as applicable, and as otherwise may be allowed under applicable law. 
 PAYMENT AND PERFORMANCE.
Except as otherwise provided in this Mortgage, Grantor shall pay to Lender all amounts secured by this Mortgage as they become due and shall strictly perform all of Grantor’s obligations under this Mortgage. 

POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor’s possession and use of the Property shall be governed by the
following provisions: 
 Possession and Use. Until the occurrence of an Event of Default, Grantor may
(1) remain in possession and control of the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property. 
 Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs, 







 
replacements, and maintenance necessary to preserve its value. 

Compliance With Environmental Laws. Grantor represents and warrants to Lender that: (1) During the period of
Grantor’s ownership of the Property, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from the Property; (2) Grantor
has no knowledge of, or reason to believe that there has been, except as previously disclosed to and acknowledged by Lender in writing, (a) any breach or violation of any Environmental Laws, (b) any use, generation, manufacture, storage,
treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Property by any prior owners or occupants of the Property, or (c) any actual or threatened litigation or claims of any kind by any person
relating to such matters; and (3) Except as previously disclosed to and acknowledged by Lender in writing, (a) neither Grantor nor any tenant, contractor, agent or other authorized user of the Property shall use, generate, manufacture,
store, treat, dispose of or release any Hazardous Substance on, under, about or from the Property; and (b) any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations and ordinances,
including without limitation all Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property to make such inspections and tests, at Grantor’s expense, as Lender may deem appropriate to determine compliance of the
Property with this section of the Mortgage. Any inspections or tests made by Lender shall be for Lender’s purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Grantor or to any other
person. The representations and warranties contained herein are based on Grantor’s due diligence in investigating the Property for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for indemnity
or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws; and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses
which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior to
Grantor’s ownership or interest in the Property, whether or not the same was or should have been known to Grantor. The provisions of this section of the Mortgage, including the obligation to indemnify and defend, shall survive the payment of
the Indebtedness and the satisfaction and reconveyance of the lien of this Mortgage and shall not be affected by Lender’s acquisition of any interest in the Property, whether by foreclosure or otherwise. 

Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or
waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other party the right to remove, any timber, minerals (including oil and gas), coal, clay, scoria,
soil, gravel or rock products without Lender’s prior written consent. 
 Removal of Improvements. Grantor shall
not demolish or remove any Improvements from the Real Property without Lender’s prior written consent. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace such
Improvements with Improvements of at least equal value. 
 Lender’s Right to Enter. Lender and Lender’s
agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender’s interests and to inspect the Real Property for purposes of Grantor’s compliance with the terms and conditions of this Mortgage.

 Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and
regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans With Disabilities Act and all Environmental Laws. Grantor shall also promptly
comply with any and all environmental permits or requirements applicable to the Property, including without limitation, any permits or requirements relating to wetlands mitigation or preservation. Grantor may contest in good faith any such law,
ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender’s sole opinion, Lender’s interests in the
Property are not jeopardized. Lender may require Grantor to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender’s interest. 

Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts, in
addition to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property. 
 CONSTRUCTION LOAN. If some or all of the proceeds of the loan creating the Indebtedness are to be used to construct or complete construction of any Improvements on the Property, the Improvements shall be
completed in accordance with construction documentation utilized to effect the development of the Property in accordance with the Credit Agreement, and Grantor shall pay in full all costs and expenses in connection with the work. Lender will
disburse loan proceeds under such terms and conditions as Lender may deem reasonably necessary to insure that the interest created by this Mortgage shall have priority over all possible liens, including those of material suppliers and workmen.
Lender may require, among other things, that disbursement requests be supported by receipted bills, expense affidavits, waivers of liens, construction progress reports, and such other documentation as Lender may reasonably request. 

DUE ON SALE - CONSENT BY LENDER. With the exception of those portions of the Property that are released by Lender in accordance with the
terms and provisions of the Credit Agreement, Lender may, at Lender’s option, declare immediately due and payable all sums secured by this Mortgage upon the sale or transfer, without Lender’s prior written consent, of all or any part of
the Real Property, or any interest in the Real Property. A “sale or transfer” means the conveyance of Real Property or any right, title or interest in the Real Property; whether legal, beneficial or equitable; whether voluntary or
involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest, lease-option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title
to the Real Property, or by any other method of conveyance of an interest in the Real Property. If any Grantor is a corporation, partnership or limited liability company, transfer also includes any change in ownership of more than twenty-five
percent (25%) of the voting stock, 







 
partnership interests or limited liability company interests, as the case may be, of such Grantor. However, this option shall not be exercised by Lender if such exercise is prohibited by federal
law or by Pennsylvania law. 
 TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of
this Mortgage: 
 Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes, payroll
taxes, special taxes, assessments, water charges and sewer service charges levied against or on account of the Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Property. Grantor shall
maintain the Property free of any liens having priority over or equal to the interest of Lender under this Mortgage, except for those liens specifically agreed to in writing by Lender, and except for the lien of taxes and assessments not due as
further specified in the Right to Contest paragraph. 
 Right to Contest. Grantor may withhold payment of any tax,
assessment, or claim in connection with a good faith dispute over the obligation to pay, so long as Lender’s interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within fifteen
(15) days after the lien arises or, if a lien is filed, within fifteen (15) days after Grantor has notice of the filing, secure the discharge of the lien, or if requested by Lender, deposit with Lender cash or a sufficient corporate surety
bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and reasonable attorneys’ fees, or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest,
Grantor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. 

Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments
and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. 

Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any
services are furnished, or any materials are supplied to the Property, if any mechanic’s lien, materialmen’s lien, or other lien could be asserted on account of the work, services, or materials. Grantor will upon request of Lender furnish
to Lender advance assurances satisfactory to Lender that Grantor can and will pay the cost of such improvements. 
 PROPERTY DAMAGE
INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage: 
 Maintenance of
Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to
avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender. Grantor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lender may request with Lender being
named as additional insureds in such liability insurance policies. Additionally, Grantor shall maintain such other insurance, including but not limited to hazard, business interruption and boiler insurance as Lender may require. Policies shall be
written by such insurance companies and in such form as may be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage from each insurer containing a stipulation that coverage will not be cancelled or diminished
without a minimum of ten (10) days’ prior written notice to Lender and not containing any disclaimer of the insurer’s liability for failure to give such notice. Each insurance policy also shall include an endorsement providing that
coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a
special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set
under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term of the loan. 
 Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty.
Whether or not Lender’s security is impaired, Lender may, at Lender’s election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or
the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory
proof of such expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt
and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Mortgage, then to pay accrued interest, and the remainder, if any, shall be applied to the principal
balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor’s interests may appear. 

Grantor’s Report on Insurance. Upon request of Lender, however not more than once a year, Grantor shall furnish to
Lender a report on each existing policy of insurance showing: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the property insured, the then current replacement value of such property, and
the manner of determining that value; and (5) the expiration date of the policy. Grantor shall, upon request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property. 

LENDER’S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender’s interest in the Property or
if Grantor fails to comply with any provision of this Mortgage or any Related Documents, including but not limited to Grantor’s failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Mortgage or any
Related Documents, Lender on Grantor’s behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other
claims, at any time levied or placed on the Property and paying all costs for insuring, maintaining and preserving the Property. 







 
All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by
Grantor. All such expenses will become a part of the Indebtedness and, at Lender’s option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to
become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note’s maturity. The Mortgage also will
secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. Grantor’s obligation to Lender for all such expenses shall survive the entry of any mortgage
foreclosure judgment. 
 WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of
this Mortgage: 
 Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the
Property in fee simple, free and clear of all liens and encumbrances other than those set forth in the Real Property description or in any title insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender in
connection with this Mortgage, and (b) Grantor has the full right, power, and authority to execute and deliver this Mortgage to Lender. 
 Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or
proceeding is commenced that questions Grantor’s title or the interest of Lender under this Mortgage, Grantor shall defend the action at Grantor’s expense. Grantor may be the nominal party in such proceeding, but Lender shall be entitled
to participate in the proceeding and to be represented in the proceeding by counsel of Lender’s own choice, and Grantor will deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such
participation. 
 Compliance With Laws. Grantor warrants that the Property and Grantor’s use of the Property
complies with all existing applicable laws, ordinances, and regulations of governmental authorities. 
 Survival of
Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Mortgage shall survive the execution and delivery of this Mortgage, shall be continuing in nature, and shall remain in full force and effect
until such time as Grantor’s Indebtedness shall be paid in full. 
 CONDEMNATION. The following provisions relating to
condemnation proceedings are a part of this Mortgage: 
 Proceedings. If any proceeding in condemnation is filed,
Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to
participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to
permit such participation. 
 Application of Net Proceeds. If all or any part of the Property is condemned by
eminent domain proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the
Property. The net proceeds of the award shall mean the award after payment of all actual costs, expenses, and attorneys’ fees incurred by Lender in connection with the condemnation. 

IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges
are a part of this Mortgage: 
 Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such
documents in addition to this Mortgage and take whatever other action is requested by Lender to perfect and continue Lender’s lien on the Real Property. Grantor shall reimburse Lender for all taxes, as described below, together with all
expenses incurred in recording, perfecting or continuing this Mortgage, including without limitation all taxes, fees, documentary stamps, and other charges for recording or registering this Mortgage. 

Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax upon this type of Mortgage
or upon all or any part of the Indebtedness secured by this Mortgage; (2) a specific tax on Grantor which Grantor is authorized or required to deduct from payments on the Indebtedness secured by this type of Mortgage; (3) a tax on this
type of Mortgage chargeable against the Lender or the holder of the Note; and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Grantor. 

Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Mortgage, this event
shall have the same effect as an Event of Default, and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Grantor either (1) pays the tax before it becomes delinquent, or (2) contests
the tax as provided above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. 
 SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a part of this Mortgage: 

Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes
fixtures, Rents or Personal Property, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time and other applicable law with respect to all such fixtures, as well as all Personal
Property, Rents and Leases. 
 Security Interest. Upon request by Lender, Grantor shall take whatever action is
requested by Lender to perfect and continue Lender’s security interest in the Rents and Personal Property. In addition to recording this Mortgage in the real property records, Lender may, at any time and without further authorization from
Grantor, file executed counterparts, copies or reproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default, Grantor shall not
remove, sever or detach the 







 
Personal Property from the Property. Upon default, Grantor shall assemble any Personal Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor and Lender
and make it available to Lender within three (3) days after receipt of written demand from Lender to the extent permitted by applicable law. 
 Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information concerning the security interest granted by this Mortgage may be obtained (each as required by the
Uniform Commercial Code) are as stated on the first page of this Mortgage. 
 FURTHER ASSURANCES; ADDITIONAL AUTHORIZATIONS. The
following provisions relating to further assurances and additional authorizations are a part of this Mortgage: 

Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and deliver, or
will cause to be made, executed or delivered, to Lender or to Lender’s designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may
deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of
Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Grantor’s obligations under the Note, this Mortgage, and the Related Documents, and (2) the liens and security interests created by
this Mortgage as first and prior liens on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurred in
connection with the matters referred to in this paragraph. 
 Additional Authorizations. If Grantor fails to do any
of the things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor and at Grantor’s expense. For such purposes, Grantor hereby irrevocably authorizes Lender to make, execute, deliver, file, record and do all
other things as may be necessary or desirable, in Lender’s sole opinion, to accomplish the matters referred to in the preceding paragraph. It is understood that nothing set forth herein shall require Lender to take any such actions. 

FULL PERFORMANCE. If Grantor pays all the Indebtedness when due, and otherwise performs all the obligations imposed upon Grantor under this
Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of termination of any financing statement on file evidencing Lender’s security interest in the Rents and the Personal
Property. Grantor will pay, if permitted by applicable law, any reasonable termination fee as determined by Lender from time to time. 

EVENTS OF DEFAULT. Each of the following, at Lender’s option, shall constitute an Event of Default under this Mortgage: 

Payment Default. Grantor fails to make any payment when due under the Indebtedness. 

Default on Other Payments. Failure of Grantor within the time required by this Mortgage to make any payment for taxes or
insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien. 
 Other
Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Mortgage or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition
contained in any other agreement between Lender and Grantor. 
 False Statements. Any warranty, representation or
statement made or furnished to Lender by Grantor or on Grantor’s behalf under this Mortgage or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at
any time thereafter. 
 Defective Collateralization. This Mortgage or any of the Related Documents ceases to be in
full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. 
 Death or Insolvency. The dissolution of Grantor or Investor’s Mark (regardless of whether election to continue is made), any member withdraws from the limited liability company, or any other termination
of Grantor’s or Investor’s Mark’s existence as a going business or the death of any member or Guarantor, the insolvency of Grantor or Investor’s Mark, the appointment of a receiver for any part of Grantor’s or
Investor’s Mark’s property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor or Investor’s Mark. 

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding,
self-help, repossession or any other method, by any creditor of Grantor or an Obligated Affiliate or by any governmental agency against any property securing the Indebtedness. This includes a garnishment of any of Grantor’s or an Obligated
Affiliate’s accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor or an Obligated Affiliate as to the validity or reasonableness of the claim which is the
basis of the creditor or forfeiture proceeding and if Grantor or an Obligated Affiliate gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding,
in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. 

Breach of Other Agreement. Any breach by Grantor under the terms of any other agreement between Grantor and Lender that is
not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Grantor to Lender, whether existing now or later. 

Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or
any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. 







 Adverse Change. A material adverse change occurs in Grantor’s financial
condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. 
 RIGHTS AND REMEDIES ON
DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter, Lender, at Lender’s option, may exercise any one or more of the following rights and remedies, in addition to any other rights or remedies provided by law:

 Accelerate Indebtedness. Lender shall have the right at its option, after giving such notices as required by
applicable law, to declare the entire Indebtedness immediately due and payable. 
 UCC Remedies. With respect to all
or any part of the Personal Property, Leases and fixtures now or hereafter located on the Property, or Rents, Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code. 

Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of the Property and collect the
Rents, including amounts past due and unpaid, and apply the net proceeds, over and above Lender’s costs, against the Indebtedness. In furtherance of this right, Lender may require any tenant or other user of the Property to make payments of
rent or use fees directly to Lender. If the Rents are collected by Lender, then Grantor irrevocably authorizes Lender to endorse instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds.
Payments by tenants or other users to Lender in response to Lender’s demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this
subparagraph either in person, by agent, or through a receiver. 
 Appoint Receiver. Lender shall have the right to
have a receiver appointed to take possession of all or any part of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the
proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law. Lender’s right to the appointment of a receiver shall exist whether or not the apparent value of the
Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. 
 Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor’s interest in all or any part of the Property. 

Nonjudicial Sale. If permitted by applicable law, Lender may foreclose Grantor’s interest in all or in any part of the
Personal Property or the Real Property by non-judicial sale. 
 Deficiency Judgment. Lender may obtain a judgment
for any deficiency remaining in the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this section. 

Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or
Lender otherwise becomes entitled to possession of the Property upon default of Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall, at Lender’s option, either (1) pay a reasonable
rental for the use of the Property, or (2) vacate the Property immediately upon the demand of Lender. 
 Other
Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity. 
 Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any and all right to have the Property marshalled. In exercising its rights and remedies, Lender shall be free to sell
all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. 

Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property
or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Unless otherwise required by applicable law, reasonable notice shall mean notice given at least ten (10) days before the time of
the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property. 

Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election
to make expenditures or to take action to perform an obligation of Grantor under this Mortgage, after Grantor’s failure to perform, shall not affect Lender’s right to declare a default and exercise its remedies. Nothing under this Mortgage
or otherwise shall be construed so as to limit or restrict the rights and remedies available to Lender following an Event of Default, or in any way to limit or restrict the rights and ability of Lender to proceed directly against Grantor and/or
against any other co-maker, guarantor, surety or endorser and/or to proceed against any other collateral directly or indirectly securing the Indebtedness. 
 Attorneys’ Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Mortgage, Lender shall be entitled to recover such sum as the court may adjudge reasonable as
attorneys’ fees at trial and upon any appeal. Whether or not any court action is involved, and to the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender’s opinion are necessary at any time for the protection
of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without
limitation, however subject to any limits under applicable law, Lender’s reasonable attorneys’ fees and Lender’s legal expenses, whether or not there is a lawsuit, including reasonable attorneys’ fees and expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports),
surveyors’ reports, and appraisal fees and title insurance, to the extent permitted by applicable law. Lender may also recover from Grantor all court, alternative dispute 







 
resolution or other collection costs (including, without limitation, fees and charges of collection agencies) actually incurred by Lender. 

NOTICES. Unless otherwise provided by applicable law, any notice required to be given under this Mortgage shall be given in writing, and
shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first
class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Mortgage. All copies of notices of foreclosure from the holder of any lien which has priority over this Mortgage shall be sent to
Lender’s address, as shown near the beginning of this Mortgage. Any party may change its address for notices under this Mortgage by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the
party’s address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor’s current address. Unless otherwise provided by applicable law, if there is more than one Grantor, any notice given by Lender to any
Grantor is deemed to be notice given to all Grantors. 
 MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part
of this Mortgage: 
 Amendments. This Mortgage, together with any Related Documents, constitutes the entire
understanding and agreement of the parties as to the matters set forth in this Mortgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by
the alteration or amendment. 
 Annual Reports. If the Property is used for purposes other than Grantor’s
residence, Grantor shall furnish to Lender, upon request, a certified statement of net operating income received from the Property during Grantor’s previous fiscal year in such form and detail as Lender shall require. “Net operating
income” shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. 
 Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define the provisions of this Mortgage. 

Governing Law. With respect to procedural matters related to the perfection and enforcement of Lender’s rights against the
Property, this Mortgage will be governed by federal law applicable to Lender and to the extent not preempted by federal law, the laws of the Commonwealth of Pennsylvania. In all other respects, this Mortgage will be governed by federal law
applicable to Lender and, to the extent not preempted by federal law, the laws of the State of Delaware without regard to its conflicts of law provisions. However, if there ever is a question about whether any provision of this Mortgage is valid or
enforceable, the provision that is questioned will be governed by whichever state or federal law would find the provision to be valid and enforceable. The loan transaction that is evidenced by the Note and this Mortgage has been applied for,
considered, approved and made, and all necessary loan documents have been accepted by Lender in the Commonwealth of Pennsylvania. 
 Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender’s request to submit to the jurisdiction of the courts of the Commonwealth of Pennsylvania, in the county in which Grantor’s
following address is located: P.O. Box 1287., MCMURRAY, PA 15317. 
 No Waiver by Lender. Lender shall not be deemed
to have waived any rights under this Mortgage unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by
Lender of a provision of this Mortgage shall not prejudice or constitute a waiver of Lender’s right otherwise to demand strict compliance with that provision or any other provision of this Mortgage. No prior waiver by Lender, nor any course of
dealing between Lender and Grantor, shall constitute a waiver of any of Lender’s rights or of any of Grantor’s obligations as to any future transactions. Whenever the consent of Lender is required under this Mortgage, the granting of such
consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. 

Severability. If a court of competent jurisdiction finds any provision of this Mortgage to be illegal, invalid, or
unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal,
valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Mortgage. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Mortgage shall not
affect the legality, validity or enforceability of any other provision of this Mortgage. 
 Merger. There shall be
no merger of the interest or estate created by this Mortgage with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. 

Successor Interests. The terms of this Mortgage shall be binding upon Grantor, and upon Grantor’s heirs, personal
representatives, successors, and assigns, and shall be enforceable by Lender and its successors and assigns. 
 Time is
of the Essence. Time is of the essence in the performance of this Mortgage. 
 DEFINITIONS. The following capitalized words and
terms shall have the following meanings when used in this Mortgage. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular
shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Mortgage shall have the meanings attributed to such terms in the Uniform Commercial Code: 

Borrower. The word “Borrower” means Benjamin Marcus Homes, L.L.C., and includes all co-signers and co-makers
signing the Note and all their successors and assigns. 
 Credit Agreement. The word “Credit Agreement”
means that certain Credit Agreement of even date herewith by and 







 
among Borrower, Lender, Investor’s Mark and Mark L. Hoskins. 

Default. The word “Default” means the Default set forth in this Mortgage in the section titled “Default”.

 Environmental Laws. The words “Environmental Laws” mean any and all state, federal and local statutes,
regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et
seq. (“CERCLA”), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 (“SARA”), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. 
 Event of Default. The words “Event of Default” mean any of the events of default set forth in this Mortgage in the events of default section of this Mortgage. 

Grantor. The word “Grantor” means Benjamin Marcus Homes, L.L.C. 

Guarantor. The word “Guarantor” means any guarantor, surety, or accommodation party of any or all of the
Indebtedness, including, without limitation, Investor’s Mark and Mark L. Hoskins. 
 Guaranty. The word
“Guaranty” means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. 
 Hazardous Substances. The words “Hazardous Substances” mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present
or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words “Hazardous Substances” are used in their very broadest sense
and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term “Hazardous Substances” also includes, without limitation, petroleum and petroleum
by-products or any fraction thereof and asbestos. 
 Improvements. The word “Improvements” means all
existing and future improvements, buildings, structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property. 

Indebtedness. The word “Indebtedness” means all principal, interest, and other amounts, costs and expenses payable
under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor’s
obligations or expenses incurred by Lender to enforce Grantor’s obligations under this Mortgage, together with interest on such amounts as provided in this Mortgage. Specifically, without limitation, Indebtedness includes all amounts that may
be indirectly secured by the Cross-Collateralization provision of this Mortgage. 
 Investor’s Mark. The words
“Investor’s Mark” mean Investor’s Mark Acquisitions, L.L.C. 
 Leases. The word
“Leases” means any and all leases now or hereafter affecting the Property, or any portion thereof. 

Lender. The word “Lender” means SHEPHERD’S FINANCE, INC., its successors and assigns. 

Mortgage. The word “Mortgage” means this Mortgage between Grantor and Lender. 

Note. The word “Note” means the promissory note of even date herewith, in the original principal amount of
$4,164,000.00 from Grantor to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. The Note is a revolving promissory note. 

Obligated Affiliate. The words “Obligated Affiliate” mean any affiliate of Grantor which is or which shall become
obligated to Lender in connection with the Indebtedness or otherwise. 
 Personal Property. The words “Personal
Property” mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all
replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. 

Property. The word “Property” means collectively the Real Property and the Personal Property. 

Real Property. The words “Real Property” mean the real property, interests and rights, as further described in this
Mortgage. 
 Related Documents. The words “Related Documents” mean all promissory notes, credit
agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed
in connection with the Indebtedness, including, without limitation, (i) all instruments, agreements and documents relating to that certain demand loan from Lender to Investor’s Mark in the amount of up to $2,225,000.00, including, without
limitation, the Mortgage related to such demand loan; (ii) all instruments, agreements and documents relating to that certain existing loan originally from 84 Financial, L.P. to Investor’s Mark in the amount of $1,686,766.76, as assigned
to Lender on or about the date hereof, including, without limitation, the Mortgage and guarantee related to such loan; (iii) that certain Amended and Restated Commercial Pledge Agreement of even date herewith, by and among Grantor,
Investor’s Mark and Lender; (iv) that certain Commercial Guarantee by Grantor, Investor’s Mark and Mark L. Hoskins in favor of Lender, of even date herewith; and (v) the Credit Agreement. 

Rents. The word “Rents” means all present and future rents, revenues, income, issues, royalties, profits, and other
benefits derived from the Property. 







 GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND GRANTOR AGREES TO ITS TERMS.

 THIS MORTGAGE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS MORTGAGE IS AND SHALL CONSTITUTE AND HAVE THE
EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. 
 GRANTOR: 
 BENJAMIN MARCUS HOMES, L.L.C. 
 By: /s/ Mark L.
Hoskins                 (Seal) 
 Name: Mark L. Hoskins

 Title: Manager 

{Notarized}