DEED
IN LIEU OF FORECLOSURE AGREEMENT


 


THIS
DEED IN LIEU OF FORECLOSURE AGREEMENT is made as of the 27th day of April, 2018 (this “Agreement”) by and
between 1333 Vista Drive, LLC, a Florida limited liability company, with a mailing address of 13000 SW 61st Avenue, Miami FL 33156
(“Company”) and Shepherd’s Finance, LLC, a Delaware limited liability company registered to do business in the
state of Florida, with a mailing address of 12627 San Jose Blvd., Suite 201, Jacksonville FL 32223 (“Lender”).


 


WITNESSETH:


 


	A.	Company
    owns fee simple title to the real estate and the improvements described as: 1333 Vista Drive, Sarasota FL 34239, and legally
    described on Exhibit “A” attached hereto.
	 	 
	B.	Lender
    made a loan (the “Loan”) evidenced by a certain Promissory Note dated February 19, 2016 made by Company’s
    predecessor in interest Lex Partners II, LLC (“Lex”), as maker, in favor of Lender, as payee in the face amount
    of $3,600,000.00 (“Note”). The Loan is secured by, among other things, a certain Mortgage dated February 19, 2016
    made by Lex, as mortgagor, in favor of Lender, as mortgagee, recorded in the Public Records of Sarasota County, Florida as
    Instrument 2016022157 (the “Mortgage”). The Note and the Mortgage are sometimes herein collectively referred to
    as the “Loan Documents”).
	 	 
	C.	As
    of this date, the total outstanding principal balance of the Loan is $3,775,698.45, plus accrued and unpaid interest thereon
    in the amount of $243,124.79.
	 	 
	D.	Company
    is in default under the Loan Documents (“Company’s Default”). The Loan has been accelerated and the entire
    principal amount of Loan together with all accrued interest thereon is now due and owing.
	 	 
	E.	In
    order to avoid the financial hardship and damage to reputation that would result from the Company’s Default, Company
    has requested that the parties resolve Company’s Default by Company’s conveyance of the real estate legally described
    on Exhibit “A” and other property to Lender, or to a person or other entity designated by Lender (“Designee”),
    in lieu of foreclosure in consideration of the premises and other consideration.
	 	 
	F.	The
    fair market value of the “Property” (as hereinafter defined) does not exceed the total outstanding unpaid principal,
    interest, accrued and unpaid and other outstanding indebtedness due and owing under the Loan Documents.
	 	 
	G.	Lender
    wishes to accept the conveyance of the Property pursuant to this Agreement to avoid the necessity of litigation, foreclosure,
    and the delays associated therewith.


 


NOW
THEREFORE, for and in consideration of the foregoing premises and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Company and Lender do hereby agree as follows:


 




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ARTICLE
I


Incorporation
and Transfer


 


1.01
Incorporation. The recitals to this Agreement are fully incorporated herein by this reference thereto with the same force and
effect as though restated herein.


 


1.02
Transfer of Property. Subject to the terms, provisions, conditions, covenants, and agreements herein contained and subject to
the matters set forth on Exhibit “B” hereto (“Permitted Exceptions”) Company agrees to sell, grant,
transfer, assign, and convey to Lender (or Designee) and Lender agrees to acquire, or cause Designee to acquire, from Company
absolutely and free of any right of redemption or other right or interest of Company or anyone claiming by, through, or under
Company, the following real and personal property (collectively, the: (a) good, valid, indefeasible, and marketable fee simple
title to the property described on Exhibit A attached hereto (“Real Estate”); (b) all of Company’s right, title,
and interest as lessor or lessee in all leases, licenses, and other agreements to occupy all or any part of the Real Estate (together
“Leases”) together with all rents and other sums due, accrued or to become due under each such lease, license, and
agreement, all rents that are received and allocable to periods following the “Closing Date” (as hereinafter defined)
and (c) all other tangible and intangible personal property, equipment, and supplies located at or used in connection with the
Real Estate ( the “Personal Property”). The Real Estate and Leases are sometimes referred to hereinafter as the “Property”.


 


ARTICLE
II


Consideration


 


2.01
Release of Personal Liability. In consideration for the transfer by Company of the Property to Lender (or, at Lender’s option,
Designee), and subject to the terms, provisions, and conditions herein contained, at the “Closing” (as hereinafter
defined), Lender shall in the deed in lieu agree to release Company from any personal liability for payment of the Loan.


 


ARTICLE
III


Title


 


3.01
Owners Title Policy. As a condition to Lender’s obligation to close, Lender must, at Closing, receive from Chicago Title
Insurance Company (“Title Company”) an ALTA Form Owner’s Title Insurance Policy acceptable to Lender (“Title
Policy”), dated as of the Closing Date naming Lender as the insured, which Title Policy shall show fee simple title to the
Real Estate vested in Buyer subject only to the Permitted Exceptions. The Title Policy must (a) insure as separate parcels any
easements appurtenant to the Real Property, (b) be in the amount of the indebtedness evidenced by the Note which is outstanding
on the Closing Date (or such lesser amount as Lender shall accept), (c) delete the standard ALTA exceptions, (d) delete any so-called
“creditors” rights exclusion or exceptions.


 


ARTICLE
IV


Closing


 




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4.01
Closing. Provided all terms, provisions, and conditions contained in this Agreement to be satisfied on or before Closing have
been timely satisfied, Company’s warranties and representations are true and correct, so as to provide for the closing of
the transaction contemplated hereby, including without limitation, the vesting in Lender of good, valid, indefeasible, and marketable
fee simple title to the Real Property, subject only to the Permitted Exceptions, closing of the transaction contemplated hereby
(“Closing”), shall take place at the office of Gibson, Kohl, Wolff & Hric, PL, 1800 Second Street, Suite 717,
Sarasota FL 34236 at 3:00 P.M on April 29, 2018 or such other date or such other place as may be mutually agreed upon in writing
by Company and Lender.


 


4.02
Closing Deliveries, etc. The following deliveries and/or actions shall constitute the Closing. Such deliveries, showings, and
actions shall be deemed to be taken simultaneously and no one of which shall be deemed completed until all of such deliveries,
showings, and actions have been completed.


 


A.
Title Documents. The following title, transfer, and original documentation and other matters shall be duly authorized, properly
executed, acknowledged (if applicable) and/or delivered:


 


(a)
The Title Policy. The Title Policy (or a “marked-up” title commitment to issue the Title Policy).


 


(b)
Lien and Possession Affidavit. Company shall deliver to Lender a Lien and Possession Affidavit for the Real Property executed
and sworn to by him/her in a form attached hereto and made a part hereof as Exhibit C in order for the elimination of the
issuance of a title policy as to (a) the rights of parties in possessions, and (b) mechanics’ liens.


 


(c)
Estoppel Affidavit. Company shall deliver an Estoppel Affidavit regarding the Deed in Lieu of Foreclosure in a form which is attached
hereto and made a part hereof as Exhibit D.


 


B.
Transfer Documents. The following Property transfer documentation shall be duly authorized, properly executed, acknowledged (if
applicable), and delivered to Lender:


 


(a)
Deed. Company’s duly executed, acknowledged, and stamped recordable deed in form and substance as set forth on Exhibit
E attached hereto.


 


(b)
Bill of Sale. Company’s duly executed bill of sale in form and substance as set forth on Exhibit F attached hereto.


 


(c)
Possession. Company shall deliver possession of the Real Property and the other Personal Property to Lender.


 


(d)
Keys to Premises. Company shall deliver to Lender or Lender’s designee, a key code inventory and all keys to the Real Estate
or, with Lender’s permission, a letter executed by Company and the Company’s managing agents addressed to the person(s)
or entities possessing the keys directing such persons or entities to deliver the keys to Lender or Lender’s designated
representative.


 




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(e)
Payments to Lender. Company shall pay to Lender an amount equal to $0.00, representing documentary stamps on the deed and one
month’s rent.


 


(f)
Release of Lender by Company, et al. Company shall deliver to Lender, a release of Lender and its respective affiliates, successors
and assigns and other parties reasonably designated by Lender, in the form of Exhibit G attached hereto.


 


(g)
Settlement Statement. Company, Lender and Designee shall jointly execute and deliver a settlement statement to each other.


 


4.04
Expenses of Closing. At Closing, Company shall pay for the Title Policy and for any and all documentary stamps required on the
deed to Lender, and for recording fees of all recorded transactional documents.


 


ARTICLE
V


Representations,
Warranties and Indemnity


 


5.01
Representations and Warranties of Company. Company represents and warrants to Lender as follows:


 


(a)
Bankruptcy. Company has not filed a petition in any case, action, or proceeding under the Bankruptcy Code or any similar state
law; no petition in any case, action, or proceeding under the Bankruptcy Code or any similar state law has been filed against
Company that has not been dismissed or vacated; and Company has not filed an answer or otherwise admitted in writing insolvency
or inability to pay their debts or made an assignment for the benefit of creditors or consented to an appointment of a receiver
or trustee of all or a material part of their property. The transaction contemplated herein is not a preference, voidable transfer,
fraudulent conveyance, or otherwise in violation of the Bankruptcy Code or any other similar state or federal law.


 


(b)
Absence of Litigation. Company has not received any written notice of any, nor is there any, pending or, to the best of Company’s
knowledge any threatened, litigation or administrative proceeding involving in any manner the Real Property or the ownership thereof.


 


(c)
Arm’s-Length Transaction. Company has requested conveyance of title to the Property in lieu of the exercise of Lender’s
remedies pursuant to the Loan Documents and throughout the negotiation, preparation, and execution of this Agreement has been,
and will through the Closing be represented by competent legal counsel of their own choosing. This Agreement was entered into
out of the free will of Company and pursuant to arm’s-length negotiations and Company believes this Agreement is fair. Lender
has not taken advantage of Company by threats, intimidation, overreaching, unconscionable conduct, or otherwise and Company is
proceeding in this transaction as a volunteer in what they perceive to be their own best interest.





 




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5.03
Indemnity. Company agrees to defend, indemnify, and hold Lender, and it’s designees and their respective partners,
successors, assigns, members, officers, participants, shareholders, directors, and personal representatives (collectively,
the “Lender-Connected Parties”) harmless from and against any losses, damages, costs (including, without
limitation, attorneys’ fees, court costs, and costs of appeal), expenses, judgments, liens, decrees, fines, penalties,
liabilities, claims, actions, suits, and causes of action arising, directly or indirectly, from (a) any breach by Company of
warranty or representation contained in this Agreement or in the documents executed and delivered by Company pursuant to this
Agreement (with this Agreement, sometimes collectively referred to as the “Company Documents”); (b) any breach,
default, or violation by Company of any covenant, agreement, or provision of the Company Documents; and (c) any claims or
liabilities pertaining to the Property arising prior to the Closing (d) any federal or state income or other tax liability of
Company regarding the transactions contemplated by this Agreement, including but not limited to tax liabilities arising out
of or in any manner related to withholding requirements under Section 1445 of the Internal Revenue Code of 1986, and any and
all obligations of Company for discharge of indebtedness income. The indemnifications set forth in this section 5.03 survive
the closing of this transaction and do not merge in the deed or any other document executed in connection
herewith.


 


5.04
Property Condition. Seller warrants that all major appliances and heating, cooling, mechanical, electrical, security, and plumbing
systems are and will be maintained in working condition until closing and the structure does not leak.


 


ARTICLE
VI


No
Obligation of Lender to Third Parties


 


6.01
No Third-Party Beneficiary. Company acknowledges and agrees that the transfer to Lender of title to the Real Property pursuant
to the terms of this Agreement shall not create any obligations on the part of Lender to third parties that have claims of any
kind whatsoever against Company with respect to the Property, and Lender does not assume or agree to discharge any liabilities
pertaining to the Property except as otherwise expressly provided in this Agreement.


 


ARTICLE
VII


Absolute
Conveyance/No Merger


 


7.01
Conveyance/No merger. The conveyance of the Property to Lender according to the terms of this Agreement is an absolute conveyance
of all of its right, title, and interest in and to the Property in fact as well as form and was not and is not now intended as
a mortgage, trust conveyance, deed of trust, or security instrument of any kind, and that the consideration for such conveyance
is exactly as recited herein and Company has no further interest (including rights of redemption) or claims in and to the Property
or to the rents, proceeds, and profits that may be derived thereof, of any kind whatsoever. Notwithstanding Lender’s acquisition
of the Property, the indebtedness evidenced by the Note shall not be cancelled, shall survive the Closing and delivery of any
deeds and/or releases and all of the Loan Documents shall remain in full force and effect after the transaction contemplated by
this Agreement has been consummated. The parties further agree that the interest of Lender in the Property after Buyer’s
acquisition of the Property shall not merge with the interest of Lender in the Property under the Loan Documents. It is the express
intention of each of the parties hereto (and all of the conveyances provided for in this Agreement shall so recite) that such
interests of Lender and Buyer in the Property shall not merge, but be and remain at all times separate and distinct, notwithstanding
any union of said interest in Lender at any time by purchase, termination, or otherwise and that the lien of the Mortgage in the
Property shall be and remains at all times a valid and continuous lien on the Property until and unless released of record by
Lender or its successors and assigns.


 




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ARTICLE
IX


Notices


 


9.01
Notice. Any notice pursuant to this Agreement shall be given in writing by (a) personal delivery, or (b) reputable overnight delivery
service with proof of delivery, or (c) United States Mail, postage prepaid, registered or certified mail, return receipt requested,
or (d) legible facsimile transmission sent to the intended addressee at the address set forth below, or to such other address
or to the attention of such other person as the addressee shall have designated by written notice sent in accordance herewith,
and shall be deemed to have been given either at the time of personal delivery, or, in the case of expedited delivery service
or mail, as of the date of first attempted delivery at the address and in the manner provided herein, or, in the case of facsimile
transmission, as of the date of the facsimile transmission provided that an original of such facsimile is also sent to the intended
addressee by means described in clauses (a), (b), or (c) above. Unless changed in accordance with the preceding sentence, the
addresses for notices given pursuant to this Agreement shall be as follows:


 


To
Company: 13000 SW 61st Avenue, Miami FL 33156


 


To
Lender: Shepherds Finance, LLC. with a mailing address of 13241 Bartram Park Blvd., Suite 2401, Jacksonville FL 32258 (“Lender”).


 


All
notices shall be deemed effectively given on the date that such notice is received or refused.


 


ARTICLE
X


Miscellaneous


 


10.01
Miscellaneous. This Agreement, and the exhibits attached hereto, and all other instruments and documents executed and delivered
at Closing by either party hereto, embody the entire agreement between the parties in connection with the transaction contemplated
hereby and there are no oral or parole agreements, representations, or inducements existing between the parties relating to the
transaction contemplated hereby that are not expressly set forth herein and covered hereby. This Agreement may not be modified
except in writing signed by all of the parties hereto. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto, Buyer and the respective heirs, administrators, executors, personal representatives, successors, and assigns
of the parties hereto. No written waiver by any party at any time of any breach of any provision of this Agreement shall be deemed
a waiver of a breach of any other provision herein or consent to any subsequent breach of the same or any other provision. If
any action by any party shall require the consent or approval of another party, such consent or approval of such action on any
one occasion shall not be deemed a consent to or approval of such action on any subsequent occasion or a consent to or approval
of any other action on the same or any subsequent occasion. The captions, section numbers, and article numbers appearing in this
Agreement are inserted only as a matter of convenience and do not define, limit, construe, or describe the scope or intent of
such paragraphs or articles of this Agreement nor in any way affect this Agreement.


 




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10.02
Time is of Essence; Counterparts; Governing Law. All parties hereto agree that time is of the essence in this transaction and
that this Agreement may be executed in counterparts and shall be governed by and interpreted in accordance with the laws of the
State of Florida.


 


10.03
Brokers. Lender and Company represent and warrant to the other that it has had no direct dealings with any real estate brokers,
salesmen, agents, finders, or consultants in connection with the conveyance of the Property to Lender.


 


10.04
Lender’s Liability. In no event shall Lender be personally or individually liable for any obligations set forth in this
Agreement. Except to the extent expressly provided in the Company Documents, Lender is not assuming any obligations or liabilities
of Company.


 


10.05
Value. Company hereby confirms to Lender that this value of the Property does not exceed the indebtedness owing to Lender pursuant
to the Loan Documents.


 


10.06
Survival. The terms and provisions of this Agreement shall survive the Closing and delivery of the deed and other documents to
be delivered to Lender pursuant to this Agreement.


 


IN
WITNESS WHEREOF, and intending to be legally bound hereby, the parties hereto have executed this Agreement as of the day and
year first above written.


 


COMPANY:


 


1333
Vista Drive, LLC, a Florida limited liability Company


 


	By:	/s/
    Dennis J. Nickerson	 
	Print
    Name	Dennis
    J. Nickerson	 
	Title	Manager	 
	 	 	 
	LENDER:	 	 
	 		
	Shepherd’s Finance, LLC	 
	By:	/s/
    Daniel M. Wallach	 
	Print
    Name	Daniel
    M. Wallach	 
	Title
    	Manager	 


 






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EXHIBIT
A


LEGAL
DESCRIPTION


 


EXHIBIT
B


PERMITTED
EXCEPTIONS


 


EXHIBIT
C


LIEN
AND POSSESSION AFFIDAVIT


 


EXHIBIT
D


ESTOPPEL
AFFIDAVIT


 


EXHIBIT
E


FORM OF DEED


 


EXHIBIT
F


FORM
OF BILL OF SALE


 


EXHIBIT
G


RELEASE


 




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