Document:

EXHIBIT 10.21

 

PROTEO, INC.

 

PREFERRED STOCK PURCHASE AGREEMENT

 

 

This Preferred Stock Purchase Agreement ("Agreement")
is made this _____ day of______, 20___ by and between PROTEO, INC., a Nevada corporation with its principal place of business at
2102 Business Center Drive, Irvine, CA 92612 (the "Company") and the Purchaser of its stock, ______________ ("Purchaser").

 

RECITALS

 

		A.	The Company is engaged in research and development of pharmaceuticals. The Company now is willing
to sell shares of its Series A Preferred stock, on terms as stated herein.

 

		B.	The Company has authorized 300,000,000
shares of common stock and 10,000,000 shares of preferred stock. Currently, _________ shares of the Company's common stock are
issued and outstanding. The Company has created a Series A Preferred Stock of and designated up to 750,000 shares of the Company’s
preferred stock which voting powers, preferences and relative, participating, optional and other special rights are defined in
the Certificate of Designation of, a copy of which is attached hereto as Exhibit A. Currently, ________ shares of the Company's
Series A Preferred Stock are issued and outstanding. 

 

		C.	Purchaser and the Company now mutually desire for Purchaser to purchase ________ shares of the
Company's Series A Preferred Stock at the price per share determined herein, on the terms and conditions stated herein.

 

AGREEMENT

 

In consideration of the mutual promises, representations,
warranties and conditions set forth in this Agreement, the Company and Purchaser agree as follows.

 

1.            Purchase and Sale of Shares.

 

		1.1	Sale of Shares. The Company and its Board of Directors has authorized the issuance and sale
of ______ shares of Series A Preferred stock (the "Purchase Shares") pursuant to the terms of this Agreement, which Purchase
Shares in accordance with the Certificate of Designation, Preferences and Rights of Series A Preferred Stock (the “Certificate”),
a copy of which is attached hereto as part of this Agreement.

 

		1.2	Price per Share. The price per share shall be $______ per share, totaling to $_________
for the Purchase Shares.

 

			In reliance upon Purchaser representations and warranties contained in Section 4 hereof, and subject
to the terms and conditions set forth herein, the Company hereby agrees to sell to Purchaser _______ shares of the Company’s
Series A Preferred Stock.

 

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2.            Closing: Issuance and Delivery of Shares:
Conditions.

 

		2.1	Closing(s). The closing of the sale under this Agreement (the "Closing"), shall
be held within five (5) working days following the date of the Agreement ("Closing Date"), at the offices of the Company
or on such earlier date or at such other place as the Parties may agree.

 

		2.2	Payment of Purchase Price. At the Closing, the Purchaser shall pay the purchase price as
determined in paragraph 1.2., falling due upon execution. The payment shall be in United States funds by check, cash, by wire transfer
or by other means of payment as shall have been agreed upon by the Purchaser and the Company prior to payment.

 

		2.3	Issuance and Delivery. At the Closing, subject to the terms and conditions hereof, the Company
shall deliver an irrevocable instruction to the Company's secretary to issue and deliver to Purchaser appropriate stock certificates,
registered in the name of the Purchaser for the Shares, or his designee.

 

3.            Representations and Warranties of the
Company.

 

The Company hereby represents and warrants
to Purchaser as of the date hereof as follows, and all such representations and warranties shall be true and correct as of any
Closing Date as if then made and shall survive the Closing.

 

		3.1	Organization. The Company is a corporation, duly incorporated, validly existing and in good
standing under the laws of Nevada. The Company has all requisite power and authority to own or lease its properties and to conduct
its business as now conducted. The Company holds all licenses and permits required for the conduct of its business as now conducted,
which, if not obtained, would have a material adverse effect on the business, financial condition or results of operations of the
Company taken as a whole. The Company is qualified as a foreign corporation and is in good standing in any states where the conduct
of its business or its ownership or leasing of property requires such qualification, except where the failure to so qualify would
not have a material adverse effect on the business, financial condition or results of operations of the Company taken as a whole.

 

		3.2	Capitalization. The Company is authorized to issue 300,000,000 shares of Common Stock of
which ________ shares are outstanding at the date of this Agreement. The Company is authorized to issue 10,000,000 shares of Preferred
Stock of which ________ shares are outstanding at the date of this Agreement. All of the issued and outstanding shares of Common
Stock and Preferred Stock on the Closing Date are or will have been duly authorized, validly issued and then fully paid and non-assessable.
The Company’s right to issue shares of its stock otherwise shall not be limited by any provision herein.

 

		3.3	Authority. The Company has all requisite power and authority to enter into this Agreement,
and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement, and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company, and upon
their execution and delivery by the Company, such document will constitute a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.

 

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		3.4	Issuance of Shares. The Purchase Shares, when issued pursuant to the terms of this Agreement,
will be duly and validly authorized and issued, fully paid and non-assessable.

 

		3.5	No Conflict with Law or Documents. The execution, delivery and consummation of this Agreement,
and the transactions contemplated hereby, will not (a) conflict with any provisions of the Articles of Incorporation or Bylaws
of the Company; (b) result in any violation of or default or loss of a benefit under, or permit the acceleration of any obligation
under (in each case, upon the giving of notice, the passage of time, or both), any mortgage, indenture, lease, agreement or other
instrument, permit, franchise license, judgement, order, decree, law, ordinance, rule or regulation applicable to the Company.

 

		3.6	Consents, Approvals and Private Offering. Except for any filings required under Federal
and applicable state securities laws, all of which shall have been made as of the Closing Date to the extent required as of such
time, no permit, consent, approval, order or authorization of, or registration, declaration or filing with, any Federal, state,
local or foreign governmental authority is required to be made or obtained by the Company in connection with the execution and
delivery of this Agreement, and the consummation of the transactions contemplated hereby and thereby.

 

4.            Representations and Warranties of Purchaser.

 

Purchaser hereby represents, warrants and covenants
with the Company as follows:

 

		4.1	Legal Power. Purchaser has the requisite power, as appropriate, and is authorized to enter
into this Agreement, to purchase the Purchase Shares hereunder, and to carry out and perform his, her or its obligations under
the terms of this Agreement.

 

		4.2	Due Execution. This Agreement has been duly authorized, executed and delivered by Purchaser,
and, upon due execution and delivery by the Company, this Agreement will be a valid and binding agreement of Purchaser.
	 	 	 
	 	4.3	Investment Representations.

 

Purchaser represents and
agrees that:

 

		4.3.1	Purchaser is acquiring the Purchase Shares for its own account, not as a nominee or agent, for
investment and not with a view to or for resale in connection with, any distribution or public offering thereof within the meaning
of the Securities Act of 1933, as amended (the "Act"), except pursuant to an effective registration statement under the
Act;

 

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		4.3.2	Purchaser is an 'accredited investor,' as that term is defined in Rule 501 (a) of Regulation D
promulgated under the Act. Purchaser has such knowledge and experience in financial and business matters that it is fully able
to evaluate the merits and risks of the acquisition of the Securities, and has conducted their own investigation into the suitability
of its investment, and reviewed all the information that it considers necessary to evaluate its acceptance of the Purchase Shares.
Purchaser is able to bear the risks associated with accepting the Purchase Shares, including the risk of loss of the entire investment
in the Purchase Shares. Purchaser has received and reviewed any and all information Purchaser deemed necessary to evaluate its
investment.

 

		4.3.3	Purchaser understands that the Purchase Shares have not been registered under the Act by reason
of a specific exemption therefrom, and may not be transferred or resold except pursuant to an effective registration statement
or exemption from registration and each certificate representing the Purchase Shares will be endorsed with the following legend:

 

		(i)	THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"). THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF A CURRENT AND EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT WITH RESPECT TO SUCH SHARES,
OR AN OPINION OF THE ISSUER'S COUNSEL TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT; and

 

		(ii)	Any legend required to be placed thereon by applicable federal or state securities laws.

 

		4.3.4	Purchaser has read, and understands and agrees to the Certificate of Designation for the Series
A Preferred Stock.

 

5.            Term and Termination

 

	 	5.1	Term.
This Agreement shall expire upon total payment of the Purchase Price and issuance of _______ shares of Preferred Stock Class
A to Purchaser.
	 	 	 
		5.2.	The Company may cancel this agreement upon

 

		(i)	any misrepresentation or omission of or on behalf of the Purchaser made to the Company in connection
with this Agreement;

		(ii)	adjudication of bankruptcy, or filing of a petition under any bankruptcy or debtor’s relief
law by or against the Purchaser, or failure of the Purchaser to generally pay its debts as they become due;

 

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6.            Miscellaneous.

 

		6.1	Governing Law . This Agreement shall be governed by and construed under the laws of the
State of California.

 

		6.2	Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof
shall inure to the benefit of, and are binding upon, the successors, assigns, heirs, executors, and administrators of the parties
hereto.

 

		6.3	Entire Agreement. This Agreement and the other documents delivered pursuant hereto, constitute
the full and entire understanding and agreement among the parties with regard to the subjects hereof and no party shall be liable
or bound to any other party in any manner by a representations, warranties, covenants, or agreements except as specifically set
forth herein or therein. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties
hereto and their respective successors and assigns, any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided herein.

 

		6.4	Severability. In case any provision of this Agreement shall be invalid, illegal, or unenforceable,
it shall to the extent practicable, be modified so as to make it valid, legal and enforceable and to retain as nearly as practicable
the intent of the parties and the validity, legality, and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

 

		6.5	Amendment and Waiver. Except as otherwise provided herein, any term of this Agreement may
be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance, either
retroactively or prospectively, and either for a specified period of time or indefinitely), with the written consent of the Company
and Purchaser. Any amendment or waiver effected in accordance with this Section shall be binding upon each future holder of any
security purchased under this Agreement (including securities into which such securities have been converted) and the Company.

 

		6.6	Notices. All notices and other communications required or permitted hereunder shall be in
writing and shall be effective when delivered personally, or sent by telex or telecopier (with receipt confirmed), provided that
a copy is mailed by registered mail, return receipt requested, or when received by the addressee, if sent by Express Mail, Federal
Express or other express delivery service (receipt request) in each case to the appropriate address set forth below.

 

If to the Company:             PROTEO, INC.

ATTN: CEO

2102 Business Center Drive

Irvine,
CA 92612

 

If to Purchaser:                   ______________

______________

 

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		6.7	Titles and Subtitles. The titles of paragraphs and subparagraphs of this Agreement are for
convenience of reference only and are not be not considered in construing this Agreement.

 

		6.8	Counterparts. This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one instrument.

 

 

 

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

 

 

"COMPANY"

PROTEO, INC. a Nevada Corporation

 

 

By: __________________

 

 

 

"PURCHASER"

 

 

By: __________________

 

 

 

 

 

 

 

 

 

 

 

Exhibit A: Certificate of Designation of Series
A Preferred Stock

 

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Exhibit A

 

CERTIFICATE OF DESIGNATION OF SERIES A PREFERRED
STOCK

 

OF

 

PROTEO, INC.

A NEVADA CORPORATION

 

 

Proteo, Inc., a Nevada
corporation (the "Corporation"), hereby certifies that the following resolution was adopted by the Board of Directors
of the Corporation:

 

RESOLVED, that pursuant
to the authority vested in the Board of Directors of this Corporation (the "Board of Directors") in accordance with the
provisions of the Articles of Incorporation of the Corporation, there is hereby created, a series of Preferred Stock consisting
of 750,000 shares, which series shall have the following powers, designations, preferences and relative, participating, optional
and other special rights, and the following qualifications, limitations and restrictions as follows:

 

Section 1.  DESIGNATION
AND AMOUNT. The shares of Preferred Stock created hereby shall be designated as "Series A Preferred Stock" and the authorized
number of shares constituting such series shall be 750,000.

 

Section 2.  DIVIDENDS
AND DISTRIBUTIONS.

 

(A)  The holders
of the then outstanding shares of Series A Preferred Stock shall be entitled to receive, when, as and if declared by the Board
of Directors, out of funds of the Corporation legally available therefore, preferential dividends at the per share rate of two
(2) times the per share amount of each and any cash and non-cash dividend distributed to holders of the Corporation's Common Stock
when, as and if declared by the Board of Directors.

 

(B)  No dividend
shall be paid or declared on any share of Common Stock, unless a dividend, payable in the same consideration and manner, is simultaneously
paid or declared, as the case may be, on each share of Series A Preferred Stock in an amount determined as set forth in paragraph
(A) above. For purposes hereof, the term "dividends" shall include any pro rata distribution by the Corporation, out
of funds of the Corporation legally available therefore, of cash, property, securities (including, but not limited to, rights,
warrants or options) or other property or assets to the holders of the Common Stock, whether or not paid out of capital, surplus
or earnings.

 

(C)  If no dividend
is distributed according to Section 2 (A), the holders of the then outstanding shares of Series A Preferred Stock shall be entitled
to an annual stock dividend, when, as and if declared by the Board of Directors, payable at the rate of one (1) share of the Series
A Preferred Stock for each twenty (20) shares of Series A Preferred Stock then held by each holder of Series A Preferred Stock.
Such stock dividend shall be paid on June 30 of each year, commencing with the first June 30 in the year subsequent to the calendar
year in which the shares of Series A Preferred Stock were issued and no dividend was distributed according to Section 2 (A). No
fractional shares of Series A Preferred Stock shall be issued in connection with the payment of the stock dividend. In lieu of
fractional shares, the Corporation shall issue such additional fraction of a share as is necessary to increase the fractional share
to a full share.

 

No stock dividend under this paragraph shall be paid after December
31, 2011.

 

(D)  The Board
of Directors may fix a record date for the determination of holders of shares of Series A Preferred Stock entitled to receive any
dividend or distribution as provided in Paragraph (A) or Paragraph (C) above.

 

Section 3.  VOTING
RIGHTS. Except than otherwise provided herein or by law, the shares of Series A Preferred Stock shall have no voting rights other
than on such matters submitted to a vote to the stockholders of Series A Preferred Stock and such other stock designated to be
the same class of the Company's stock.

 

Section 4.  REACQUIRED
SHARES. Any shares of Series A Preferred Stock purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of Series A Preferred Stock or of any other series of Preferred
Stock as designated by the Board of Directors from time to time.

 

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Section 5.  LIQUIDATION,
DISSOLUTION OR WINDING UP. Upon any liquidation, voluntary or otherwise, dissolution or winding up of the Company, holders of Series
A Preferred Stock shall be entitled to receive per share distributions equal to two (2) times the rate of per share distributions
to be made to the holders of Common Stock. No distributions shall be made unless nay accrued and unpaid dividends and distributions
on the Series A Preferred Stock have been made prior thereto. In the event, the Company shall have (i) subdivided the outstanding
Common Stock, or (ii) combined the outstanding Common Stock into a smaller number of shares by a reverse stock split or otherwise,
after the issuance of Series A Preferred Stock, distributions payable to Series A Preferred Stock under this Section 5 shall be
adjusted accordingly.

 

Section 6.  CONSOLIDATION;
MERGER; ETC. In the event the Company shall enter into any consolidation, merger combination or other transaction in which the
shares of Common Stock are exchanged into other stock or securities, cash and /or any other property, then in any such case each
share of Series A Preferred Stock shall automatically be simultaneously exchanged for or converted into the same stock or securities,
cash and/or other property at a rate per share equal to 1.5 times the rate per share that the Common Stock is being exchanged or
converted.. In the event, the Company shall (i) subdivide the outstanding Common Stock, or (ii) combine the outstanding Common
Stock into a smaller number of shares by a reverse stock split or otherwise, the amount set forth in the preceding sentence shall
be adjusted at the same rate.

 

Section 7.  REDEMPTION.
The shares of Series A Preferred Stock shall not be redeemable.

 

Section 8.  RANKING.
The Series A Preferred Stock may rank junior to any other series of the Corporation's Preferred Stock as to the payment of dividends
and the distribution of assets as may be determined in the designation of any such series of Preferred Stock.

  

Section 9.  AMENDMENT.
At any time when any shares of Series A Preferred Stock are outstanding, neither the Articles of Incorporation of the Corporation
nor this Certificate of Designation shall be amended or altered in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to affect them adversely without the affirmative vote of holders
representing a majority of the outstanding shares of Series A Preferred Stock, voting separately as a class.

   

IN WITNESS WHEREOF, the
undersigned have executed this Certificate and do affirm the foregoing as true and correct this 05 day of June 2008.

 

  

/s/ Birge Bargmann

Birge Bargmann

President, CEO and CFO

 

	 	
        Attest:

         

        /s/ Barbara Kahlke

        Barbara Kahlke, Ph.D.

        Secretary
	 

 

 

    	8Exhibit 10.16

 

Parcel Identification Number: 

 

540-005-00-00-0016-00

 

RECORDATION REQUESTED BY:

 

 

WHEN RECORDED MAIL TO:

 

 

SEND TAX NOTICES TO:

 

 

 

 

FOR RECORDER'S USE ONLY

 

NOTICE: THIS SUBORDINATION OF MORTGAGE
RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER
SECURITY INSTRUMENT. 

 

SUBORDINATION OF MORTGAGE

 

THIS SUBORDINATION OF MORTGAGE dated
September 27, 2013, is made and executed among BENJAMIN MARCUS HOMES, LLC ("Borrower"); Shepherd’s Finance, LLC
("Mortgagee"); and United Bank, Inc. ("Lender").

 

SUBORDINATED INDEBTEDNESS. Mortgagee
has extended the following described financial accommodations, secured by the Real Property (the "Subordinated Indebtedness"):

 

Promissory Note dated December 30 2011,
From BENJAMIN MARCUS HOMES, LLC to Shepherd’s Finance, LLC in the amount of $8,075,776.76.

 

SUBORDINATED MORTGAGE. The Subordinated
Indebtedness is or will be secured by the Real Property and evidenced by a mortgage dated December 30, 2011 from BENJAMIN MARCUS
HOMES, LLC ("Mortgagor") to Shepherd’s Finance, LLC ("Mortgagee") (the "Subordinated Mortgage")
and recorded in WASHINGTON County, Commonwealth of Pennsylvania as follows:

 

Recorded on January 03, 2012, Instrument
Number 201200085.

 

Further the Subordinated Indebtedness is
secured by UCC’s, and these UCC’s are hereby subordinated to the same Superior Indebtedness, and are included in the
definition of “Subordinated Mortgage”:

 

Recorded as Instrument Numbers 2012011104769
and 201213141

 

REAL PROPERTY DESCRIPTION. The Subordinated
Mortgage covers, among other property, the following described real property (the "Real Property") located in WASHINGTON
County, Commonwealth of Pennsylvania:

 

ALL that certain tract of land situate
in Peters Township, Washington County, Pennsylvania being designated as Parcel B on the Nelson Boyer Plan No. 2, as recorded in
Instrument No. 201041194 in the Washington County Recorder of Deed Office, more particularly bounded and described as follows,
to wit:

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BEGINNING at a corner common to Parcel
A and on line of Parcel B in the Hamlet of Springdale Plan of Lots as recorded in Instrument No. 200716706; thence along line of
said Hamlet of Springdale Plan and continuing along line of lands of Edward Courtney Jr., North 69° 26' 19" East a distance
of 969.13 feet to a point on line of lands of Albert Vibonese; thence along line of Vibonese and continuing along lands of Alexander,
South 29° 33' 19" East a distance of 346.50 feet to a point; thence by the same and continuing along lands of Groff, Phillips
and the Sienna Woods Phase 5 Plan of Lots, South 29° 06' 25" East a distance of 1188.08 feet to an iron pin corner common
to lands of Edward Schwartz; thence along said Schwartz and continuing along lands of Burns, Adams and Ondayko, North 80° 06'
42" West a distance of 629.77 feet to a point; thence along line of said Ondayko the following courses and distances: South
83° 42' 41" West a distance of 190.75 feet to a red oak stump; North 83° 18' 19" West a distance of 575.65 feet
to a stone; South 03° 39' 41" West a distance of 299.74 feet; South 07°58' 49" East a distance of 155.27 feet;
South 02° 11' 41" West a distance of 151.33 feet to a point in the centerline of Sienna Trail; thence along said centerline,
North 74° 35' 23" West a distance of 20.55 feet to a point to a corner common to lands of Brian Twardowski; thence along
said Twardowski the following courses and distances, North 02° 11' 41" East a distance of 144.85 feet; North 07° 58'
49" West a distance of 151.04 feet; South 60° 41' 32" West a distance of 81.43 feet to a point at the southeast corner
of the aforesaid Parcel A; thence along said Parcel A the following courses and distances: North 08° 02' 32" West a distance
of 391.64 feet; North 48° 14' 23" West a distance of 50.00 feet; by an arc of a circle curving to the left having a radius
of 125.29 feet, an arc distance of 10.41 feet (Chord=North 39° 22' 09" East - 10.40 feet); North 36°59' 22" East
a distance of 54.51 feet; North 48° 45' 16" West a distance of 115.26 feet; North 00° 26' 50" West a distance
of 124.92 feet; North 38° 14' 43" East a distance of 224.37 feet; North 69° 06' 48" East a distance of 107.03
feet; North 17° 29' 10" West a distance of 272.62 feet to a point at the place of BEGINNING.

 

Containing an area of 33.765 acres more
or less.

 

Tax Parcel ID #540-005-00-00-0016-00

 

SUPERIOR INDEBTEDNESS. Lender has
extended or has agreed to extend the following described financial accommodations to Borrower, secured by the Real Property (the
"Superior Indebtedness"):

 

Note dated September 27, 2013, from
BENJAMIN MARCUS HOMES, LLC to United Bank, Inc., in the amount of $1,146,000 and the Partial Release and Paydown agreement of the
same date.

 

LENDER'S LIEN. The Superior Indebtedness
is or will be secured by the Real Property and evidenced by a mortgage, dated

 

September 27, 2013, from Borrower to Lender
(the "Lender's Lien") and recorded in WASHINGTON County, Commonwealth of Pennsylvania as follows:

 

Recorded on 10/1/2013,
Instrument Number201329649.

 

As a condition to the granting of the requested
financial accommodations, Lender has required that the Lender's Lien be and remain superior to the Subordinated Mortgage.

 

REQUESTED FINANCIAL ACCOMMODATIONS.
Mortgagee, who may or may not be the same person or entity as Mortgagor, and Borrower each want Lender to provide financial accommodations
to Borrower in the form of the Superior Indebtedness. Borrower and Mortgagee each represent and acknowledge to Lender that Mortgagee
will benefit as a result of these financial accommodations from Lender to Borrower, and Mortgagee acknowledges receipt of valuable
consideration for entering into this Subordination.

 

NOW THEREFORE THE PARTIES TO THIS SUBORDINATION
HEREBY AGREE AS FOLLOWS: 

 

SUBORDINATION. The Subordinated
Mortgage and the Subordinated Indebtedness secured by the Subordinated Mortgage is and shall be subordinated in all respects to
Lender's Lien and the Superior Indebtedness as it relates to the Real Property, and it is agreed that Lender's Lien shall be and
remain, at all times, prior and superior to the lien of the Subordinated Mortgage in relation to the Real Property

 

MORTGAGEE'S REPRESENTATIONS AND WARRANTIES.
Mortgagee represents and warrants to Lender that: (A) no representations or agreements of any kind have been made to Mortgagee
which would limit or qualify in any way the terms of this Subordination other than those contained in this document; (B) this Subordination
is executed at Borrower's request and not at the request of Lender; (C) Lender has made no representation to Mortgagee as to the
creditworthiness of Borrower; and (D) Mortgagee has established adequate means of obtaining from Borrower on a continuing basis
information regarding Borrower's financial condition. Mortgagee agrees to keep adequately informed from such means of any facts,
events, or circumstances which might in any way affect Mortgagee's risks under this Subordination, and Mortgagee further agrees
that Lender shall have no obligation to disclose to Mortgagee information or material acquired by Lender in the course of its relationship
with Mortgagee.

 

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MORTGAGEE WAIVERS. Mortgagee waives
any right to require Lender: (A) to make, extend, renew, or modify any loan to Borrower or to grant any other financial accommodations
to Borrower whatsoever; (B) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment
of any Superior Indebtedness secured by Lender's Lien, or notice of any action or nonaction on the part of Borrower, Lender, any
surety, endorser, or other guarantor in connection with the Superior Indebtedness, excluding in connection with the creation of
new or additional indebtedness; (C) to resort for payment or to proceed directly or at once against any person, including Borrower;
(D) to proceed directly against or exhaust any collateral held by Lender from Borrower, any other guarantor, or any other person;
or (E) to pursue any other remedy within Lender's power.

 

RESTRICTIONS ON LENDER. Lender may
not, without written consent of Mortgagee, which may be unreasonably withheld (A) make one or more additional loans to Borrower
secured by the Real Property; (B) alter, compromise, renew, extend, accelerate, or otherwise change the time for payment or other
terms of the Superior Indebtedness or any part of it, including increases of the rate of interest on the Superior Indebtedness;
(C) transfer or assign its rights under this Subordination to a person or entity other than to an assignee of the Lender’s
Lien and note evidencing the Superior Indebtedness; (D) cross collateralize the Superior Indebtedness with any other indebtedness
from the Borrower to the Lender; and (E) advance funds after the initial draw, or reduce amount owed on lot pay downs.

 

DEFAULT BY BORROWER. If Borrower
becomes insolvent or bankrupt, this Subordination shall remain in full force and effect. Any default by Borrower under the terms
of the Subordinated Indebtedness also shall constitute an event of default under the terms of the Superior Indebtedness in favor
of Lender.

 

MISCELLANEOUS PROVISIONS. The following
miscellaneous provisions are a part of this Subordination:

 

Amendments. This Subordination constitutes
the entire understanding and agreement of the parties as to the matters set forth in this Subordination. No alteration of or amendment
to this Subordination 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.

 

Authority. The person who signs
this Subordination as or on behalf of Mortgagee represents and warrants that he or she has authority to execute this Subordination
and to subordinate the Subordinated Indebtedness and the Mortgagee's security interests in Mortgagee's property, if any.

 

Caption Headings. Caption headings
in this Subordination are for convenience purposes only and are not to be used to interpret or define the provisions of this Subordination.

 

Governing Law. With respect to procedural
matters related to the perfection and enforcement of Lender's rights against the Property, this Subordination 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 Subordination 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 Subordination 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. 

 

Choice of Venue. If there is a lawsuit,
Mortgagee agrees upon Lender's request to submit to the jurisdiction of the courts of WASHINGTON County, Commonwealth of Pennsylvania.

 

    	3

    	 

    

 

Successors. This Subordination shall
extend to and bind the respective heirs, personal representatives, successors and assigns of the parties to this Subordination,
and the covenants of Mortgagee herein in favor of Lender shall extend to, include, and be enforceable by any transferee or endorsee
to whom Lender may transfer any or all of the Superior Indebtedness.

 

No Waiver by Lender. Lender shall
not be deemed to have waived any rights under this Subordination 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 Subordination 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 Subordination. No prior waiver by Lender, nor any course of
dealing between Lender and Mortgagee, shall constitute a waiver of any of Lender's rights or of any of Mortgagee's obligations
as to any future transactions. Whenever the consent of Lender is required under this Subordination, 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.

 

No Modification. The Subordinated
Indebtedness is granted with the condition that the Lender will not modify the original terms of agreements between Lender and
Borrower dealing with the Superior Indebtedness, including but not limited to the Mortgage Amount without the written consent from
the Mortgagee.

 

NOTICE: THIS SUBORDINATION AGREEMENT
CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN, A PORTION OF WHICH MAY
BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND. 

 

EACH PARTY TO THIS SUBORDINATION ACKNOWLEDGES
HAVING READ ALL THE PROVISIONS OF THIS SUBORDINATION, AND EACH PARTY AGREES TO ITS TERMS. THIS SUBORDINATION IS DATED SEPTEMBER
27, 2013.

 

THIS SUBORDINATION IS GIVEN UNDER SEAL
AND IT IS INTENDED THAT THIS SUBORDINATION IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW.

 

 

 

    	4

    	 

    

 

 

BORROWER:

BENJAMIN MARCUS HOMES, LLC

 

 

	
        By: /s/ Mark L. Hoskins

        MARK L. HOSKINS, Manager of BENJAMIN MARCUS
        HOMES, LLC
	(Seal) 

 

 

 

 

MORTGAGEE:

Shepherd’s Finance, LLC

 

 

	
        X /s/ Daniel M. Wallach

        Daniel M. Wallach
	(Seal) 

 

 

 

 

LENDER:

United Bank, Inc.

 

 

	
        X /s/ Keith Morgan

        Authorized Officer
	(Seal) 

 

 

 

 

 

 

 

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