8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 15, 2024

Shepherd’s Finance, LLC

(Exact name of registrant as specified in its charter)

Commission File Number: 333-263759

Delaware	36-4608739
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

13241 Bartram Park Blvd., Suite 2401, Jacksonville, Florida 32258

(Address of principal executive offices, including zip code)

(302) 752-2688

(Registrant’s telephone number, including area code)

None.

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
None	None	None

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act (17 CFR 230.405) or Rule 12b-2 of the Exchange Act (17 CFR 240.12b-2).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Item 1.01. Entry into a Material Definitive Agreement.

On February 15, 2024, Shepherd’s Finance, LLC (the “Company”) entered into a certain Membership Interest Purchase Agreement (the “Agreement”) with Mark L. Hoskins and Barrett Hoskins, pursuant to which Mark L. Hoskins and Barrett Hoskins agreed to sell to the Company and the Company agreed to purchase from Mark L. Hoskins and Barrett Hoskins 100% of the membership interests (the “Acquisition”) in 339 Justabout Land Co., LLC (“339”), a land development company, for a purchase price of approximately $3,892,000 (the “Purchase Price”). 339 was formed in 2022 and, in 2022, purchased a large tract of land in Peters Township, Washington County, Pennsylvania, a suburb of Pittsburgh. The property has since been subdivided into two parcels. One parcel is being developed into 37 lots which should be available for construction of homes starting in the summer of 2024, of which one lot was purchased and is currently owned by Benjamin Marcus Homes, LLC (“BMH”), and the other parcel will be developed into 24 lots, which should be available for construction later this year or early next year (36 lots owned by 339 which should be available for construction, together with 24 lots owned by 339 which should be available for construction, the “60 Lots”). The total expected selling price of the lots is $17,800,000. The Purchase Price was then deposited by Mark L. Hoskins and BMH, which they also own, as equity. BMH immediately repaid an intercompany debt to 339 of $892,000, which in turn was returned to the Company, leaving the net investment at $3,000,000. 339 was purchased subject to the debt owed by 339, which included a first position development loan from the Company, and two subordinate financings from lenders outside of the Company. After the Acquisition, the Company will have approximately $9,100,000 invested in 339 and 339 will have an additional approximately $1,900,000 in debt. The Company anticipates further expenditures of $2,700,000 for development, not including capitalized interest.

In connection with the Acquisition, the Company caused 339 to enter into an agreement with BMH which gives BMH the option to purchase certain 37 lots owned by 339 for a period of one year at specified prices (the “Option Agreement”). BMH may exercise two additional one-year extensions 60 days prior to the expiration of the current option period or extension period subject to certain conditions. BMH incurred an option fee of $890,000 for the first year of the option agreement. The Company is also working with BMH to sell some lots to a third party. The Company also caused 339 to enter into a management services agreement (the “Management Services Agreement”) with BMH to manage the development of 60 Lots for a period of three years. The Management Services Agreement only pays BMH if all of the 60 Lots are sold within three years. If that is achieved, BMH will receive 67% of the profit from the sale of the 60 Lots.

As a result of the Acquisition, the Company has lowered the amount it is lending to BMH, its largest customer, which is owned by Mark Hoskins, and anticipates having direct sales contracts with third party builders for some of the lots, further reducing its exposure to its largest customer.

Item 2.01. Completion of Acquisition or Disposition of Assets.

On February 15, 2024, the Company completed the Acquisition of 339. The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.01.

Item 9.01. Financial Statements and Exhibits.

(a) Financial statements of real estate acquired.

Since it is impracticable to provide the required financial statements for the acquired business described in Item 2.01 at the time of this filing and no financials (audited or unaudited) are available at this time, the Company hereby confirms that it intends to file the required financial statements within 71 calendar days by amendment to this Form 8-K.

(b) Pro forma financial statements.

See paragraph (a) above

(d) Exhibits.

10.1†	Membership Interest Purchase Agreement, dated February 15, 2024, by and among Shepherd’s Finance, LLC, and Mark L. Hoskins and Barrett Hoskins.
10.2	Option Agreement, dated February 15, 2024, by and among 339 Justabout Land Co., LLC and Benjamin Marcus Homes. L.L.C.
10.3	Management Services Agreement, dated February 15, 2024, by and among 339 Justabout Land Co., LLC and Benjamin Marcus Homes. L.L.C.
104	Cover page interactive data file (embedded within the Inline XBRL document)

† Certain schedules, annexes and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K, but will be furnished supplementally to the SEC upon request.

Signature(s)

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Shepherd’s Finance, LLC
Date: February 21, 2024	By:	/s/ Daniel M. Wallach
		Daniel M. Wallach
		Chief Executive Officer and Manager

EX-10.1

Exhibit 10.1

MEMBERSHIP INTEREST PURCHASE AGREEMENT FOR

339 JUSTABOUT LAND CO., LLC

THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT (the “Agreement”) is made effective this _15th__ day of February, 2024, by and between MARK L. HOSKINS, an adult individual and BARRETT HOSKINS, an adult individual (collectively, the “Sellers”) and SHEPHERDS FINANCE, LLC, a Delaware limited liability company (herein the “Buyer”).

WITNESSETH:

WHEREAS, 339 Justabout Land Co., LLC (herein the “Company”) is a Pennsylvania limited liability company with its principal office situated at 333 Technology Drive, Suite 108, Canonsburg, Pennsylvania 15317;

WHEREAS, Sellers collectively hold a One Hundred Percent (100%) interest in the Company;

WHEREAS, Sellers are desirous to sell and the Buyer is desirous to purchase Sellers’ One Hundred Percent (100%) interest in the Company as set forth in the attached Exhibit “A” pursuant and subject to the terms and conditions of this Agreement;

WHEREAS, following the sale and pursuant to the terms of this Agreement, Sellers will no longer be members in the Company, and Buyer will be the sole member;

WHEREAS, at the conclusion of this sale, the respective interests of the Company shall be as reflected in the attached Exhibit “B”; and

NOW, THEREFORE, in consideration of the above recitals, which are made a part hereof, and in consideration of the mutual promises below and intending to be legally bound hereby, the parties agree as follows:

Article 1.

Sale and Purchase.

1.01. Sellers agree to sell to Buyer and Buyer agrees to purchase from Sellers their One-Hundred Percent (100%) interests in the Company, free and clear of all liens, claims and encumbrances for a total purchase price of Three Million Dollars and 00/100 ($3,000,000.00), plus Company-related entities’ loans receivable of the Company, less debt payable to Company-related entities to be calculated as determined per the balance sheet of Company, as amended by Buyer, and mutually agreed upon by Seller and Buyer (in the aggregate the “Purchase Price”) as set forth on Exhibit “C”.

1.02. At the Closing as defined herein, Seller shall assign their One Hundred Percent (100%) interest in the Company to the Buyer and thereafter, Seller shall cease to be a Member in the Company.

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1.03. Following the conclusion of the Closing as defined herein, the Buyer shall be the sole Member in the Company.

Article 2.

The Closing.

2.01. The Closing of the sale and purchase under this Agreement shall be effective on February ____15____, 2024 (herein the “Closing” or “Closing Date”) and shall take place at such mutually agreed upon place.

2.02. 2.02 At the Closing, the Buyer shall pay the Purchase Price to Sellers as set forth in Exhibit “C”.

Article 3.

Representations and Warranties of Sellers.

3.01. Sellers hereby represent and warrant to Buyer that Sellers own the interests referenced herein and upon delivery of said interests to Buyer, Buyer will be vested with full right, title and interest therein. The interests have been duly authorized and validly issued, are fully paid and non-assessable and have not been issued in violation of any preemptive rights. There are no existing options, warrants, calls or commitments of any character whatsoever relating to any of the interests. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated under this Agreement will violate the terms of any deed, will, trust, contract or agreement affecting the interests. This Agreement has been duly and validly executed and delivered by Sellers and constitutes a legal, valid and binding obligation of Seller, enforceable against Sellers in accordance with its terms.

3.02. The Sellers have the full power and authority to execute and perform this Agreement in accordance with its terms and this Agreement is a legal, valid and binding Agreement of such Sellers, enforceable against such Sellers in accordance with its terms, subject to applicable bankruptcy and similar laws and general principles of equity.

3.03. Neither the execution of this Agreement by the Sellers, nor the performance of such Sellers’ obligations hereunder, will conflict with, or constitute a default under, any agreement or commitment that is binding upon them. No license, consent or approval of any person is required for each Seller’s execution and delivery of this Agreement or for the consummation by such Sellers of the transactions contemplated hereby.

3.04. There are no outstanding options or other rights granted or issued by or to Sellers to acquire interests in the Company nor are there any outstanding securities or other instruments convertible into such interests issued by or to such Seller.

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Article 4.

Representations and Warranties of Buyer.

4.01. The interests being acquired pursuant to this Agreement have not been registered under the Securities Act of 1933 or any other federal or state securities laws (herein the “Securities Acts”); the interests will be held by Buyer for investment; and an appropriate exemption from registration under the Securities Acts may not be available if the interests were acquired by Buyer with a view to distribution or short-term resale. Buyer is acquiring Sellers’ interests for the Buyer’s own use, for long term investment and not with a view to the resale or distribution thereof. The Buyer will not transfer, sell, assign or offer for sale or transfer of all or any portion of the interests unless there is an effective registration or other qualification or exemption relating thereto under all applicable Securities Acts. Buyer understands that neither the Seller nor the Company are under any obligation to register the interests or to assist Buyer in complying with any exemption from registration under the Securities Acts. Furthermore, the Buyer realizes that the interests are unlikely to ever qualify as publicly traded and disposition may be limited in the case of resale of the interests by applicable securities laws and the absence of any market for the interests.

4.02. The Buyer acknowledges that it has previously received and reviewed information about the financial condition, business, assets and properties of the Company; it has had business relations with the Company and its business for varying periods of time in the past; it has had an opportunity to fully investigate the financial and business condition of the Company and the condition of the assets and properties of the Company and to ask questions of the Manager, Members and employees of the Company, as applicable, and freely decide to purchase the interests in accordance with this Agreement; and it is satisfied that the Purchase Price, as set in Article I, is a fair value for the interests based on Buyer’s own investigation and review.

4.03. Buyer has the full power and authority to execute and perform under this Agreement as required by Buyer at Closing. This Agreement is, and when executed and delivered at Closing each of the Buyer’s documents will be, a legal, valid and binding agreement or obligation of the Buyer enforceable against such Buyer in accordance with its terms.

4.04. Neither the execution of this Agreement, nor the performance of such Buyer’s obligations hereunder, will conflict with, or constitute a default under, any agreement or commitment that is binding upon Buyer. No license, consent or approval of any person is required for Buyer’s execution and delivery of this Agreement or for the consummation by such Buyer of the transactions contemplated hereby or thereby.

Article 5.

Conditions Precedent to Closing.

5.01. The obligations of Buyer under this Agreement shall be subject to the satisfaction or waiver on or before the Closing Date of the conditions that all representations and warranties of Seller contained in this Agreement shall be true in all material respects as of the date hereof and as of the Closing Date as if such representations and warranties were made on and as of the Closing Date, and that Seller shall have performed in all material respects all agreements, covenants and conditions required by this Agreement to be performed by them on or prior to the Closing Date.

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5.02. In the event any of the material conditions to the obligations of Buyer are not satisfied or waived on or prior to the Closing Date, then Buyer may terminate and cancel this Agreement by delivery of written notice of such action to Sellers on such date.

5.03. Proceeds of the Purchase Price are payable to Sellers as set forth in Exhibit “C” attached hereto.

5.04. No default shall exist as of the Closing Date with any loan obligations of Sellers to Buyer.

5.05. On or before the Closing Date, a Sales Agreement must be entered into with Ryan Homes, or a similar home builder (any or all hereinafter referred to as “Builder”) for the purchase by Builder from the Company of no less than twenty-four (24) lots owned by the Company in a form and substance acceptable to Buyer, in its sole discretion.

5.06. At Closing the Company will enter into an Option Agreement for the Purchase and Sale of Real Property with Benjamin Marcus Homes, LLC (“BMH”) for purchase by BMH from the Company of the thirty-seven (37) remaining lots not subject to the above-referenced agreement with Builder upon terms and conditions acceptable to Buyer and to BMH

5.07. At Closing the Company shall enter into a management contract with BMH to handle administration of the Company and development and sales of the lots owned by the Company upon terms and conditions acceptable to Buyer and BMH.

Article 6.

Subject to Operating Agreement.

6.01. Buyer specifically agrees and understands that the purchase of the interests herein (and any future sale, transfer and/or pledge thereof) is subject to the terms of the Operating Agreement of the Company attached hereto as Exhibit “D”.

6.02. Sellers certify that they are the owners of all the interests in the Company and the sale hereby to Buyer is in compliance with or has satisfied all terms and conditions of such sale under the Operating Agreement.

Article 7.

Miscellaneous.

7.01. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors, personal representatives and permitted assigns, but shall not be assigned by any party without the written consent of the other parties hereto (which consent may be withheld in the sole discretion of such other parties).

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7.02. This Agreement constitutes the entire understanding among the parties hereto concerning the subject matter hereof and supersedes any and all prior written agreements and any and all prior or contemporaneous oral agreements or understandings relating to the subject matter hereof.

7.03. Any failure by any of the parties hereto to comply with any of the obligations, agreements or conditions set forth herein may be waived by the other party or parties, provided, however, that any such waiver shall not be deemed a waiver of any other obligation, agreement or condition contained herein or a continuing waiver of such obligation, agreement or condition.

7.04. This Agreement may not be amended, modified, superseded, canceled, renewed or extended, nor may any term or condition hereof be waived, except by a written instrument or document signed by all parties hereto or, in the case of a waiver, signed by the party sought to be charged therewith. No waiver by any party of the breach of any provision hereof shall be deemed to constitute a waiver of any continuing or subsequent breach of such provision or any other provision hereof. Except as otherwise provided herein, the rights and remedies expressly granted hereunder shall be cumulative with respect to, and shall not be deemed to exclude, any other rights and remedies to which any party shall be entitled at law or in equity.

7.05. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to choose-of-law provisions. All claims, disputes, and other matters in question arising out of or relating to this Agreement or the breach thereof shall first be referred to mediation under the then-current industry mediation rules of the American Arbitration Association. If the parties are unable to amicably resolve the dispute through mediation, then the parties may resort to a judicial forum. The Court of Common Pleas of Washington County, Pennsylvania, or the United States District Court for the Western District of Pennsylvania, shall be the exclusive judicial forum for the resolution of all disputes arising hereunder or in connection herewith.

7.06. This Agreement shall be deemed to be severable, so that if any provision hereof shall be determined by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof shall continue to remain valid and enforceable in accordance with their terms.

7.07. This Agreement may be executed in multiple counterparts, each of which may contain the signatures of one or more of the parties, all of which, taken together, shall constitute one and the same instrument.

7.08 The Buyer and Sellers understand their right to individual counsel and their rights may be impacted by failing to secure counsel to represent their individual rights as a Buyer and a Seller as it relates to this Agreement and any and all documents associated therewith. All parties have been informed of this right and waive their rights to secure independent counsel despite that conflict of interest.

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IN WITNESS WHEREOF, the parties hereto have duly executed this Membership Interest Buyout Agreement on the date first above written.

Witness:	SELLERS:
/s/ Kristina Hall	/s/ MARK L. HOSKINS
	MARK L. HOSKINS
/s/ Erik	/s/ BARRETT HOSKINS
	BARRETT HOSKINS

Witness:	BUYER:
	SHEPHERD’S FINANCE, LLC
/s/	By:	/s/ Daniel M. Wallach
	Name:	Daniel M. Wallach
	Title:	Chief Executive Officer

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EXHIBIT “A”

[COMPANY INTERESTS – Before Sale]

Mark L. Hoskins – 50%

Barrett Hoskins – 50%

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EXHIBIT “B”

[COMPANY INTERESTS – After Sale]

Shepherds Finance, LLC – 100%

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EXHIBIT “C”

[PURCHASE PRICE TABLE]

Cash flow from the purchase of 339 Justabout Land Co.

From Shepherds:

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EXHIBIT “D”

[OPERATING AGREEMENT]

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EX-10.2

Exhibit 10.2

OPTION AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY

This Option Agreement is made this 15th day of February, 2024 (“Effective Date”), by and between 339 Justabout Land Co. LLC, a Pennsylvania limited liability company having a registered address of 333 Technology Drive, Suite 108, Canonsburg, Pennsylvania 15317 (hereinafter together called “Optionor”) and Benjamin Marcus Homes, L.L.C., a Pennsylvania limited liability company, having a registered address at 333 Technology Drive, Suite 108, Canonsburg, Pennsylvania 15317 (hereinafter called “Optionee”).

WHEREAS, Optionor is the owner of certain real property situate in Peters Township, Washington County, Pennsylvania, commonly known as Lots 101-119 and 201-218 Tuscany II subdivision (the “Lots”), and being more particularly described in Exhibit “A” attached to this Agreement and made a part hereof (hereinafter collectively called the “Property”); and

WHEREAS, Optionee desires to acquire the exclusive and irrevocable right and option to purchase the Property and Optionor desires to grant such option to Optionee.

NOW THEREFORE, for the consideration hereinafter provided and intending to be legally bound hereby, Optionor and Optionee agree as follows:

1. Grant of Option. Optionor grants to Optionee the exclusive and irrevocable right and option to purchase the Property (hereinafter called the “Option”).

2. Option Price. The net purchase price for the Property to be received by Optionor is per lot as follows (hereinafter called the “Option Price”):

(Tuscany II Subdivision)

Lot 101 - $295,000.00	Lot 201 - $400,000.00
Lot 102 - $325,000.00	Lot 202 - $375,000.00
Lot 103 - $350,000.00	Lot 203 - $400,000.00
Lot 104 - $375,000.00	Lot 204 - $325,000.00
Lot 105 - $350,000.00	Lot 205 - $375,000.00
Lot 106 - $375,000.00	Lot 206 - $375,000.00
Lot 107 - $425,000.00	Lot 207 - $395,000.00
Lot 108 - $425,000.00	Lot 208 – $375,000.00
Lot 109 - $425,000.00	Lot 209 - $400,000.00
Lot 110 - $395,000.00	Lot 210 - $350,000.00
Lot 111 - $395,000.00	Lot 211 - $325,000.00
Lot 112 - $375,000.00	Lot 212 - $350,000.00
Lot 113 - $325,000.00	Lot 213 - $375,000.00
Lot 114 - $350,000.00	Lot 214 – $350,000.00
Lot 115 - $375,000.00	Lot 215 - $350,000.00
Lot 116 - $350,000.00	Lot 216 - $350,000.00
Lot 117 - $285,000.00	Lot 217 - $325,000.00
Lot 118 - $350,000.00	Lot 218 - $275,000.00
Lot 119 - $275,000.00

3. Option Period. The Option shall commence on the Effective Date and shall terminate one year thereafter (hereinafter referred to as the “Option Period”), plus any Extension Period (as defined in Section 4 below).

4. Consideration for Option. The Option is granted in consideration of Optionee’s payment to Optionor of the sum of five (5%) percent of the aggregate Option Price of all Unsold Lots (which includes all Lots considered part of the Business as defined in the Management Services Agreement set forth in Section 8 hereinafter) as of the first day of the Effective Date and as of the first day of any successive Extension Period (hereinafter the “Option Consideration”). Optionee may exercise two (2) additional one-year extensions (“Extension Period”), sixty (60) days prior to the expiration of the then current Option Period or Extension Period as the case may be by delivery to Optionor of written notice thereof by any method specified in Section 6 of this Agreement. Both parties may also cancel this Agreement by such written notice sixty (60) days prior to the expiration of the then current Option Period or Extension Period to be effective at the end of such period; provided, however; that the Extension Periods shall be available to Optionee only if total sales of the Unsold Lots equals or exceeds $4,100,000.00 as of the date of the exercise of the first Extension Period and $10,700,000.00 as of the exercise of the second Extension Period.

5. Payment of Option Consideration. Payment of the Option Consideration shall be deferred until the closing of each Lot. Upon closing of each of the Lots by Optionee, or by a third party designated by Optionee, ten (10%) percent of the proceeds shall be applied to the accrued Option Consideration until paid in full. Should Optionee not extend the Option Period or upon default by Optionee under any loan obligation to Shepherd’s Finance, or upon three (3) years from the date hereof, whichever occurs first, all accrued and unpaid Option Consideration will be immediately due and paid in full.

6. Exercise of Option. Optionee may exercise the Option to purchase any of the Lots at any time during the Option Period or any extension of the Option Period by delivery to Optionor of a written notice of exercise on or before the date of expiration of the Option Period or any extension thereof. The notice may be delivered personally or may be sent by United States regular mail or by nationally recognized express courier service, addressed to Optionor at the following address:

339 Justabout Land Co.

Attn: Dan Wallach

13241 Bartram Park Blvd., Suite 2401

Jacksonville, FL 32258

and by electronic mail at the following address: danwallach@shepherdsfinance.com. The Option will be deemed exercised as of the date of the electronic mail.

7. Purchase Agreement. Within three (3) days following exercise of the Option by Optionee, Optionor and Optionee shall execute an agreement for purchase and sale of the lot or lots prepared by Optionee (hereinafter called the “Agreement for Sale”), which Agreement for Sale shall contain terms consistent with this Option Agreement, including, without limitation, the following terms:

a. Conveyance by Optionor to Optionee of good and marketable fee simple title to the Property and all appurtenances thereto by special warranty deed, free and clear from liens and encumbrances;

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b. Payment by Optionor and Optionee of applicable Pennsylvania Realty Transfer Taxes;

c. Closing of the purchase and sale of the Property shall be no later than sixty (60) days from the date of the Agreement for Sale, with time to be of the essence;

d. Proration, as of the date of closing, of county and township real property taxes on a calendar year basis and school real property taxes on a fiscal year basis;

e. Payment of the Option Price for the lot or lots in cash at closing, without condition for obtaining financing; and

f. Payment by Optionor of any amounts owed to Howard Hanna Realty and Sheldon Investments, LLC.

8. As a condition precedent to the effectiveness of the Option Agreement, Optionee shall enter into a certain Management Services Agreement with Optionor, upon terms and conditions acceptable to Optionor, in its sole discretion.

9. Binding Agreement. This Agreement shall be binding upon and shall inure to the benefit of the heirs, successors and assigns of Optionor and Optionee.

10. Entire Agreement. This writing contains the entire agreement between Optionor and Optionee with respect to its subject matter. No amendment or modification of this Agreement shall be effective and binding unless reduced to writing dated after the date of this Agreement and signed by both Optionor and Optionee, its successors and/or assigns.

11. Governing Law. This Agreement shall be enforced and interpreted in accordance with the laws of the Commonwealth of Pennsylvania.

IN WITNESS WHEREOF, Optionor and Optionee have executed this Agreement the day and year first above written.

Witness:		OPTIONOR:
		339 JUSTABOUT LAND CO.,
By:	/s/ Christine R Eckberg	By:	/s/ Daniel Wallach
Name:	Christine R Eckberg	Name:	Daniel Wallach
Title:	Individual	Title:	C.E.O

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STATE OF FLORIDA

COUNTY OF DUVAL

I HEREBY CERTIFY that on this 15 day of Feburary, 2024, before me, the undersigned Notary Public of the jurisdiction aforesaid, personally appeared Dan Wallach, and acknowledged themselves to be the CEO (title) of 339 Justabout Land Co., and that they, being authorized so to do, executed the foregoing instrument in the aforesaid capacity for the purposes therein contained.

IN WITNESS MY Hand and Notarial Seal.

	Rosemary A Pomar	(SEAL)
My Commission Expires:
12/16/2025

Witness:		OPTIONEE:
		BENJAMIN MARCUS HOMES, L.L.C
By:	/s/ Barrett Hoskins	By:	/s/ Mark L. Hoskins
Name:	Barrett Hoskins	Name:	Mark L. Hoskins
Title:	Member	Title:	Member

COMMONWEALTH OF PENNSYLVANIA

COUNTY OF Allegheny

I HEREBY CERTIFY that on this 15th day of February, 2024, before me, the undersigned Notary Public of the jurisdiction aforesaid, personally appeared Mark L. Hoskins, and acknowledged themselves to be the Member (title) of Benjamin Marcus Homes, L.L.C, and that they, being authorized so to do, executed the foregoing instrument in the aforesaid capacity for the purposes therein contained.

IN WITNESS MY Hand and Notarial Seal.

	Rachael Swick	(SEAL)
My Commission Expires:
April 27, 2027

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EXHIBIT “A”

TO OPTION AGREEMENT FOR

PURCHASE AND SALE OF REAL PROPERTY

DATED 2/15 , 2024

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EX-10.3

Exhibit 10.3

MANAGEMENT SERVICES AGREEMENT

THIS MANAGEMENT AND SUPPORT SERVICES AGREEMENT (the “Agreement”) is dated as of February 15, 2024 (the “Effective Date”) by and between BENJAMIN MARCUS HOMES, L.L.C (“Provider”), a Pennsylvania limited liability company, and 339 JUSTABOUT LAND CO., LLC (“Recipient”), a Pennsylvania limited liability company.

BACKGROUND

Recipient is the owner of a residential home development with sixty-one (61) lots (the “Lots”) under development and available for sale collectively, known as the Tuscany II and Newcastle Developments (the “Business”). Provider will employ and supply personnel and equipment as necessary to provide construction management, sales, and other services to Recipient (the “Management”).

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and promises herein contained, and intending to be legally bound hereby, the parties agree as follows:

1. Duties of Provider.

(a) Provider shall, during the term of this Agreement, provide certain employees, contractors and/or other personnel necessary for the Management of the Business.

(b) Provider shall have the sole authority and control with respect to the Management, but Recipient shall have the final authority respect to the sales of Lots after consultation with Provider, subject to the terms of the Option (as hereinafter defined).

(c) Provider shall provide Recipient with Management to the Business, including but not limited to:

(i)	Construction, development and sales of the Lots;
(ii)	Executive and general managerial services;
(iii)	Bookkeeping and Payables;
(iv)	Information technology;
(v)	General administrative services;
	Signing authority on behalf of Recipient for all contracts related to the Management for Mark Hoskins or Barrett Hoskins; provided, however, that Mark Hoskins shall neither have the authority to mortgage or lien assets of the Business, nor contract on behalf of Recipient with any entity or person related to Provider other than agreements for the sale of Lots;
(vi)	All other services necessary for Management and conduct of the Business.

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(d) Provider agrees to abide by any and all applicable rules and regulations of the federal government and the states in which it performs such services under this Agreement.

2. Fees and Expenses.

(a) A “Management Fee” shall be calculated in consideration of the services provided pursuant to Section 1 and said Management Fee shall be two-thirds (2/3) of the following formula:

(i)	Net proceeds received by Recipient for Lots sold, including Purchase Option (as hereinafter defined);
(ii)	Less the $3 million original purchase price paid for the Business by Shepherd’s Finance, LLC;
(iii)	Less total amount actually paid to Howard Hanna and Sheldon Investments including interest, (excluding amounts deducted at closing from the HUD-1);
(iv)	Less total due to Shepherd’s Finance by Provider under the Purchase Option (as hereinafter defined) on the Termination Date;
(v)	Less total spent by Recipient for development costs, taxes paid, utilities paid, and bonding costs, which costs relate to the operation of the Business;
(vi)	Less future amounts to be paid by Recipient after the Term of this Agreement;
(vii)	Less Cost of Funds charged to Recipient by Shepherd’s Finance on the daily GL Development Asset Balance;
(viii)	Plus recognized development profit; and
(ix)	Less fees earned by Recipient under the Purchase Option (as hereinafter defined).

(b) The Management Fee shall be deferred and not paid to the Provider until the Termination Date (as hereinafter defined) and only if all Lots are sold pursuant to the Purchase Option (as hereinafter defined).

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3. Purchase Option.

As a condition precedent to this Agreement, Provider will enter into a certain Option Agreement for Purchase and Sale of Real Property with Recipient (“Purchase Option”), setting forth the terms of an option for Provider to purchase certain of the Lots from Recipient, subject to the conditions thereof.

4. Term.

This is a three (3) year Agreement which shall terminate three (3) years from the date hereof (the “Termination Date”).

5. Indemnification.

(a) Provider shall be solely liable (and Recipient shall have no liability) for each and every action (or failure to act) of Provider, or its employees or contractors, performing services for Recipient pursuant to this Agreement unless that action or failure to act is due to the actions or inactions of the Recipient, its agents or third party contractors that are performing work at the direction of the Recipient. In such event, Provider shall indemnify, defend and hold harmless Recipient and its officers directors, employees, attorneys, and the heirs, successors and assigns of each of them (collectively, the “Recipient Indemnitees”) from and against, and will reimburse the Recipient Indemnitees for, any Damages arising directly from an any action taken (or failure to act) by Provider, its employees or contractors, when performing services for Recipient pursuant to this Agreement. The provisions of this Section 5 are a material inducement for Recipient to enter into this Agreement and Recipient would not enter into this Agreement but for the provisions of this Section 5.

(b) Recipient shall be solely liable (and Provider shall have no liability) for each and every action (or failure to act) of Recipient with respect to any aspect of the Business not being serviced and/or managed by Provider pursuant to this Agreement and for any claims or legal actions in anyway related to acts of Recipient, or members of Recipient, or debts occurred by any assets of the Business, which claims occurred or existed prior to the date of this Agreement (the “Recipient Actions”). Recipient shall indemnify, defend and hold harmless Provider and its officers, directors, employees, attorneys, and the heirs, successors and assigns of each of them (collectively, the “Provider Indemnitees”) from and against, and will reimburse the Provider Indemnitees for, any Damages arising directly from an any action taken (or failure to act) by Recipient with respect to Recipient Actions whether or not any such action (or failure to act) constitutes negligence or willful misconduct. The provisions of this Section 4 are a material inducement for Provider to enter into this Agreement and Provider would not enter into this Agreement but for the provisions of this Section 5.

(c) The provisions of this Section 5 shall survive the expiration or termination of this Agreement without limitation. As used herein, “Damages” means collectively, all claims, liabilities, obligations, losses, damages, deficiencies, assessments, encumbrances, judgments, penalties, fines, costs, and expenses (including, without limitation, reasonable attorneys’ fees and costs and expenses incurred in investigating, preparing, defending against or prosecuting any litigation or claim, action, suit, or other proceeding or demand).

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6. Debt and Business Decisions. Provider will neither make any decision which materially impacts the Business, nor incur any debt on behalf of the Recipient or secured by the assets of the Recipient without consultation with and written approval from Recipient.

7. No Assignment. Provider may only assign this Agreement, or any of its rights and privileges hereunder, to any other person, firm or corporation, with the express written consent of Recipient. Recipient may assign this Agreement to any subsequent purchaser of the Business.

8. Recipient Confidential Information.

(a) Provider acknowledges that, as between Provider and Recipient, Recipient will be the sole owner of all Recipient Confidential Information (defined below) and that Recipient agrees to disclose or grant Provider access to Recipient Confidential Information only under the terms and conditions contained herein and Provider’s development of all Recipient Confidential Information under this Agreement shall be owned or assigned to Recipient. Provider agrees to hold in confidence, now and in the future, any and all Recipient Confidential Information disclosed, developed or accessible to Provider under this Agreement, and to take all reasonable steps including, without limitation, those steps that Provider takes to protect its own information, data or other tangible or intangible property that it considers proprietary and confidential, and that is of similar value or importance to the Recipient Confidential Information, to ensure that the Recipient Confidential Information is not disclosed to any person. Provider may not disclose Recipient Confidential Information without prior written approval from Recipient.

(b) As used herein, the term “Recipient Confidential Information” shall mean, collectively, all technical, financial and business information or materials, of any kind whatsoever, including where appropriate, and without limitation: all data, compilations, specifications, strategies, projects, processes, techniques, formulae, know-how, models, and patents; and all tangible and intangible embodiments thereof of any kind whatsoever including, where appropriate and without limitation, all originals or copies of sales brochures, customer lists, customer contact information, supplier lists and contact information, and manufacturing protocols, records and data, product compositions, product tests, product development, machinery, apparatus, reports, and drawings of Recipient or any of its affiliates, customers, and prospects.

(c) Notwithstanding the foregoing, (i) Provider shall have the right to disclose Recipient Confidential Information to the extent required by applicable law or regulation, provided that Provider shall give Recipient reasonable written notice and sufficient opportunity to object to such use or disclosure, or to request confidential treatment of the Recipient Confidential Information; and (ii) the non-use and nondisclosure obligations of the Provider above shall not apply to such Recipient Confidential Information as the Provider can establish by written documentation to: (i) have been publicly known prior to disclosure by Recipient of such information to the Provider; or (ii) have become publicly known, without fault on the part of the Provider, subsequent to disclosure by Recipient of such information to the Provider.

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(d) Upon the termination or expiration of this Agreement, or upon Recipient’s request, the Provider shall return to Recipient all Recipient Confidential Information, including without limitation all copies, extracts and derivations thereof. To the extent reasonable financial information concerning the account giving rise to the Management Fee to confirm the determination of the Management Fee are deemed Recipient Confidential Information, Provider may retain a copy of such information for Provider’s archive and to preserve rights under this Agreement.

(e) No right or license to any patent, copyright, trade secret, Recipient Confidential Information, or any other intellectual property of Recipient is granted to the Provider by this Agreement, nor is Recipient obligated by this Agreement to grant the Provider any such right or license. Any invention(s) arising out of this Agreement, whether or not developed by Provider, shall be owned by or assigned to Recipient or its designee.

9. General.

(a) This Agreement shall be construed and governed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to its choice of law principles.

(b) This Agreement shall be binding upon, and inure to the benefit of, the parties, and their respective successors and assigns. Nothing in this Agreement, expressed or implied, is intended to confer on any person, other than the parties or their respective successors, any rights, remedies or liabilities.

(c) Provider and Recipient shall each maintain general liability and other insurance which provides for coverages and amounts of insurance which are commercially reasonable for services rendered under this Agreement.

(d) This Agreement contains the entire understanding of the parties, supersedes any prior agreements and understandings relating to this subject matter and may not be amended except in writing signed by both parties.

(e) This Agreement may be executed in multiple counterparts, each of which will be deemed an original, and all of which together will constitute one and the same instrument.

(f) No delay or omission by either party in exercising any right, power or privilege hereunder will impair such right, power or privilege, nor will any single or partial exercise of any such right, power or privilege preclude any further exercise thereof or the exercise of any other right, power or privilege.

(g) If any provision of this Agreement is held to be illegal, invalid or unenforceable, such provision will be fully severable and this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision never comprised a part hereof; and the remaining provisions will remain in full force and effect.

(h) The captions in this Agreement are for convenience of reference only and will not limit or otherwise affect any of the terms or provisions hereof.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.

BENJAMIN MARCUS HOMES, L.L.C
By:	/s/ Mark Hoskins
Name:	Mark Hoskins
Title:	Managing Member
339 JUSTABOUT LAND CO.,
By:	/s/ Daniel Wallach
Name:	Daniel Wallach
Title:	C.E.O

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XML

Cover	Feb. 15, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 15, 2024
Entity File Number	333-263759
Entity Registrant Name	Shepherd’s Finance, LLC
Entity Central Index Key	0001544190
Entity Tax Identification Number	36-4608739
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	13241 Bartram Park Blvd.
Entity Address, Address Line Two	Suite 2401
Entity Address, City or Town	Jacksonville
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	32258
City Area Code	(302)
Local Phone Number	752-2688
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	true
Entity Information, Former Legal or Registered Name	None.