ex10-1.htm


    Exhibit
10.1

    


    


    MASTER
LOAN PARTICIPATION PURCHASE AND SALE AGREEMENT

    (NON-RECOURSE)

    


    


    This
MASTER LOAN PARTICIPATION PURCHASE AND SALE AGREEMENT (NON-RECOURSE) (the
“Agreement”) dated and effective as of May 1, 2009, is between
MINISTRY PARTNERS INVESTMENT COMPANY, LLC (the “Seller”), a California limited
liability company, and WESTERN FEDERAL CREDIT UNION (the “Buyer”), a federal
credit union.

    


    WHEREAS, Seller and Buyer desire to
enter into this Agreement wherein Seller may sell to Buyer and Buyer may buy
from Seller certain loan participations (the “Loan Participations”) on a
non-recourse basis from time to time pursuant to the terms and conditions set
forth herein;

    


    WHEREAS the Loan Participations sold
and purchased under this Agreement may be Loan Participations in Seller’s
portfolio or Loan Participations that will be closed by the Seller in the
future;

    


    NOW, THEREFORE, in consideration of the
mutual agreements herein set forth, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Seller and the Buyer, intending to be legally bound, agree as
follows:

    


    I.           PURCHASE
AND SALE OF LOAN PARTICIPATIONS

    


    A.           Purchase and Sale of Loan
Participations After Execution of this Agreement.

    


    1.           Subject
to the terms and conditions of this Agreement, as of the purchase date for each
Loan Participation, Seller hereby sells, assigns, transfers and conveys to
Buyer, without recourse, and Buyer hereby purchases from Seller as of the
purchase date, all right, title and interest of Seller in and to the
following:

    


    
      	
              (a)

            	
              the
      Loan Participations described in the Loan Participation Purchase
      Certificates to be issued in accordance with
      Section I.B.1.;

               

            
	
              (b)

            	
              the
      collateral pledged to secure the Loan Participations;

               

            
	
              (c)

            	
              all
      right, title and interest of Seller in, to and under any lien securing the
      payment owing under such Loan Participations;

               

            
	
              (d)

            	
              all
      documents evidencing the terms and agreements of the respective Loan
      Participations sold under this Agreement, documents evidencing a security
      interest for such Loan Participations and documents pertaining to the loan
      underwriting (collectively, “Loan Documents”). Loan Documents include
      copies of the promissory note and the documentation required to comply
      with any agreed underwriting standards between Buyer and Seller (e.g.,
      loan application and verifications, financial statements, security
      instrument, appraisals, etc.).  Loan Documents also include the
      documents used and relied upon to underwrite the respective Loan
      Participations;

               

            
	
              (e)

            	
              all
      insurance policies and any related insurance proceeds with respect to such
      Loan Participations, all actions and causes of action associated with the
      Loan Participations;

               

            
	
              (f)

            	
              all
      income and proceeds of the foregoing (less any servicing fees);
      and

               

            
	
              (g)

            	
              any
      escrow account related to such Loan Participations and all amounts from
      time to time credited to and the proceeds of such
  account.

            


    

     

    
 

    
      
        
        

      

      
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    2.           It
is the intention of the parties that each Loan Participation sold pursuant to
this Agreement constitutes a complete sale and assignment of all of the Seller’s
right, title and interest in, to and under, the Loan Participation to the Buyer
and that the sold Loan Participations will not be a part of the Seller’s estate
in the event of any liquidation, reorganization or similar insolvency proceeding
with respect to the Seller.  Loan Participations sold pursuant to this
Agreement are sold on a non-recourse basis.  The parties agree and
acknowledge that the sale of the Loan Participations on a non-recourse basis
shall constitute a sale of the Seller’s ownership interest in the loan and Loan
Documents and shall in no way be construed as an extension of credit by the
Buyer to Seller.  Seller will reflect that the purchase of Loan
Participations under this Agreement will be treated on its financial statements
as a purchase of assets by Buyer and sale of assets by Seller.

    


    3.           By
entering into this Agreement, the parties are not obligating themselves to
either sell or purchase any Loan Participation.  Unless a party
specifically obligates itself to the other party by executing the Loan
Participation Purchase Certificate, a copy of which is attached hereto as
Exhibit “A”, a party may defer the decision whether to purchase a Loan
Participation until the specific loan is presented by the Seller.

    


    4.           The
parties hereto agree that the parties to this Agreement shall be limited to
state and federally chartered credit unions, credit union service organizations
and federally insured institutions.  Except as otherwise agreed by the
parties, Buyer and Seller further acknowledge that the borrower under any Loan
Documents for any Loan Participations purchased under this Agreement shall be a
credit union member of either Buyer or Servicer (as hereinafter
defined).  Each party represents and covenants that any sale of Loan
Participations under this Agreement shall be subject to and made in
accordance  with applicable rules and regulations imposed under the
National Credit Union Act, including NCUA Regulation 701.22.

    


    5.           Upon
Buyer’s payment of the purchase price for any Loan Participations acquired under
this Agreement, Buyer shall immediately become vested, to the extent of its Loan
Participations interest, with beneficial ownership of its pro rata share of such
loan.  Buyer shall be deemed to be the holder of the equitable title
to its pro rata share in each loan that is acquired under this
Agreement.

    


    B.           Purchase Documents; Purchase
Date.

    


    1.           Each
Loan Participation sold under this Agreement shall be evidenced by a Loan
Participation Purchase Certificate executed by both the Buyer and
Seller.  The Loan Participation Purchase Certificate shall be
substantially in the form of Exhibit “A” attached hereto and shall identify the
Loan Participation, the identity of the borrower, and the purchase date, and set
forth all the economic terms of the Loan Participation purchase negotiated
between the Seller and Buyer, including the price Buyer will pay for each
participation interest.  To the extent there are any inconsistencies
between this Agreement and the Loan Participation Purchase Certificate which
cannot be reasonably reconciled, the terms of the Loan Participation Purchase
Certificate shall control.

    


    2.           Within
two (2) business days of Buyer executing the Loan Participation Purchase
Certificate and tendering all funds to purchase the Loan Participation, Seller
will countersign and deliver the Loan Participation Purchase Certificate to
Buyer.

    


    3.           Seller
agrees, at its own expense, on the purchase date to indicate in its books and
records that the Loan Participations have been sold to the Buyer.

    


    4.           A
Loan Participation shall be deemed delivered to Buyer upon receipt of the
countersigned Loan Participation Purchase Certificate from Seller.

    


    
      
        
        

      

      
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    II.           SELLER’S
OBLIGATIONS, REPRESENTATIONS AND WARRANTIES

    


    A.           Representations Regarding
Loans.

    


    Seller
represents and warrants to Buyer as to each Loan Participation sold under this
Agreement that as of the date of Buyer’s purchase of each loan identified in a
Loan Participation Purchase Certificate (each a “Loan“):

    


    1.           To
Seller’s knowledge, the Loan Documents have been duly executed by the borrower
and trustor/mortgagor, acknowledged and recorded; each Loan is valid, the Loan
Documents constitute the entire agreement between the borrower and
trustor/mortgagor and the beneficiary mortgagee, and there is no verbal
understanding, waiver, alteration, modification which would affect the terms of
the Loan Documents except by written instrument delivered and expressly made
known to the Buyer and recorded if recording is necessary to protect the
interests of the Buyer.  The substance of any such waiver, alteration,
or modification has been approved by the title insurer, to the extent required
by the policy, and its terms are reflected on the Loan Purchase
Certificate.  With respect to the Loan Documents, no obligor has been
released by the Seller, or to the best of the Seller’s knowledge, by anyone
else, in whole or in part.

    


    2.           Seller
is the sole owner of the Loan Participation and has authority to sell, transfer
and assign the same on the terms set forth herein and in the Loan Participation
Agreement.  There has been no assignment, sale or hypothecation
thereof by Seller, except the usual hypothecation of the documents in connection
with Seller’s normal banking transactions in the conduct of its
business.

    


    3.           The
unpaid principal balance of the Loan Participation is as represented by
Seller.  All costs, fees and expenses incurred in making, closing and
recording the Loan have been paid.  No part of the mortgaged property
has been released from the lien of the Loan, the terms of the Loan have in no
way been changed or modified, and the Loan is current and not in
default.

    


    4.           The
Loan Participations are intended to be made or have been made in compliance with
all applicable federal and state laws, rules and regulations.

    


    5.           No
Loan is the subject of, and Seller is not aware of any facts which could give
rise to litigation which could affect Buyer’s ability to enforce the terms of
the obligation or its rights under the mortgage documents.

    


    6.           There
is in force for each Loan a paid-up title insurance policy on the Loan in an
amount at least equal to the outstanding principal balance of the
Loan.

    


    7.           The
mortgage, deed of trust, or lien securing the Loan has not been satisfied,
canceled, subordinated or rescinded, in whole or in part, and the collateral has
not been released by Seller or, to the best of Seller’s knowledge, by anyone
else, nor has any instrument executed by Seller or, to the best of Seller’s
knowledge, by anyone else, that would effect any such release, cancellation,
subordination or rescission.

    


    8.           The
borrower has no rights of rescission, set-offs, counter-claims or defenses to
the note or deed of trust/mortgage securing the note of arising from the acts
and/or omissions of Seller.

    


    
      
        
        

      

      
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    9.           Seller
has no knowledge that any improvement located on or being part of the mortgaged
property is in violation of any applicable zoning law or
regulation.

    


    10.           To
Seller’s knowledge, there is no proceeding pending for total or partial
condemnation of any mortgaged property and said property is free of substantial
damage (including, but not limited to, any damage by fire, earthquake,
windstorm, vandalism or other casualty) and in good repair.

    


    11.           Seller
shall not take any action inconsistent with the ownership interest of the Buyer
or its assignee and any subsequent assignee or pledgee in the Loan
Participations.

    


    12.           To
the best of Seller’s knowledge, there is no breach, violation or event of
acceleration existing under the Loan and no event which, with the passage of
time or with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of
acceleration.  Seller has not waived any default, breach, violation or
event of acceleration.

    


    13.           There
is in force for each Loan, valid hazard insurance policy coverage for any
improved real property serving as collateral and, where applicable, valid flood
insurance policy coverage.

    


    14.           Each
Loan originated by Seller complied in all material respects with Seller’s
underwriting guidelines in effect at the time the Loan was originated, subject
to exceptions made from time-to-time as permitted by Seller’s underwriting
guidelines and policies or as otherwise approved by Buyer.

    


    15.           In
the event the mortgage securing the Loan constitutes a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the mortgage, and no fees or
expenses are or will become payable by the Buyer to the trustee under the deed
of trust, except in connection with a trustee’s sale after default.

    


    16.           Seller
has no knowledge of any violation of any local, state, or federal environmental
law, rule, or regulation arising from toxic or hazardous substances affecting
the real property collateral securing the Loans.  Seller has no
knowledge of any pending action or proceeding directly involving any real
property collateral in which compliance with any environmental law, rule, or
regulation is an issue.

    


    B.           Representations Regarding
Seller.

    


    Seller
represents and warrants to Buyer that as of the date first set forth above and
as of the date of Buyer’s purchase of each Loan Participation
hereunder:

    


    1.           Seller
is duly organized, validly existing and in good standing under the laws of the
state of its organization and is qualified and/or licensed as necessary to
transact business, including the originating and selling of mortgage Loan
Participations.

    


    2.           Seller
has the full power and authority to hold and sell each Loan; and neither the
execution and delivery of this Agreement, nor the acquisition or origination of
the Loan Participations, nor the sale of the Loan Participations, nor the
consummation of the transactions contemplated herein, nor the fulfillment of or
compliance with the terms and conditions of this Agreement will conflict with,
or result in a breach of any term, condition or provision of, Seller’s
certificate of organization or operating agreement, any license held by Seller
or governing Seller’s activities or any agreement to which Seller is a party or
by which Seller is bound, or constitute a material default or result in an
acceleration under any of the foregoing.

    


    
      
        
        

      

      
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    3.           No
consent, approval, authorization or order of any court, governmental body or any
other person or entity is required for the execution, delivery and performance
by Seller of this Agreement, including but not limited to, the sale of the Loan
Participations to Buyer, except for the approval of the Seller as required under
the Loan Participation Agreement.

    


    4.           Neither
Seller nor its agents know of any suit, action, arbitration or legal or
administrative or other proceeding pending or threatened against Seller which
would affect its ability to perform its obligations under this
Agreement.

    


    5.           Seller
is not a party to, bound by or in breach or violation of any agreement or
instrument, or subject to or in violation of any statute, order or regulation of
any court, regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects, or may in the
future materially and adversely affect, the ability of Seller to perform its
obligations under this Agreement.

    


    C.           Breach of Seller’s
Representations and Warranties.

    


    1.           Upon
discovery by the Buyer of a material breach of any of the representations or
warranties set forth in II.A. and B. above, Buyer shall give prompt written
notice to Seller no later than two (2) business days after such
discovery.  Within five (5) business days of its receipt of such
notice of such material breach, the Seller shall be obligated to either (a) cure
such breach; (b) purchase such Loan Participation from the Buyer at the
applicable “Repurchase Amount”, as that term is defined in subsection 2
below, or (c) purchase such Loan Participation from Buyer in exchange for one or
more substitute Loan Participations.  Nothing in this paragraph shall
be construed to give the Seller any right, title or interest in and to any Loan
Participation after the related purchase date or to require Seller to repurchase
any Loan Participation due to the lack of future performance, decline in value
or as a result of the related borrower’s insolvency, credit loss or general
inability to pay.  The Seller hereby confirms and agrees that, with
respect to a Loan Participation, from and after its purchase date, the Seller
has no right, title or interest in such Loan and has no authority with respect
to the collection, amendment, modification, adjustment, extension or
cancellation of such Loan Participation, except to the extent of its capacity as
Seller, as such term is defined in the Loan Participation
Agreement.

    


    2.           For
purposes of Section II.C. of this Agreement, the term “Repurchase Amount” shall
mean an amount equal to the outstanding balance of such Loan Participation as of
the date of such repurchase.  Except in the event of a good faith
dispute, the Repurchase Amount for any Loan Participation which is to be
purchased by the Seller pursuant to Section II.C. shall be remitted by the
Seller in immediately available funds to Buyer no later than two (2) business
days following the date on which such obligation arises.  Upon
receipt, the Loan Participation shall be released to the Seller and the Buyer
shall execute such documents and instruments of transfer or assignment as shall
be reasonably requested by the Seller to effect the conveyance from the Buyer to
the Seller.

    


    3.           This
Section II.C. provides the sole remedies to Buyer, its successors and permitted
assigns in respect of any deficiencies with respect to any breach of the
warranties and representations set forth in Section II.A. and B.  If
the Seller defaults in its obligations set forth in Sections II.C.1. and
II.C.2., or disputes its obligations, the Buyer (including, without limitation,
its successors and permitted assigns) may take such action as is appropriate to
enforce such payment or performance, including, without limitation, the
institution and prosecution of appropriate proceedings.

    


    
      
        
        

      

      
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    D.           Notice
Obligations.

    


    1.           Seller
agrees to furnish written notice to Buyer within three (3) business days in the
event that it learns or has any knowledge of the occurrence of an event of
default under the Loan Documents that remains uncured after the giving of any
notice, if required under the Loan Documents, or within three (3) business days
after the expiration of any period in which borrower is required to cure such
default.

    


    2.           In
addition, Seller represents and warrants that after the execution of this
Agreement, it shall immediately notify Buyer should Seller learn or have any
knowledge of the following:

    


    
      	
              (a)

            	
              Any
      change in the financial condition of the borrower, or of any co-maker,
      guarantor or endorser under the Loan, which may have a material adverse
      affect upon continuation of payments under the Loan or the Loan's ultimate
      collectability;

            
	
               
      

            	 
      
	
              (b)

            	
              Any
      material change in the value of collateral securing the
    Loan;

            
	 
      	 
      
	
              (c)

            	
              Any
      change in the lien status as affecting the secured
    collateral;

            
	 
      	 
      
	
              (d)

            	
              Any
      request by the borrower, or by any co-maker, guarantor or endorser under
      the Loan, for any change in the terms and conditions of the Loan, or in
      the terms of any note or notes evidencing the Loan, or in any security
      agreement or instrument securing the Loan;

            
	 
      	 
      
	
              (e)

            	
              Any
      request by the borrower, or by any co-maker, guarantor or surety under the
      Loan for the release, substitution or exchange of any collateral securing
      the Loan differing from any release provisions of the Loan
      Agreement;

            
	 
      	 
      
	
              (f)

            	
              Any
      request of the borrower, or by any co-maker, guarantor or endorser under
      the Loan, for the release of any personal obligations of any such party
      under the Loan;

            
	 
      	 
      
	
              (g)

            	
              Any
      request by the Seller for any change in terms and conditions of the Loan,
      or in the terms of any note or notes evidencing the Loan, or in any
      security agreement or instrument securing the Loan;

            
	 
      	 
      
	
              (h)

            	
              Any
      request by the Seller for an increase in and/or substitution or exchange
      of collateral securing the Loan;

            
	 
      	 
      
	
              (i)

            	
              Any
      failure by the borrower to pay principal payments under the Loan when due;
      and/or interest payments more than 15 days past due; or

            
	 
      	 
      
	
              (j)

            	
              The
      occurrence of any other event, which with the passage of time and/or
      failure to cure, would constitute an event of default under the Loan, or
      under any note or notes evidencing the Loan, or under any security
      agreement or instrument securing the Loan.

            
	 
      	 
      


    

    3.           Seller
will notify the borrower and all co-makers, guarantors and endorsers under the
Loan of the sale of a participation interest in the Loan by the
Seller.

    


    
      
        
        

      

      
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    III.           BUYER’S
OBLIGATIONS, REPRESENTATIONS AND WARRANTIES

    


    A.           Buyer
warrants and represents that Buyer has reviewed or has had the opportunity to
review the Loan Documents and has made or has had the opportunity to make
independent investigation into and determination of the borrower’s financial
condition and creditworthiness and the value and lien status of the collateral
securing the Loan, and that Buyer’s decision to purchase any Loan Participation
upon the terms and conditions set forth herein is based upon such independent
investigation and determination or upon such opportunity to conduct such
independent investigation and determination.

    


    B.           Buyer
acknowledges that Seller has made no representation or warranty of any kind,
whether expressed or implied, with respect to the validity, collectability, or
enforceability of the Loan, the financial condition of the borrower, or the
validity and enforceability of the Loan Documents except as expressly set forth
in this Agreement and the documentation provided to Buyer. Buyer has based its
decision to purchase the Loan Participations upon the Buyer’s own independent
evaluation of the Loan Documents provided by Seller and Seller’s representations
and warranties expressly set forth herein.

    


    IV.           AGENT
FOR SERVICING AND COLLECTING

    


    A.           Appointment of Servicer;
Termination.

    


    Seller
has entered into a Servicing Agreement with an agent, as designated in Exhibit
“B” hereto, pursuant to which such entity will act as the disclosed agent of
Buyer in connection with the receipt and collection of payments made under the
Loan Documents for Loan Participations that have been purchased under this
Agreement and as the Buyer’s agent in servicing such loans
(“Servicer”).  Servicer shall exercise the same degree of care,
diligence and discretion in servicing the Loan Participations and Loan Documents
and in collecting payments thereunder, as Servicer would ordinarily take in
servicing loans and in collecting payments solely for its own
account.  The accounting cutoff date for all payments shall be the
date described in the Loan Participation Purchase Certificate or as mutually
agreed upon by Seller and Buyer.

    


    B.           Duties of
Servicer.

    


    1.           While
Seller will continue to hold legal title to the Loans pursuant  to
which Loan Participations will be purchased under this Agreement, Servicer shall
retain the physical possession of the Loan Documents.  Seller and
Servicer will keep all such documents in files (which may include electronic
media) appropriately marked to show that a Loan Participation has been sold and
all files pertaining to such documents shall be so marked.

    


    2.           Servicer
shall have and may exercise such powers under this Agreement as are specifically
delegated to the Servicer by the terms of this Agreement, together with such
other powers as are reasonably incidental thereto.  To the fullest
extent possible, Servicer, acting as fiduciary to the Buyer, will keep all Loan
Documents and Loan proceeds separate and segregated from its assets and records
which are not subject to this Agreement. Seller shall immediately forward the
original Loan Documents (including without limitation, the original of the
borrower's note or notes evidencing the Loan and all security agreements and
instruments therefor), together with all such other documents, files and records
of the Seller that relate to the Loan, to the Servicer.  Seller
further agrees to turn over any collateral in its possession to the
Servicer.

    


    3.           Servicer
shall have the exclusive right to collect all payments of the principal or
interest on the note, any loan fee, commitment fee or other fees due under the
terms of the Loan Agreement, if applicable, and the proceeds of any insurance
related to the real property described in the Deed of Trust and any improvements
constructed or to be constructed thereon, including without limitation, builders
risk insurance and performance bonds, where applicable.  Such payments
and other amounts obtained by the Servicer under the Loan shall be held in
trust, with the Servicer as trustee, for the benefit of Buyer.  Such
funds shall be promptly accounted for and paid over to Buyer according to
Buyer's proportionate share of all such collections as described in this
Section.  For the purpose of this Section, "proportionate share" as to
Buyer shall be determined according to Buyer's undivided participation interest
in the Loan at the time of the receipt of payment or the occurrence of any other
event in question.  The exception is the disbursement of any late fees
collected.  As Servicer incurs the expense of most collection efforts,
late fees will be retained by the Servicer and will not be disbursed to the
Buyer.

    


    
      
        
        

      

      
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    4.           Any
sums obtained by the Seller or Buyer through right of counterclaim, setoff, or
banker's lien shall promptly be remitted to Servicer, without reduction or
withholding, and Servicer shall account for and pay over to Buyer its
proportionate share of such sums.

    


    5.           Servicer
shall have no duties or responsibilities except those expressly set forth in
this Agreement and those duties and liabilities shall be subject to the
limitations and qualifications set forth herein.  The duties of the
Servicer shall be mechanical and administrative in nature.  Buyer
acknowledges that Servicer in the performance of its duties and obligations
hereunder shall be obligated to exercise that degree of ordinary and reasonable
care which Servicer would exercise in the conduct and management of the Loan
solely for its own account.

    


    6.           Any
party, or party’s representative or regulator, including, but not limited to the
National Credit Union Administration (“NCUA“) and its examiners or supervisory
agents, has the right at any reasonable time during normal business hours to
request and have access to and examine any and all books, records and documents
relating to any loan in which the party has a participation interest or relating
to any of the matters covered by this Agreement.

    


    7.           Servicer
shall be entitled to act upon, and shall be fully protected in acting upon, any
telegram, telex, teletype, bank wire, cable or any writing, application, notice,
report, statement, certificate, resolution, request, order, consent, letter or
other instrument or paper or communication believed by the Servicer in good
faith to be genuine and correct and to have been signed or sent or made by a
proper person or persons or entity.  The Servicer may consult counsel
and shall be entitled to act, and shall be fully protected in any action taken
in good faith, in accordance with advice given by counsel.  The
Servicer may employ agents and attorneys-in-fact and shall not be liable for the
default or misconduct of any such agents or attorneys-in-fact selected by the
Servicer with reasonable care.

    


    C.           Servicer
Compensation.

    


    1.           To
the extent borrower does not reimburse and save harmless the Servicer for and
from all costs, expenses and disbursements incurred by Servicer in carrying out
its duties under this Agreement, such costs, expenses and disbursements shall be
borne by Buyer in an amount  proportionate to the undivided
participation interests of Buyer in the Loan Participations, and the Buyer and
Seller agree on such basis (i) to reimburse Servicer for all such costs,
expenses and disbursements on request and (ii) to indemnify and save
harmless the Servicer against and from any and all losses, obligations,
penalties, actions, judgments and suits and other costs, expenses and
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against the Servicer other than as a consequence of actual gross
negligence or willful misconduct on the part of the Servicer arising out of or
in connection with this Agreement, including without limitation the costs,
expenses and disbursement in connection with defending itself against any claim
or liability, or answering any subpoena, related to the exercise or performance
of any of its powers or duties under this Agreement, or the taking of any action
under or in connection with this Agreement or the Loan Documents.

    


    
      
        
        

      

      
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    2.           Unless
otherwise agreed to by the parties hereto, Servicer’s compensation for its
services as such with respect to servicing of the Loan shall be an amount based
upon interest accrued on the Loan from time to time computed on the basis of the
difference between the initial gross interest rate and the Buyer’s initial
interest rate applied to the outstanding principal balance of the Loan for the
period of time such principal was outstanding.  In the event that
Servicer fees are not based upon the initial interest rate yield for a Loan, the
amount of the servicing fee may be established in the Loan Participation
Purchase Certificate as separately agreed to by Seller, Buyer and
Servicer.

    


    D.           Notice Obligations of
Servicer.

    


    1.           Buyer
acknowledges that the indirect relationship between borrower and the Buyer makes
it difficult for the Buyer to assess the quality of the Loan without ongoing
information from the Servicer.  Therefore, Servicer has agreed to
permit Buyer reasonable access to the records of account of the
Loan.  Furthermore, Servicer has agreed to provide available credit
information on the borrower to the Buyer on a continuing basis.  The
transfer of such credit information by Servicer shall be a full and timely
transmittal of all financial and non-financial information bearing on the
quality of the Loan, which information may be furnished by borrower from time to
time under the Loan Agreement, if applicable, and which information to Buyer
from Servicer shall ordinarily include, when applicable, but not be limited
to:

    


    
      	
              (a)

            	
              Current
      financial statement of the borrower as well as of all co-makers,
      guarantors and endorsers under the Loan;

            
	 
      	 
      
	
              (b)

            	
              Any
      officer's certificates, financial and other statements and information
      submitted by the borrower to the Servicer in connection with the
      Loan;

            
	 
      	 
      
	
              (c)

            	
              The
      records of the Servicer reflecting the amounts and dates of receipt of
      principal and interest payments under the Loan;

            
	 
      	 
      
	
              (d)

            	
              Any
      information and/or documents in possession of the Servicer applicable to
      the existence, value and lien status of collateral securing the Loan or
      continuing credit worthiness of borrower; and

            
	 
      	 
      
	
              (e)

            	
              Any
      reviews or reports concerning the Loan issued by a regulatory agency or
      audit entity.

            


    

     

     

    
 

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    2.           The
Servicer has agreed that it will not, without the prior consent and concurrence
of the Buyer:

    


    
      	
              (a)

            	
              Make
      or consent to any amendments in the terms and conditions of the Loan, Loan
      Agreement, or in the terms of the note or notes evidencing the Loan, or in
      any security agreement or instrument securing the Loan;

            
	 
      	 
      
	
              (b)

            	
              Waive
      or release any claim against any borrower and/or against any co-maker,
      guarantor or endorser under the Loan;

            
	 
      	 
      
	
              (c)

            	
              Make
      or consent to any substitution, release or exchange of
      collateral;

            
	 
      	 
      
	
              (d)

            	
              Accelerate
      payment under the Loan and/or under any note or notes evidencing the
      Loan;

            
	 
      	 
      
	
              (e)

            	
              Commence
      any type of legal proceeding against the borrower and/or against any
      co-maker, guarantor or endorser under the Loan;

            
	 
      	 
      
	
              (f)

            	
              Seize,
      sell, transfer, assign, foreclose or attempt to exercise against any
      collateral securing the Loan; and/or

            
	 
      	 
      
	
              (g)

            	
              Exercise
      any right of setoff against borrower's deposit
  accounts.

            


    

    


    3.           Servicer
represents and warrants that after the execution of this Agreement, it shall
immediately notify Buyer should Lender learn or have any knowledge of any of the
matters set forth in Section IV.D.2. above.

    


    E.           Termination of
Servicer.

    


    1.           Servicer
may be removed and a new Servicer substituted by Buyer if:

    


    
      	
              (a)

            	
              Servicer
      should fail to perform or observe any term or condition of this Agreement,
      and such failure should continue for more than five (5) days after written
      notice from Buyer to Servicer of the existence and character of such
      breach;

            
	 
      	 
      
	
              (b)

            	
              There
      should be an appointment of any receiver or trustee for all or a
      substantial portion of the assets of the Servicer;

            
	 
      	 
      
	
              (c)

            	
              Servicer
      becomes insolvent or is unable to pay its debts as they become
      due;

            
	 
      	 
      
	
              (d)

            	
              Any
      governmental regulatory agency, either state or federal, take or institute
      any action to issue an order which would have a materially adverse effect
      on Servicer's operations or ability to perform under this Agreement;
      or

               

            
	
              (e)

            	
              If
      Servicer, without the consent of Buyer, proceeds with any action listed in
      Section IV.D.2. of this Agreement.

            


    

    


    Should
any one or more of the events described above occur, then the Servicer shall
immediately, without any grace period, be terminated and the Buyer shall
designate a successor Servicer.

    


    The
substituted Servicer shall be required to become a party to the
Agreement.  The parties hereto agree that Buyer may appoint itself to
serve as the substituted Servicer.  The original Servicer and all
parties to this Agreement shall cooperate with the substitute Servicer in the
transfer of the servicing duties, including executing appropriate documents
appointing the new Servicer.

    


    2.           Upon
the occurrence of the termination of its appointment, the original Servicer
shall  be required to irrevocably constitute and appoint the successor
Servicer its true and lawful attorney-in-fact, with full power of delegation,
substitution and assignment, and with full and irrevocable power and authority
in its place and stead, and in borrower's name, or in the name of original
Servicer, or otherwise, to execute and deliver on behalf of original Servicer,
and to file or record such instruments and documents, with or without the
signature of original Servicer, as the successor agent, at its option, may deem
appropriate, and to perform all other acts which the successor Servicer may deem
appropriate to protect and preserve the rights of all the parties under this
Agreement, and the Loan Documents.

    


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    3.           Upon
termination of the Servicer, Buyer shall have the right to immediately notify
the borrower, directing the borrower to forward principal and interest payments
under the Loan directly to the successor Servicer in sufficient amounts to
satisfy the Buyer’s then percentage ownership interest in the Loan.

    


    4.           In
the event of the termination of Servicer, Seller shall have the right, at its
sole and exclusive option, to repurchase Buyer’s undivided participation
interest in any Loan or any Loan Participation interest sold under this
Agreement by giving written notice thereof to Buyer within ten (10) business
days after Buyer elects to terminate the Servicer.  The purchaser
price paid shall be equal to the Buyer’s undivided interest in the principal,
plus accrued interest, as then outstanding, through the date of
repurchase.

    


    V.           BORROWER
DEFAULT

    


    
      	 
      	
              A.

            	
              Upon
      the occurrence of any event of default under the Loan, Seller, Buyer and
      Servicer shall consult among themselves as to a mutually agreed upon
      course of action to pursue in order to collect the amounts then owed under
      the Loan.

            
	 
      	 
      	 
      
	 
      	
              B.

            	
              If
      the Seller, Buyer and Servicer fail for any reason to take such mutually
      agreed upon action or actions, Buyer may elect to purchase the then
      outstanding undivided interests held in the Loan upon payment of an amount
      equal to its then outstanding ownership interest in the
      Loan.  In order to exercise this purchase option, Buyer must own
      at least a 50% undivided interest in the Loan.

            
	 
      	 
      	 
      
	 
      	
              C.

            	
              If
      the Seller, Buyer and Servicer fail for any reason to agree upon a
      desirable course of action to address the borrower’s default, Seller shall
      be entitled to exercise its rights to purchase buyer’s undivided interest
      in the Loan, as more particularly described in Section V.H.
      below.

            
	 
      	 
      	 
      
	 
      	
              D.

            	
              In
      the event that Buyer elects to purchase all outstanding undivided
      interests in the Loan and Servicer does not own a Loan Participation
      interest, Servicer shall immediately forward the original Loan Documents
      (including without limitation, the original of the borrower's note or
      notes evidencing the Loan and all security agreements and instruments
      therefor), together with such other documents, files and records as may be
      necessary to permit the purchasing party to institute appropriate
      collection and/or foreclosure proceedings under the Loan and/or against
      the collateral securing the Loan, to the party designated by the
      purchasing party as the successor Servicer.  Servicer further
      agrees to turn over any collateral in its possession to the purchasing
      party.  Servicer further agrees to execute such additional
      documents in favor of the purchasing party as may be deemed to be
      necessary and proper by the purchasing party and/or their counsel to
      permit the purchasing party to foreclose against any and all collateral
      securing the Loan under applicable state law and
      procedures.  Servicer agrees to join with the purchasing party
      in giving notice of the sale of the Servicer's and/or other participants'
      undivided interest in the Loan to the borrower and all co-makers,
      guarantors and/or endorsers on the Loan.

            
	 
      	 
      	 
      
	 
      	
              E.

            	
              Upon
      the exercise of such right of purchase by a party to this Agreement, the
      terms and conditions of this Agreement shall remain in full force and
      effect.  References to Servicer and participants shall be
      interpreted in accordance with the specified intent of the purchasing
      party as shall be specified in any amendment to this
      Agreement.

            
	 
      	 
      	 
      
	 
      	
              F.

            	
              If
      neither action described in Section V.B. or C. above occurs within sixty
      (60) days of an event of default,
then:

            


    

     

    
 

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    1.           Either
the Servicer, the Seller, if the Seller is not also the Servicer,
or  Buyer may then elect, upon written notice to the other parties, to
accelerate payment under the Loan and/or under any note or notes evidencing the
Loan, and to institute such legal proceedings as are necessary and appropriate,
within the sole opinion of the instituting party, to collect the indebtedness
then due under the Loan, to enforce the security therefor, and to protect and
preserve the respective rights and interest of the parties.  To that
end, the party instituting such proceedings shall make Seller, Buyer and any
other participant a party to such action and each party shall bear the costs and
expenses of such proceedings in proportion to their respective undivided
interest in the Loan existing at the time of default.

    


    2.           In
the event that Buyer elects to accelerate payments of the Loan and to institute
legal proceedings as provided in subsection 1. above, or upon the Servicer's
failure, insolvency and/or closing:

    


    
      	
              (a)

            	
              Servicer
      unconditionally agrees to immediately forward the original Loan Documents
      (including, without limitation, the original of the borrower's note or
      notes evidencing the Loan and all security agreements and instruments
      therefor), together with all such other documents, files and records as
      may be necessary to Buyer to permit appropriate collection and/or
      foreclosure proceedings under the Loan and/or against the collateral
      securing the Loan.

            
	 
      	 
      
	
              (b)

            	
              Servicer
      shall further turn over any secured collateral in its possession as
      directed by the Buyer.

            
	 
      	 
      
	
              (c)

            	
              Seller
      additionally agrees to join in any demand letter or other communications
      forwarded by the Buyer to the borrower and/or to any co-makers, guarantors
      or endorsers under the Loan.

            
	 
      	 
      
	
              (d)

            	
              Servicer
      further agrees to execute such additional documents in favor of the Buyer
      as may be deemed to be necessary and proper by the Buyer and counsel to
      permit the Buyer to foreclose against any and all collateral securing the
      Loan under applicable state law
procedures.

            


    

    


    G.           If
none of the actions described in Paragraphs 1 or 2 above has occurred within
ninety (90) days of an event of default, then the dispute shall be settled by
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association.  All parties agree to be bound by the
decision of the arbitrator(s), and judgment upon the award rendered by the
arbitrator(s) may be entered in any Court having jurisdiction
thereof.

    


    H.           In
the event of default of borrower and/or termination of Servicer, Seller shall
have the right, at its sole and exclusive option, to repurchase Buyer’s
undivided interest in the Loan at any time by giving written notice thereof to
Buyer.  The purchase price shall be equal to the Buyer's undivided
interest in the principal, plus accrued interest, as then outstanding, through
the date of repurchase.

    


    Nothing
under this Section H. shall, however, be construed as obligating the Seller to
repurchase the Buyer's undivided interest in the Loan, and nothing hereunder
shall be construed as granting the Buyer the right to demand that the Seller
repurchase such an undivided interest.  The sale of the Loan
Participation under this Agreement shall be on a "NON-RECOURSE" basis, and the
right of repurchase provisions under this Section shall be construed as a "call"
rather than a "put."

    


    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    VI.           ADDITIONAL
LOANS

    


    A.           The
parties recognize and agree that each of them may have other loans outstanding
to borrower and/or may make additional loans in the future to the borrower
and/or other co-makers, guarantors and endorsers under the Loan, which other
and/or future loans may not be participated among themselves or at
all.

    


    B.           The
parties further recognize and agree that they shall have no obligation to
attempt to collect or assist to collect payments under the Loan in preference
and priority over the collection and/or enforcement of any other existing or
future loans by themselves as referenced in Paragraph A above.

    


    C.           Each
party, however, agrees that the proceeds of all collateral directly securing
repayment of the Loan, shall be first applied to the payment of the Loan until
it is paid in full.  Any excess proceeds may be applied by the
affected party to the payment of any other existing or future loans then owing
to it, that may be indirectly secured by such collateral as a result of the
inclusion of "cross-collateralization" provisions in the security agreements
executed in connection with the Loan in favor of it.

    


    D.           The
parties hereto further agree that the parties shall have no interest in any
other property of the borrower or of any co-maker, guarantor or endorser, taken
as security for any other existing or future loan(s) made by any of them, or
acquired by any of them, or in any property now or hereafter in the possession
or control of any of them, which other property may indirectly secure repayment
of the Loan by reason of "cross-collateralization;" except that, if any such
other property or the proceeds thereof is applied to the reduction of the Loan,
then the parties shall be entitled to share in such an application of payment or
payments as provided by this Agreement.

    


    E.           The
parties hereto agree that they are obligated to advise each other of any such
additional loans presently in existence with borrower

    


    VII.           INDEMNIFICATION;
ATTORNEY’S FEES & EXPENSES; CHOICE OF LAW

    


    A.           Each
party shall indemnify, defend and hold harmless the other parties for any direct
(but not consequential) losses sustained (including reasonable costs and
attorney fees) as a direct and proximate result of a party’s intentional or
negligent act or omission or its failure to honor its warranties or obligations
in this Agreement.

    


    B.           If
any party hereto shall bring suit or other proceeding against the other as a
result of any alleged breach or failure by the other party to fulfill or perform
any covenants or obligations under this Agreement, then the prevailing party
obtaining final judgment in such action shall be entitled to receive from the
non-prevailing party reasonable attorneys’ fees incurred by reason of such
action and all costs of suit and preparation thereof at both trial and appellate
levels.

    


    C.           This
Agreement shall be governed by and construed and enforced in accordance with
applicable federal law and the laws of the State of California.  In
addition, any such suit or proceeding shall be brought in the federal or state
courts located in Orange County, California, which courts shall have sole and
exclusive in personam, subject matter and other jurisdiction in connection with
such suit or proceedings, and venue shall be appropriate for all purposes in
such courts.

    


    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    D.           The
foregoing provisions notwithstanding, in no event shall the costs incurred by
Seller in connection with the obligations set forth in this Section exceed the
purchase price paid by Buyer for the specific Loan Participation which is the
subject of the issue(s) which have given rise to said costs.

    


    E.           Notwithstanding
anything to the contrary, in no event shall the aggregate amount of damages
payable by Seller exceed the amount actually received by Seller pursuant to this
Agreement.

    


    VIII.         TERMINATION
- SUSPENSION

    


    This
Agreement may be terminated by either party at any time but such termination
shall not in any respect change or modify the obligation of Seller or of Buyer
with respect to Loan Participations purchased prior to such
termination.  The effective time of termination shall be the earlier
of the time written notice is actually received by the other party or 5 days
after written notice is posted in the United States Postal Service by the
canceling party.  Termination of this Agreement shall not in any way
affect either Seller’s or Buyer’s obligations, representations, warranties or
indemnifications with respect to Loan Participations already purchased by
Buyer.  All representations, warranties, covenants and agreements
herein contained on the part of the parties with respect to Loan Participations
already purchased shall survive the termination of this Agreement and shall be
effective until the Loan Participations provided for hereunder are paid in full,
or longer, if expressly provided herein.

    


    IX.           ASSIGNMENTS

    


    This Agreement shall be binding on the
parties hereto and their respective successors and assigns; provided, however,
that, except as expressly permitted in this Agreement, the Seller may not assign
any of its rights or delegate any of its duties hereunder without the prior
written consent of the Buyer.  No merger, reorganization,
re-chartering or similar corporate restructuring of Seller shall be deemed an
Assignment within the meaning of this Agreement.  Buyer may not sell,
pledge, assign, sub-participate or otherwise transfer its undivided interest
under the Loan without first obtaining the prior written consent of the Seller,
which consent shall not be unreasonably withheld.  Any sale, pledge,
assignment, sub-participation or other transfer of any undivided interest by the
Buyer, or any of them, shall be subject to the terms and conditions of this
Agreement.

    


    X.           CONFIDENTIALITY

    


    The
Seller and the Buyer shall keep all non-public information obtained pursuant to
this Agreement and the transactions contemplated hereby or effected in
connection herewith confidential in accordance with the customary procedures and
legal requirements for handling confidential information of this nature and will
not disclose such information to outside parties (except counsel, auditors,
regulators, and government agencies) but may make disclosure (a) reasonably
required by a bona fide transferee or prospective transferee, provided that any
recipient of such disclosure shall abide by the confidentiality provisions of
this Section X, (b) necessary in order to obtain any consents, approvals,
waivers or other arrangements required to permit the execution, delivery and
performance by the Seller or the Buyer of this Agreement, (c) as required or
requested by a governmental regulator or pursuant to legal process or as
required by applicable law or (d) in connection with the enforcement
hereof.  Each of the Seller and the Buyer agrees that any confidential
information (which includes all information (i) that is not and does not
hereafter become publicly available through no fault of the Seller or the Buyer
or any of their respective agents or representatives and (ii) that is provided
by the Seller or the Buyer or any of their respective agents or representatives,
in any format whatsoever), shall be used only in connection with this Agreement
and the transactions contemplated hereby and not for any other purpose;
provided, that the Seller and the Buyer may disclose on a confidential basis any
such confidential information to any regulatory authority or other governmental
agency.  Without limiting the generality of the foregoing, the Seller
and the Buyer shall observe any applicable law prohibiting the disclosure of
information regarding borrowers and shall require of each third party to whom
disclosure is made pursuant to this Section X to observe any such applicable
laws.

    


    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    XI.           MISCELLANEOUS
PROVISIONS

    


    A.           The
parties each warrant and represent that each party has been duly authorized to
enter into this Agreement and that each will undertake an independent evaluation
of the credit risks of each loan.

    


    B.           It
is the intent of these parties that this Agreement strictly conform to the
participation loan requirements of the Federal Credit Union Act and Regulations
of National Credit Union Administration (insofar as a party hereto be a Federal
Credit Union) and to the credit union participation loan requirements of laws
and regulations of the several states (as to each state for which a state
licensed or chartered credit union is a party).  Any provision hereto
which violates any such applicable law is deemed severed and the remaining terms
of the Agreement will remain in full force and effect.  Each party
hereto, whether a credit union or not, agrees that all records in its possession
relating to the Loan shall be accessible on reasonable notice to the appropriate
state and/or federal credit union regulatory agency.

    


    C.           Unless
otherwise provided in this Agreement, all notices under this Agreement shall be
in writing, deemed effective upon receipt and addressed as indicated
below.

    


    
      	
              To:
      Ministry Partners Investment Company, LLC

            	
              To:
      Western Federal Credit Union

            
	
              915
      W. Imperial Highway

            	
              14500
      Aviation Blvd.

            
	
              Suite
      120

            	
              Hawthorne,
      CA 90250

            
	
              Brea,
      CA 92821

            	
              Attn:
      Chief Investment Officer

            
	
              Attn:
      President

            	 
      


    

     

    D.           No
remedy under this Agreement is exclusive of any other available remedy, but each
remedy shall be cumulative and shall be in addition to other remedies given
under this Agreement or existing at law or in equity.

    


    E.           Any
forbearance by a party to this Agreement in exercising any right or remedy under
this Agreement or otherwise afforded by applicable law shall not be a waiver or
preclude the exercise of that or any other right or remedy.

    


    F.           All
recitals made in this Agreement are incorporated by reference into this
Agreement.

    


    G.           The
headings herein are for convenience only and shall not affect the construction
of this Agreement.

    


    H.           This
document contains the entire Agreement between the parties hereto and cannot be
modified in any respect except by an agreement in writing signed by all
parties.  The invalidity of any portion of this Agreement will in no
way affect the balance thereof. This Agreement will remain in effect until the
Loan Participations sold hereunder are liquidated completely.

    


    I.           This
Agreement and the Loan Participation Purchase Certificates may be signed in
counterpart and will constitute one in the same document with all the rights and
provisions thereof obligatory to all parties.

    


    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    J.           Any
copy or facsimile copy of this Agreement or of the Loan Participation Purchase
Certificate shall have the same force and effect as the original.

    


    In
witness whereof, the parties hereby accept and agree to the terms and conditions
set forth in this Agreement.

    


    SELLER:

    


    MINISTRY
PARTNERS INVESTMENT COMPANY, LLC

    a
California limited liability company

    


    


    By:______________________________

    


    Name:
Billy M. Dodson

    Title:
President

    


    Dated:

    


    BUYER:

    


    WESTERN
FEDERAL CREDIT UNION

    a
California credit union

    


    


    By:______________________________

    


    Name:
Gary J. Keleher,

    Title:
Executive Vice President

    


    Dated:

    


     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    EXHIBIT
“A”

    LOAN
PARTICIPATION PURCHASE CERTIFICATE

    


    
      	
              Loan
      Number:

            	
              999999

            
	 
      	 
      
	
              Seller:

            	
              Ministry
      Partners Investment Company, LLC

            
	 
      	 
      
	
              Buyer:

            	
              Western
      Federal Credit Union

            


    

    


    This
Loan Participation Purchase Certificate is hereby made a part of that certain
Master Loan Participation Purchase and Sale Agreement (Non-Recourse) between
Seller and Buyer dated _____________.

    


    LOAN
INFORMATION

    
      
        	
                Type
      of Loan

              	
                LOAN TYPE

              
	
                Borrower
      Name

              	
                BORROWER
      NAME

              
	
                Outstanding
      Principal Balance –

                At
      Origination:

                As
      of 01/01/07:

              	
                 

                $00000000.00

                $00000000.00

              
	
                Interest
      Rate –

                Stated
      Interest Rate

                Less Banking Incentive

                Effective
      Interest Rate

              	
                 

                0.000%

                0.125%

                0.000%

              
	
                Loan
      Origination Date:

              	
                01/01/07

              
	
                Maturity
      Date

              	
                01/01/07

              
	
                Amortization
      Period

              	
                25
      years

              
	
                Monthly
      Loan Payments:

                Interest
      only for

                Principal
      & Interest

              	
                 

                $n/a
      per month for n/a months

                $0000.00
      per month

              


      

    

    


    LOAN PARTICIPATION
PURCHASE

    
      
        	
                Purchase
      Price of Loan Participation

              	
                $00000000.00

              
	
                Participation
      Percentage of Loan

              	
                0%

              
	
                Effective
      Purchase Date

              	
                01/01/07

              
	
                First
      Payment Date

              	
                01/01/07

              
	
                Buyer
      Interest Rate

              	
                0%

              


      

    

    


    


    SPECIFIC LOAN
NOTES/DISCLOSURES

    
      
        	
                o See Attached
      Addendum

              	
                o Not
      Applicable

              


      

    

    


    The
parties signed below evidence confirmation of this Loan Participation Purchase
Certificate. There are no other terms or conditions except as may be set forth
on an attached and signed addendum.

    


    
      	
              Seller

            	
              Buyer:

            
	
              Ministry
      Partners Investment Company, LLC

            	
              Western
      Federal Credit Union

            
	 
      	 
      
	 
      	 
      
	
              By:___________________________________

            	
              By:________________________________

            
	
              Name:_________________________________

            	
              Name:______________________________

            
	
              Title:__________________________________

            	
              Title:_______________________________

            
	 
      	 
      
	
              Date:__________________________________

            	
              Date:_______________________________

            


    

    
 

    
      
        
        

      

      
        17