Document:

ex10-1.htm

    Exhibit
10.1

    LOAN
AND SECURITY AGREEMENT

    

    

    THIS LOAN AND SECURITY AGREEMENT, dated
as of November 30, 2009, is made between Ministry Partners Investment Company,
LLC (the “Company” or “Borrower”), having its principal office at 915 West
Imperial Highway, Suite 120, Brea, California 92821 and WESTERN CORPORATE
FEDERAL CREDIT UNION, a federal corporate credit union (the “Lender”), having
its principal office at 924 Overland Court, San Dimas, California
91773.

    

    WHEREAS, the Company’s wholly-owned
subsidiary, Ministry Partners Funding, LLC (“MPF”), holds certain mortgage loans
that will be pledged as collateral for this Agreement and has agreed to assign
such mortgage loans to the Company to be thereafter assigned to Lender as
collateral for the loan to be made to the Company;

    

    WHEREAS, the Company and Lender have
agreed that the assignment of the pledged loans to Lender under the terms of
this Agreement is conditioned upon the payoff of certain indebtedness owed by
MPF to BMO Capital Markets Corporation, as agent, and Fairway Finance Company,
LLC, as lender; and

    

    WHEREAS, the Company and the Lender
desire to set forth herein the terms and conditions upon which the Lender shall
provide a loan to the Company;

    

    NOW, THEREFORE, the parties hereby
agree as follows:

    

    1. DEFINITIONS.

     

    1.1 
Defined
Terms.  Capitalized terms defined below or elsewhere in this
Agreement (including the Exhibits hereto) shall have the following
meanings:

     

    “Advance” means a
single one-time disbursement by the Lender in the Commitment Amount pursuant to
Article 2 of this Agreement.

    

    “Affiliate” has the
meaning set forth in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act.

    

    “Agreement” means this
Loan and Security Agreement, as originally executed or as it may from time to
time be supplemented, modified or amended.

    

    “Borrower” has the
meaning set forth in the first paragraph of the Agreement.

    

    “Business Day” means
any day excluding Saturday or Sunday and excluding any day on which the Federal
Reserve Bank of San Francisco is closed for business.

    

    “Closing Date” means
November 30, 2009.

    

    “Collateral” has the
meaning set forth in Section 3.1 hereof.

    

    “Collateral Documents”
has the meaning set forth in Section 2.2 hereof.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Commitment” has the
meaning set forth in Section 2.7 hereof.

    

    “Commitment Amount”
means Twenty Eight Million Dollars ($28,000,000).

    

    “Commitment Fee” has
the meaning set forth in Section 2.7 hereof.

    

    “Company” has the
meaning set forth in the first paragraph of this Agreement.

    

    “Controlled Entity” or
“Controlled Entities” means any corporation, limited liability company,
association or other business entity in which more that fifty percent (50%) of
the total voting power of equity interests entitled to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by the Company or one or more of the other Controlled
Entities of the Company or a combination thereof.

    

    "Custodial Agreement"
means a bilateral agreement referencing this Agreement between Lender and
Lender's Custodian (or such superseding agreement thereto) or a tri-party
agreement referencing this Agreement between Lender, the Company/Borrower and
Lender's Custodian (or such superseding agreement thereto.)

    

    “Debt” means all
indebtedness or other obligations of the Company which, in  accordance
with GAAP, would be included in determining total liabilities as shown on the
liabilities side of a balance sheet of the Company; and,

    

    (a) 
all indebtedness or other obligations of the Company for borrowed money or for
the deferred payment for property or services; provided that for purposes of
this Agreement, there shall be excluded from Debt:

     

    (i) 
loan loss reserves, and

     

    (ii) 
deferred taxes arising from capitalized excess servicing fees and capitalized
servicing rights.

     

    “Default” means the
occurrence of any event or existence of any condition which, but for the giving
of Notice, the lapse of time, or both, would constitute an Event of
Default.

    

    “ECCU” means
Evangelical Christian Credit Union, a California state chartered credit
union.

    

    “Eligible Mortgage
Loan” means a mortgage loan made to a church or religious institution
acquired by Borrower, or on behalf of Borrower, in the ordinary course of its
business operations, evidenced by a Mortgage Note, secured by a first-priority
Mortgage and otherwise qualifying as Collateral acceptable to Lender in its
reasonable discretion.

    

    “Event of Default”
means any of the conditions or events set forth in Section 8.1
hereof.

    

    “Exchange Act” means
the Securities Exchange Act of 1934, as amended from time to time, and any
successor statute.

    
      
        
        

      

      
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    “Fixed Rate” means
3.95% per annum, based upon the actual number of days elapsed in a 365 day
year.

    

    “GAAP” means generally
accepted accounting principles set forth in the opinions and pronouncements of
the Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession, which are
applicable to the circumstances as of the date of determination.

    

    “Hedging Arrangements”
means any agreements or other arrangements (including, without limitation,
interest rate swap agreements, interest rate cap agreements and forward sale
agreements) entered into by the Company to protect itself against changes in
interest rates or the market value of its assets.

    

    “Indemnified
Liabilities” has the meaning set forth in Article 10 hereof.

    

    “Investor” means a
Person that has entered into a Purchase Commitment with the
Company.

    

    “Lender” has the
meaning set forth in the first paragraph of this Agreement.

    

    "Lender's Custodian"
means U.S. Bank
National Association or its successor, or any other entity acting pursuant to a
Custodial Agreement between it, Lender and (if applicable) the
Company/Borrower.  Lender reserves the right to act as the custodian
of the Mortgage Files, Pledged Mortgages and Collateral Documents under this
Agreement.

    

    “Lien” means any lien,
mortgage, deed of trust, pledge, security interest, charge or encumbrance of any
kind (including any conditional sale or other title retention agreement, any
lease in the nature thereof, and any agreement to give any security interest),
but specifically excludes a Purchase Commitment.

    

    “Loan Documents” means
this Agreement, the Note, and each other document, instrument or agreement
executed by the Company in connection herewith as any of the same may be
amended, restated, renewed or replaced from time to time.

    

    “MPF” means Ministry
Partners Funding, LLC, a Delaware limited liability company that is 100% owned
by the Company.

    

    “Maturity Date” shall
mean the close of business on March 30, 2012.

    

    “Miscellaneous
Charges” has the meaning set forth in Section 2.10 hereof.

    

    “Mortgage” means a
first priority mortgage or first priority deed of trust or other instrument
creating a lien on an estate in fee simple interest in real
property.

    
      
        
        

      

      
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    “Mortgage File” means
the documents and items described in Section 2.2 hereof, including the
Collateral Documents.

    

    “Mortgage Note” means
a promissory note secured by a Mortgage.

    

    “Note” has the meaning
set forth in Section 2.3 hereof.

    

    “Notices” has the
meaning set forth in Section 9 hereof.

    

    “Obligations” means
any and all indebtedness, obligations and liabilities of the Company to the
Lender under this Agreement.

    

    “Payment Instruction
Letter” means that certain Payoff and Bailee Letter dated November 30,
2009, a copy of which is attached hereto as Exhibit “C” to this
Agreement.

    

    "Origination Fee"
means a one-time fee payable by the Company in consideration of the Lender’s
activity in preparation for issuance of the loan under this
Agreement.  The amount of the Origination Fee is set forth in Section
2.7 hereof.

    

    “Persons” means and
includes natural persons, corporations, limited liability companies, limited
partnerships, general partnerships, joint stock companies, joint ventures,
associations, companies, trusts, banks, trust companies, land trusts, business
trusts or other organizations, whether or not legal entities, and governments
and agencies and political subdivisions thereof.

    

    “Pledged Mortgages” or
“Pledged Mortgage Loan” has the meaning set forth in Section 3.1 (a)
hereof.

    

    “Purchase Commitment”
means a written commitment, subscription for or purchase agreement issued in
favor of the Company by an Investor or group of Investors pursuant to which that
Investor or group of Investors commits to purchase an interest in a Pledged
Mortgage Loan.

    

    “Qualifying Substitute
Mortgage Loans” shall mean Mortgage Loans acquired by or originated by
the Company that meet the requirements of an Eligible Mortgage
Loan.

    

    “Release Amount” has
the meaning set forth in Section 3.2 (d) hereof.

    

    “Servicer” means an
entity designated by the Company to act as servicing agent for the Eligible
Mortgage Loans and Pledged Mortgage Loans.

    

    “Servicing Contract”
means the arrangement, whether or not in writing, pursuant to which the Company
has the right to service Pledged Mortgage Loans.

    

    “Share Account” means
an account of the Company established with Lender into or from which monies may
be debited or credited, as described in this Agreement.

    
      
        
        

      

      
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    “Statement Date” means
the date of the most recent financial statements of the Company (and, if
applicable, its Controlled Entities, on a consolidated basis) delivered to the
Lender under the terms of this Agreement.

    

    “Tangible Net Worth”
means the excess of the total assets over total liabilities of the Company on
any given date determined in accordance with GAAP and applied in the preparation
of the Company’s financial statements referred to in this Agreement, including
Article 11 hereof, plus loan loss reserves, provided that, for purposes of this
Agreement, there shall be excluded from total assets:

    

    (a) 
advances or loans to shareholders, officers  or employees of the
Company;

    

    (b) 
assets pledged to secure any liabilities not included in the Company’s Debt;
and

    

    (c) 
intangible assets.

    

               
The Company shall be entitled to exclude from its total liabilities any
unsecured debt securities issued and outstanding on any given date determined in
accordance with GAAP and included in the Company’s financial statements referred
to in this Agreement having a maturity date later than March 30, 2012 in
determining its Tangible Net Worth.

    

    “Trust Receipt” means
a trust receipt in a form approved by and pursuant to which Lender, or the
Lender's Custodian, may deliver any document relating to the Collateral to the
Company for correction.

    

    1.2 
Other Definitional
Provisions.

     

    1.2
(a)  Accounting terms not otherwise defined herein shall have the meanings
given the terms under GAAP.

    

    1.2
(b)  Defined terms may be used in the singular or the plural, as the
context requires.

    

    1.2
(c)  All references to time of day shall be Pacific Standard Time or
Pacific Daylight time, as applicable, unless expressly provided to the
contrary.

    

    2. 
THE CREDIT.

     

    2.1 
The
Commitment.

     

    2.1
(a)  Subject to the terms and conditions of this Agreement and provided no
Default or Event of Default has occurred and is continuing, Lender agrees to
make the Advance to the Company, provided that the Advance must occur before the
Closing Date.

    

    2.1 (b)  The Advance shall be
used by the Company solely for the purpose of funding the acquisition of the
Pledged Mortgages free and clear of all liens and encumbrances (except such as
are in favor of Lender under this Agreement), and shall be made at the request
of the Company, in the manner hereinafter provided in Section 2.2 hereof, to be
secured by delivery to Lender of such Pledged Mortgages as Collateral therefore.
The Company may use the amount of the Advance not required to purchase the
Pledged Mortgages to fund its own liquidity requirements.

    
      
        
        

      

      
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    2.2 
Procedures for
Obtaining Advances.

     

    Upon the
Company’s request prior to the Closing Date, Lender will make the Advance. It is
a condition precedent to Lender’s obligation to make the Advance that Lender or
Lender’s Custodian have received the documents (“Collateral Documents”), with
respect to each Pledged Mortgage Loan, listed below:

    

    a. 
The original signed Mortgage Note, endorsed by ECCU in blank with corresponding
interim endorsements, assignments, or any rider thereto that show a complete and
unbroken chain of title from the originator of such Pledged Mortgage Loan to
Borrower and one (1) copy of same. (Lender may negotiate and transfer the
Mortgage Note only upon a Default or Event of Default);

    

    b. 
The related original recorded Mortgage with evidence of recording indicated
thereon;

    

    c. 
Copies of all interim assignments of the Pledged Mortgage Loans, including
confirmation that the interim assignment of a Mortgage Note from ECCU to MPF has
been submitted for recordation or in each case with evidence of recording
indicated thereon (subject to the provisions of Section 2.8 below relating to
items in the process of being recorded);

    

    d. 
An assignment of the Mortgage Note, endorsed by the Borrower in blank and in
recordable form (Lender may negotiate and transfer the Mortgage Note only upon a
Default or Event of Default);

    

    e. 
the original or duplicate original lender’s ALTA Policy of Title Insurance or an
equivalent thereto;

    

    f. 
a copy of the mortgage appraisal relating to the Pledged Mortgage
Loan;

    

    g. 
the Pledged Mortgage Loans certificate of casualty or hazard insurance;
and

    

    h. 
all existing credit information on the maker of the Mortgage Note that has
entered into the related Pledged Mortgage Loan.

    

    All
documents must be satisfactory to the Lender in its reasonable
discretion.  All Mortgage File and Collateral Documents must be
submitted to the Lender, or Lender’s Custodian, in a top tabbed, legal size
manila file folder, hole-punched and acco-fastened.  Each folder must
be labeled with the mortgagor name(s).

    
      
        
        

      

      
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    The Company shall hold in trust for the
Lender, and the Company shall deliver to the Lender or Lender's Custodian, as
Lender designates, promptly upon request, any other document relating to a
Pledged Mortgage Loan not required to be delivered upon the
Advance.

    

    To make the Advance pursuant to the
Company’s request, the Lender shall, provided the Company is in compliance with
this Agreement, wire funds in accordance with the terms of the Payment
Instruction Letter and, to the extent that the amount of the Advance exceeds the
amount of the Unpaid Balance set forth in such Payment Instruction Letter,
credit the Company’s Share Account maintained by the Company for this purpose.
The Company may then wire funds from that account as necessary, in conformity
with Lender’s policies and procedures for wire transfers of members’
funds.

    

    2.3  
Note. The
Company’s Obligations pursuant to this Agreement shall be evidenced by the
promissory note (the “Note”) dated as of the date hereof substantially in form
of Exhibit “A” attached hereto. The term “Note” shall include all extensions,
renewals and modifications of the Note and all substitutions therefore. All
terms and provisions of the Note are hereby incorporated herein.

     

    2.4  
Interest.

     

    2.4
(a)  Except as otherwise provided in Section 2.4 (c) hereof, the unpaid
principal balance of the Advances shall bear interest, accrued daily, at the
Fixed Rate.

    

    2.4
(b)  Interest shall be computed on the basis of a 365-day year and applied
to the actual number of days elapsed in each interest calculation period and
shall be payable monthly in arrears, on the last day of each month, commencing
with the first month following the date of the Advance. Borrower authorizes
Lender to automatically debit the Share Account that Borrower designates for
this purpose on the due date for such payment on the Note but, if the balance
thereof is insufficient, Lender may apply any funds held in another share
deposit account held by the Company with Lender to effect this payment when
due.

    

    2.4
(c)  Upon Notice to the Company, after the occurrence and during the
continuation of an Event of Default, the unpaid amount of the Advance shall bear
interest until paid in full at a per annum rate of interest (the “Default Rate”)
equal to two percent (2%) in excess of the rate of interest otherwise
applicable, but not greater than the maximum rate which may be charged by a
federal credit union.

    

    2.5 
Principal
Payments.

     

    2.5
(a)  In addition to payments on account of interest, principal reduction
payments of $116,667 shall be made each month, commencing with the first such
payment due on December 31, 2009, and with the outstanding principal amount of
the Advance payable in full on the Maturity Date.

    

    2.5 (b)  Borrower may repay all
or any portion of the unpaid principal balance of the Advance prior to the
Maturity Date.  Upon the event of each such full or partial early
payment of principal, however, Borrower shall be required to pay Lender a
prepayment fee. Said fee shall be determined by assessing the “prepayment rate”
against the amount of such prepayment for the time period remaining in the term
from the prepayment to the Maturity Date.  The “prepayment rate” shall
be calculated by subtracting the rate of interest in effect at the time of
prepayment for the $5MM Mega WesCorp Fixed Rate Share Certificate, as published
by Lender, the term of which corresponds to the time period remaining in the
loan term from the prepayment date to the Maturity Date, from the Fixed Rate,
but in no event shall the “prepayment rate” be less than zero.  No
such prepayment shall excuse, replace or be credited toward any scheduled
interim installment of principal and/or interest.

    
      
        
        

      

      
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    2.5 (c)  Lender may require that
all payments from the proceeds of the sale or other disposition of Pledged
Mortgages be paid directly by the Investor to the Lender to be promptly applied
by the Lender against the Advance. In such event, Lender shall apply such
payments and inform the Company of the complete details of the transaction on
the same Business Day as its receipt, if received prior to 1:00 pm Pacific Time
on that Business Day. Alternatively, the Company may deliver Qualifying
Substitute Mortgage Loans, whose value is equivalent to the proceeds of the sale
or other disposition of Pledged Mortgages, to Lender or Lender’s Custodian, said
Mortgage Notes to be acceptable to Lender in its reasonable
discretion.

    

    2.5
(d)  If the principal amount of any Pledged Mortgage is prepaid in whole or
in part which represents (i) a complete payoff of such Mortgage Loan; or (ii) a
payment on a Pledged Mortgage Loan that is accompanied by a release of the
collateral for such Mortgage Loan, the Company and its Servicer shall promptly
remit to Lender, as and when received, for payment toward the principal balance
of the Note, any portion of such sums collected attributable to principal
repayments on the Collateral.  Alternatively, the Company shall be
entitled to pledge and deliver an equivalent amount of Qualifying Substitute
Mortgage Loans in an amount equal to the portions of any sums collected that are
attributable to principal repayments on the Collateral.  Prior to
Lender’s receipt of a Qualifying Substitute Mortgage Loan as substituted
Collateral, the Company and Lender shall be required to approve an amendment to
Exhibit “B” that is acceptable to each party.  Once approved, Lender
agrees to deliver a copy of such amended Exhibit “B” to the Company, Servicer
and Custodian, if applicable and each of the Company and Lender shall make
appropriate entries in its general account records to reflect such
transfer.

    

    2.5
(e)  The Company shall give Notice to Lender (by e-mail or fax) of the
Pledged Mortgages for which proceeds are to be or have been received. In the
event that the payment from an Investor for the purchase of Pledged Mortgages is
less than the outstanding principal balance of such Pledged Mortgages, Lender is
authorized to debit the Share Account that the Company designates for this
purpose, but if the balance thereof is insufficient, Lender may debit any of the
Company’s Share Accounts for an amount equal to such deficiency.

    

    2.5
(f)  The Company shall be obligated to pay to Lender, without the necessity
of prior demand or notice from Lender, and the Company authorizes Lender to
debit the Share Accounts that the Company maintains with Lender for any amounts
received by the Company from a disposition of the Pledged Mortgages in the event
of the sale, maturity or other disposition of a Pledged
Mortgage.  Alternatively, the Company may deliver Qualifying
Substitute Mortgage Loans, whose value is equivalent to the proceeds of the sale
or other disposition of Pledged Mortgages, to Lender or Lender’s Custodian, said
Mortgage Notes to be acceptable to Lender in its reasonable
discretion.

    
      
        
        

      

      
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    2.6  Method of
Making Payments.

     

    2.6
(a)  Except as otherwise specifically provided herein, all payments
hereunder shall be made to Lender not later than the close of business on the
date when due unless such date is a non-Business Day, in which case, such
payment shall be due on the first Business Day thereafter, and shall be made in
lawful money of the United States of America in immediately available funds
transferred by pre-authorized debit from a Share Account or via wire to accounts
designated by Lender from time to time.

    

    2.6
(b)  After the occurrence and during the continuance of an Event of
Default, and provided that Lender has provided the Company with a
contemporaneous notice of intent to debit a Company Share Account for Default,
the Company authorizes Lender to debit any of the Company’s Share Accounts for
any Obligations due and owing the Lender.

    

    2.7 
Origination Fee and
Commitment Fee. The Company shall pay Lender a non-refundable Commitment
Fee of $5,000 upon execution of this Agreement. Upon making the Advance, the
Company shall pay Lender a one time Origination Fee of $100,000.00 less the
amount of the Commitment Fee actually paid. The Company authorizes Lender to
automatically debit the Share Account that the Company designates for this
purpose but, if the balance thereof is insufficient, any of its Share Accounts,
to effect these payments when due.

     

    2.8 
Delivery of
Instruments.  In the event that the Company cannot deliver all
interim recorded assignments that show a complete and unbroken chain of title
from the originator of such Pledged Mortgage Loan to the Company on or before
the Closing Date because such document or documents have not been returned from
the applicable public recording office, then the Company shall promptly deliver
or cause to be delivered to Lender or its designated Custodian (as agent for
Lender) the interim assignment with evidence of recording thereon promptly
following the Company’s receipt thereof from the public recording office of such
filing.  The Company agrees to exercise and take any actions
reasonably requested by Lender to ensure that proper evidence of recording of
such interim assignments is delivered to Lender or its designated
Custodian.  If the Company cannot deliver or cause to be delivered any
of the interim recorded assignments of the Pledged Mortgage Loans as a result of
such instruments being in the recording process or having been lost or returned
by a public recording office in their original recorded form, then the Company
shall deliver a photocopy thereof and an Officer’s Certificate certifying that
such copy represents a true and correct copy of the original.

     

    2.9 
Repayment or Pay Down
Obligations.  If at any time Lender finds any material
deficiency in the Mortgage File or Collateral Documents of a Pledged Mortgage
Loan or determines that a Pledged Loan was originated based on untrue,
incomplete or inaccurate information, whether or not the Company had knowledge
of such misrepresentation or incorrect information, Lender agrees to notify the
Company and Servicer within two (2) business days thereafter of (i) such
deficiency in the Mortgage File or Collateral Documents or (ii) its
determination that the Pledged Mortgage Loan was originated based upon untrue,
incomplete or inaccurate information.  In that instance, the Company
shall be obligated to pay down the principal amount of any Obligations due
Lender in an amount equal to the outstanding balance of such Pledged Mortgage
Loan as of the date of such Notice or deliver one or more Qualifying Substitute
Mortgage Loans in an amount equal to the outstanding balance of such Pledged
Mortgage Loan.

    
      
        
        

      

      
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    If the Company chooses to deliver a
cash payment in the event there is a material deficiency in the Mortgage File or
Collateral Documents of a Pledged Mortgage Loan, the Company agrees to (i)
permit Lender to debit any of its Share Accounts for such repurchase amount; or
(ii) transmit immediately available proceeds to Lender within five (5) business
days after the date on which such obligation arises.  In the event
that the Company chooses to deliver Qualifying Substitute Mortgage Loans to
satisfy a deficiency in or improper orgination of a Pledged Mortgage Loan, the
Company agrees to deliver Qualifying Substitute Mortgage Loans in an amount
equal to the outstanding balance of such Pledged Mortgage Loan to Lender within
five (5) business days after the date on which such obligation
arises.  Upon receipt by Lender of Qualifying Substitute Mortgage
Loans or payment of the principal amount of a Pledged Mortgage Loan being
released under this Section 2.9, Lender shall release the Mortgage File and
Collateral Documents to the Company and shall execute such documents of transfer
or assignment as may be reasonably requested by the Company to release Lender’s
security interest in such Pledged Mortgage Loans.

     

    Prior to Lender’s receipt of a
Qualifying Substitute Mortgage Loan as substituted Collateral, the Company and
Lender shall be required to approve an amendment to Exhibit “B” that is
acceptable to each party.  Once approved, Lender agrees to deliver a
copy of such amended Exhibit “B” to the Company, Servicer and Custodian, if
applicable and each of the Company and Lender shall make appropriate entries in
its general account records to reflect such transfer.  This Section
2.9 provides the sole remedies to Lender, its successors and permitted assigns
with respect to any deficiency in the Collateral Documents or Mortgage File or
arising from a claim that a misrepresentation, omission or inaccurate
information was given when a Pledged Mortgage Loan was originated.

     

    2.10  Miscellaneous
Charges. The Company agrees to reimburse the Lender for miscellaneous
charges and expense (collectively, “Miscellaneous Charges”) reasonably incurred
by or on behalf of Lender in connection with the handling and administration of
Advances, and to reimburse the Lender for Miscellaneous Charges incurred by or
on behalf of Lender in connection with the handling and administration of the
Collateral. For the purposes hereof, Miscellaneous Charges shall include, but
not be limited to, charges for wire transfers, check processing charges, charges
for security delivery fees, charges for overnight delivery of Collateral to
Investors and all fees and charges due to the Custodian under any Custodial
Agreement, if applicable. Miscellaneous Charges are due when incurred, but shall
not be delinquent if paid within fifteen (15) days after receipt of an invoice
or an account analysis statement from Lender.

     

    2.11 
Interest
Limitation. All agreements between the Company and Lender are hereby
expressly limited so that in no contingency or event whatsoever, whether by
reason of acceleration of maturity of this Agreement or the Note or otherwise,
shall the amount paid or agreed to be paid to Lender for the use, forbearance,
loaning or retention of the Advances secured by this Agreement exceed the
maximum permissible under applicable law. If from any circumstances whatsoever,
fulfillment of any provisions hereof or of the Note, or any other document
securing this Agreement at any time shall involve transcending the limit of
validity prescribed by law, then the obligation to be fulfilled shall
automatically be reduced to the limit of such validity, and if from any
circumstances Lender should ever receive as interest an amount which would
exceed the highest lawful rate of interest, such amount which would be in excess
of interest shall be applied to the reduction of the principal balance secured
by the Note and not to the payment of interest thereunder. This provision shall
control all other provisions of this Agreement and all other related agreements
between the Company and Lender and shall also be binding upon and available to
any subsequent holder of the Note.

    
      
        
        

      

      
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    3.  COLLATERAL.

    

    3.1 
Grant of Security
Interest. As security for the payment of the Note and for the performance
of the Note and for the performance of all of the Company’s Obligations, the
Company hereby assigns and transfers to the Lender all right, title and interest
in and to and grants a security interest to Lender in the following described
property (the “Collateral”):

    

    3.1
(a)  All Pledged Mortgage Loans, including all Mortgage Notes and Mortgages
evidencing or securing such Pledged Mortgage Loans that are identified in
Exhibit “B” hereto as may be amended from time to time (the “Pledged
Mortgages”);

    

    3.1
(b)  All Purchase Commitments held by, or subsequently obtained by, the
Company covering the Pledged Mortgages and all proceeds resulting from the sale
thereof to Investors pursuant thereto; and all personal property, contract
rights, servicing and servicing fees and income or other proceeds, amounts and
payments payable to the Company as compensation or reimbursement, accounts and
general intangibles of whatsoever kind relating to the Pledged Mortgages, and
the Purchase Commitments and all other documents or instruments relating to the
Pledged Mortgages including, without limitation, any interest of the Company in
any fire, casualty or hazard insurance policies and any awards made by any
public body or decreed by any court of competent jurisdiction for a taking or
for degradation of value in any eminent domain proceeding as the same relate to
the Pledged Mortgages;

    

    3.1
(c)  All right, title and interest of the Company in and to all escrow
accounts, documents, instruments, files, surveys, certificates, correspondence,
appraisals, computer programs, tapes, discs, cards, accounting records
(including all information, records, tapes, data, programs, discs and cards
necessary or helpful in the administration or servicing of the Pledged
Mortgages) and other information and data of the Company relating to the Pledged
Mortgages;

    

    3.1
(d)  All right, title and interest of the Company in and to any Hedging
Arrangements entered into to protect the Company against changes in the value of
Pledged Mortgages, including, without limitation, all rights to payment arising
under such Hedging Arrangements; and

    

    3.1
(e)  All cash and non-cash proceeds of the Pledged Mortgages, including all
dividends, distributions and other rights in connection with, and all additions
to, modifications of and replacements for, the Pledged Mortgages, and all
products and proceeds of the Pledged Mortgages, together with whatever is
receivable or received when the Pledged Mortgages or proceeds thereof are sold,
collected, exchanged or otherwise disposed or, whether such disposition is
voluntary or involuntary, including without limitation, all rights to payments
with respect to any cause of action affecting or relating to the Pledged
Mortgages or proceeds thereof.

    
      
        
        

      

      
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    3.2  Release of Security Interest
in Collateral.

    

    3.2
(a)  Pledged Mortgages shall be promptly (i.e., within two (2) business
days of payment) released from the Lender’s security interest only against
payment to Lender of the Release Amount (as set forth in Section 3.2 (d)) in
connection with such Pledged Mortgages.

    

    3.2
(b)  Prior to the occurrence of an Event of Default, the Company may redeem
a Pledged Mortgage from Lender’s security interest by notifying Lender of its
intention to redeem such Pledged Mortgage from pledge and either:

    

    (i) 
paying, or causing an Investor to pay, to Lender, for application to prepayment
of the principal balance of the Note, the Release Amount in connection with such
Pledged Mortgage, or

    

    (ii) 
delivering Qualifying Substitute Mortgage Loans acceptable to Lender (and
Lender's Custodian) in its reasonable discretion.

    

    3.2
(c)  Following the occurrence of a Default or Event of Default, Lender may,
in its sole discretion, but with no obligation to the Company to do so, release
its security interest in any Pledged Mortgage against payment of the Release
Amount in connection with such Pledged Mortgage.

    

    3.2
(d)  The amount (the “Release Amount”) to be paid by the Company to offset
the release of a Pledged Mortgage shall be:

    

    (i) 
prior to the occurrence of an Event of Default, the principal amount of a
Pledged Mortgage;

     

    (ii) 
from and after the occurrence and during the continuance of an Event of Default,
the total remaining aggregate amount of the Obligations then outstanding and
unpaid.

    

    3.4  Release of
Collateral. To the extent that Collateral is held by Lender’s Custodian
under a Custodial Agreement, which when executed by Lender, Borrower and
Custodian shall become part of this Agreement, its release shall be governed
thereby. As to Collateral held directly by Lender, the following shall
apply:

    

    3.4 (a) Lender may deliver documents
relating to the Collateral to the Company for correction or completion pursuant
to a Trust Receipt.

    

    3.4 (b) Upon receipt of a notice
from the Company and repayment of the Release Amount with respect to a Pledged
Mortgage identified by the Company, any Collateral Documents relating to the
redeemed Pledged Mortgage which have not been delivered to the Company or an
Investor shall be promptly (i.e., within two (2) business days of payment)
released by Lender to the Company.

    

    3.5  Collection and Servicing
Rights. So long as no Event of Default shall have occurred and be
continuing, the Company or its designated servicing agent shall be entitled to
service, and shall continue to service the Pledged Mortgages (using due care),
and to receive and collect directly all sums payable to the Company in respect
of the Collateral. Lender hereby acknowledges that the Company may continue to
have the Pledged Loans serviced by ECCU, pursuant to the terms of its existing
Loan Servicing Agreement with the Company.  It shall be the obligation
of the Company to provide sufficiently detailed and timely (not less frequently
than monthly) reporting to Lender, to show its receipt of all payments on
account of principal for the Pledged Mortgages.

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    Following
the occurrence of any Event of Default, after giving effect to any cure period,
Lender or its designee shall thereafter be entitled to service and receive and
collect all sums payable to the Company in respect of the Collateral, and in
such case:

    

    (a) 
Lender or its designee in its discretion may, in its own name, in the name of
the Company or otherwise, demand, sue for, collect or receive any money or
property at any time payable or receivable on account of or in exchange for any
of the Collateral, but shall be under no obligation to do so,

    

    (b) 
the Company shall, if Lender so requests, hold in trust for the benefit of
Lender and forthwith pay to Lender at its office designated by Notice hereunder,
all amounts thereafter received by the Company upon or in respect of any of the
Collateral, advising Lender as to the source of such funds, and

    

    (c) 
all amounts so received and collected by Lender shall be held by it as part of
the Collateral.

    

    3.6  
Return of
Collateral. If no Obligations shall be outstanding and unpaid, Lender
shall deliver or release its security interest and shall promptly (i.e., within
two (2) business days) deliver, or cause Lender's Custodian to deliver, all
Collateral in its possession to the Company at the Company’s expense. The timely
receipt of the Company for any Collateral released or delivered to the Company
pursuant to any provision of this Agreement shall be a complete and full
acquittance for the Collateral so returned, and Lender shall thereafter be
discharged from any liability or responsibility therefore.

    

    4.  CONDITIONS
PRECEDENT.

    

    The obligation of Lender to make the
Advance under this Agreement is subject to Section 2, above, and the
satisfaction, in the reasonable discretion of Lender, on or before the date
thereof of the following conditions precedent:

    

    Lender shall have received the
following, all of which must be satisfactory in form and content to the Lender,
in its reasonable discretion:

    

    (a) 
The Note, this Agreement and all other Loan Documents duly executed by the
Company;

    

    (b) 
A resolution of the managers of the Company, certified as of the date of this
Agreement by its secretary, authorizing the execution, delivery and performance
of this Agreement and the other Loan Documents, and all other instruments or
documents to be delivered by the Company pursuant to this
Agreement;

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    (c) 
A resolution of the Managers of MPF, certified as of the date of this Agreement
by its secretary, authorizing the delivery of the Pledged Mortgages to Lender
under the terms of the Loan Documents and the execution, delivery and
performance of that certain Payment Instruction Letter, dated November 30, 2009,
a copy of which is attached hereto as Exhibit “C.”

    

    (d) 
Financial statements of the Company containing a balance sheet as of September
30, 2009, related statements of income and changes in members’ equity for the
period ended on such date prepared in accordance with GAAP consistently
applied;

    

    (e) 
A Uniform Commercial Code, tax lien and judgment search of the appropriate
public records for the Company, which search shall not have disclosed the
existence of any prior Lien on the Collateral other than in favor of the Lender
or as permitted hereunder;

    

    (f) 
Receipt by the Lender of any fees due on the date hereof, including, but not
limited to, Commitment and Origination Fee; and

    

    (g) 
Evidence that all accounts necessary into which the Advance will be funded has
been established.

    

    5. 
REPRESENTATIONS AND WARRANTIES.

    

    The Company hereby represents and
warrants to Lender, as of the date of this Agreement and as of the date of the
Advance, that:

    

    5.1 
Organization; Good
Standing; Controlled Entities.  The Company and each Controlled
Entity of the Company is a limited liability company (LLC) or entity duly
organized, validly existing and in good standing under the laws of the
jurisdictions of its organization, has the full legal power and authority to own
its properties and to carry on its business as currently conducted and is duly
qualified as a foreign  entity to do business and is in good standing
in each jurisdiction in which the transaction of its business makes such
qualification necessary, except in jurisdictions, if any, where a failure to be
in good standing has no material adverse effect on the business, operations,
assets or financial condition of the Company. For the purposes hereof, good
standing shall include qualification for any and all licenses and payment of any
and all taxes required in the jurisdiction of its organization and in each
jurisdiction in which the Company transacts business.

    

    5.2 
Authorization and
Enforceability. The Company has the power and authority to execute,
deliver and perform this Agreement, the Note and all other Loan Documents to
which the Company is a party and to make the borrowings hereunder. The
execution, delivery and performance by the Company of this Agreement, the Note
and all other Loan Documents to which the Company is party and the making of the
borrowings hereunder and thereunder, have been duly and validly authorized by
all necessary approvals of its managers (none of which actions has been modified
or rescinded, and all of which actions are in full force and effect) and do not
and will not conflict with or violate any provision of law, of any judgments
binding upon the Company, or of the operating agreement of the Company, conflict
with or result in a breach of or constitute a default or require any consent
under, or result in the creation of any Lien upon any property or assets of the
Company other than the Lien on the Collateral granted hereunder, or result in or
require the acceleration of any indebtedness of the Company pursuant to any
agreement, instrument or indenture to which the Company is a party or by which
the Company or its properties may be bound or affected. This Agreement, the Note
and all other Loan Documents contemplated hereby or thereby constitute legal,
valid, and binding obligations of the Company, enforceable in accordance with
their respective terms, except as limited by bankruptcy, insolvency or other
such laws affecting the enforcement of the creditors’ rights.

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    5.3 
Approvals. The
execution and delivery of this Agreement, the Note and all other Loan Documents
and the performance of the Company’s obligations hereunder and thereunder and
the validity and enforceability hereof and thereof do not materially require any
license, consent, approval or other action of any state or federal agency or
governmental or regulatory authority other than those which have been obtained
and remain in full force and effect.

    

    5.4 
Financial
Condition. The balance sheet of the Company as of the Statement Date, and
the related statements of income and changes in  members equity for
the fiscal period ended on the Statement Date, heretofore furnished to Lender,
fairly present the financial condition of the Company (and its Controlled
Entities) as of the Statement Date and the results of its operations for the
fiscal period ended on the Statement Date. The Company had, on the Statement
Date, no known material liabilities, direct or indirect, fixed or contingent,
matured or unmatured, or liabilities for taxes, long-term leases or unusual
forward or long-term commitments not disclosed by, or reserved against in, said
balance sheet and related statements, and at the present time there are no
material unrealized or anticipated losses from any loans, advances or other
commitments of the Company except as heretofore disclosed to Lender in writing.
Said financial statements were prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved. Since the Statement Date,
there has been no material adverse change in the business, operations, assets or
financial condition of the Company (and its Controlled Entities), nor is the
Company aware of any statement of facts which (with or without notice or lapse
of time or both) would or could result in any such material adverse
change.

    

    5.5 
Litigation.
There are no actions, claims, suits or proceedings pending or, to the knowledge
of the Company threatened or reasonably anticipated against or affecting the
Company in any court or before any arbitrator or before any government
commission, board, bureau or other administrative agency which, if adversely
determined, may reasonably be expected to result in any material and adverse
change in the business, operations, assets or financial condition of the Company
as a whole, or which would affect the validity or enforceability of this
Agreement, the Note or any other Loan Document.

    

    5.6 
Compliance with
Laws. The Company is not in violation of any provision of any law, or of
any judgment, award, rule, regulation, order, decree, writ or injunction of any
court of public regulatory body or authority which might have a material adverse
effect on the business, operations, assets or financial condition of the Company
as a whole or which would affect the validity or enforceability of this
Agreement, the Note or any other Loan Document.

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    5.7 
Agreements.  The
Company is not a party to any agreement, instrument or indenture or subject to
any restriction materially and adversely affecting its business, operations,
assets or financial condition, except as disclosed (i) in the financial
statements described in Section 5.4 hereof; (ii) in its annual and periodic
reports filed with the U.S. Securities and Exchange Commission under the
Exchange Act; or (iii) as described in the attached Schedule 5.7.  The
Company is not in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any agreement,
instrument, or indenture which default could have a material adverse effect on
the business, operations, properties or financial condition of the Company as a
whole. No holder of any indebtedness of the Company has given notice of any
asserted default thereunder, and no liquidation or dissolution of the Company or
and no receivership, insolvency, bankruptcy, reorganizations or other similar
proceedings relative to the Company or of any of its Controlled Entities or any
of its properties is pending, or to the knowledge of the Company,
threatened.

    

    5.8 
Title to
Properties. The Company has good, valid, insurable (in the case of real
property) and marketable title to all of its properties and assets (whether real
or personal, tangible or intangible) reflected on the financial statements
described in Section 5.4 hereof, except for such properties and assets as have
been disposed of since the date of such financial statements as no longer used
or useful in the conduct of its business or as have been disposed of in the
ordinary course of business,  and all such properties and assets are
free and clear of all Liens except as disclosed in such financial
statements.

    

    5.9 
Special
Representations Concerning Collateral. The Company hereby represents and
warrants to Lender, as of the date of this Agreement and as of the date of the
Advance, that:

    

    5.9(a) 
The Company is the legal and equitable owner and holder, free and clear of all
Liens (other than Liens granted hereunder), of the Pledged Mortgages. All
Pledged Mortgages have been duly authorized and validly issued to the Company,
and all of the foregoing items of Collateral comply with all of the requirements
of this Agreement, and have been and will continue to be validly pledged or
assigned to Lender, subject to no other Liens.

    

    5.9(b) 
The Company has, and will continue to have, the full right, power and authority
to pledge the Collateral pledged and to be pledged by it hereunder.

    

    5.9(c) 
Any Pledged Mortgage Loan and any related document included in the Pledged
Mortgages:

    

    
      
      

    

    
      (i)  has
been made in compliance with all applicable laws and
regulations;

    (ii)  is
and will continue to be valid and enforceable in accordance with its terms,
without defense or offset subject, however, to the effect of bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditor’s rights generally;

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    (iii)  has
not been modified or amended except in writing, which writing is part of the
Collateral Documents and Mortgage File, nor any requirements thereof waived;
and

    

    (iv)  complies
and will continue to comply with the terms of this Agreement.

    

    Each
first Lien on the premises described therein is secured by a first Lien on the
premises described therein, and has or will have a title insurance policy, in
American Land Title Association form or equivalent thereof, from a recognized
title insurance company, insuring the priority of the Lien of the Pledged
Mortgage and meeting the usual requirements of Investors purchasing such Pledged
Mortgage Loans.

    

    5.9(d)  All
fire and casualty policies covering the premises encumbered by each Pledged
Mortgage will (1) name and continue to name the Company and its successors and
assigns as the insured under a standard mortgagee clause, (2) are and will
continue to be in full force and effect, and (3) afford and will continue to
afford insurance against fire and such other risks as are usually insured
against in the broad form of extended coverage insurance from time to time
available.

    

    6.  
AFFIRMATIVE COVENANTS.

    

    The Company hereby covenants and agrees
that, so long as there remain any Obligations to be paid or performed under this
Agreement or under any other Loan Document, the Company shall:

    

    6.1 
Payment of
Note. Pay or cause to be paid timely all Obligations payable hereunder
and under the Note in accordance with the terms hereof and thereof.

    

    6.2 
Financial Statements
and Other Reports. Deliver to Lender:

    

    6.2
(a)  As soon as available and in any event within forty five (45) days
after the end of each calendar quarter, statements of income and changes in
members’ equity of the Company for such quarter and for the period from the
beginning of the fiscal year in which such quarter occurs to end of such
quarter, and the related balance sheet as of the end of such quarter, all in
reasonable detail and certified as to the fairness of presentation by the
President of the Company, or other designated officer appointed by the Company
and approved by Lender,  subject, however, to year-end audit
adjustments.

    

    6.2
(b)  As soon as available and in any event within one hundred twenty (120)
days after the close of each fiscal year of the Company, statements of income,
changes in members’ equity and cash flow of the Company for such year, and the
related balance sheet as of the end of such year (setting forth in comparative
form the corresponding figures for the preceding fiscal year), all in reasonable
detail and accompanied by an opinion in form and substance satisfactory to
Lender and prepared by an accounting firm reasonably satisfactory to Lender, or
other independent certified public accountants of recognized standing selected
by the Company and acceptable to Lender, as to said financial statements and a
certificate signed by the President of the Company, or other designated officer
appointed by the Company and approved by Lender, stating that said financial
statements fairly present the financial condition and results of operations of
the Company (and, if applicable, its Controlled Entities) as of the end of, and
for, such year.

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    6.2
(c)  Reports in respect of the Pledged Mortgages in such detail and at such
times as Lender in its discretion may reasonably request at any time or from
time to time.

    

    6.2
(d)  Copies of all regular or periodic financial and other reports, if any,
which the Company shall file with the U.S. Securities and Exchange Commission or
any governmental agency successor thereto, as Lender may reasonably
request.

    

    6.2
(e)  From time to time, with reasonable promptness, such further
information regarding the business, operations, properties or financial
condition of the Company as Lender may reasonably request.

    

    6.3 
Maintenance of
Existence; Conduct of Business. Preserve and maintain its existence as a
limited liability company in the state of its organization in good standing and
all of its rights, privileges, licenses and franchises necessary or desirable in
the normal conduct of its business, including, without limitation, its
eligibility as finance lender,  conduct its business in an orderly and
efficient manner; maintain a net worth of acceptable assets as required by
applicable state regulatory authorities for maintaining the Company’s
eligibility as a finance lender; and make no substantial or fundamental change
in the nature or character of its business without notifying the Lender prior to
the contemplated change of the change contemplated and the time that the change
will be made.

    

    6.4 
Compliance with
Applicable Laws. Comply with the requirements of all applicable laws,
rules, and regulations and orders of any governmental authority, a breach of
which could materially adversely affect its business, operations, assets or
financial condition, except where contested in good faith and by appropriate
proceedings.

    

    6.5 
Inspection of
Properties and Books. Permit authorized representatives of Lender, or
Lender's Custodian, to discuss the business, operations, assets and financial
condition of the Company and its Controlled Entities with its officers and
employees and to examine its books of account, including but not limited to all
internal or external (i.e., third-party) loan reviews of any Pledged Mortgage
Loan that is the subject of this Agreement, and make copies or extracts thereof,
all at such reasonable times as Lender may reasonably request. The Company will
provide its accountants with a copy of this Agreement promptly after the
execution hereof and will instruct its accountants to answer candidly any and
all questions that the officers of Lender or Lender's Custodian, may address to
them in reference to the financial condition or affairs of the Company and its
Controlled Entities. The Company may have its representatives in attendance at
any meetings between the officers or other representatives of Lender or Lender's
Custodian, and the Company accountants held in accordance with this
authorization.

    

    6.6 
Notice. Give
prompt Notice to Lender of:

    

    (a) 
any action, suit or proceeding instituted by or against the Company or any of
its Controlled Entities in any federal or state court or before any commission
or other regulatory body (federal, state or local, domestic or foreign), or any
such proceedings threatened against the Company or any of its Controlled
Entities in a writing containing the details thereof that the Company deems to
have a material affect on the Company in the event the Company does not prevail
at trial,

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    (b) 
the filing, recording or assessment of any federal, state or local tax Lien
against the Company, or any of its assets or any of its Controlled
Entities,

    

    (c) 
the occurrence of any Event of Default hereunder or the occurrence of any
Default and continuation thereof for five (5) days,

    

    (d) 
any other action, event or condition of any nature which may lead to or result
in a material adverse effect upon the business, operations, assets, or financial
condition of the Company and its Controlled Entities or which, with or without
notice or lapse of time or both, would constitute a default under any other
agreement, instrument or indenture to which the Company or any of its Controlled
Entities is a party or to which the Company or any of its Controlled Entities,
its property, or assets may be subject.

    

    6.7 
Payment of Debt,
Taxes, etc. Pay and perform all obligations and indebtedness of the
Company, and cause to be paid and performed all obligations and indebtedness of
its Controlled Entities, promptly and in accordance with the terms thereof and
pay and discharge or cause to be paid and discharged promptly all taxes,
assessments and governmental charges or levies imposed upon the Company or its
Controlled Entities or upon their respective income, receipts or properties
before the same shall become past due, as well as all lawful claims for labor,
materials and supplies or otherwise which, if unpaid, might become a Lien or
charge upon such properties or any part thereof; provided,  however,
that the Company and its Controlled Entities shall not be required to pay taxes,
assessments or governmental charges or levies or claims for labor, materials or
supplies for which the Company or its Controlled Entities shall have obtained an
adequate bond or adequate insurance or which are being contested in good faith
and by proper proceedings which are being reasonable and diligently pursued and
for which proper reserves have been created.

    

    6.8 
Insurance.
Maintain:

    

    (a) 
errors and omissions insurance with such companies and in such amounts as
satisfy prevailing requirements applicable to the Company’s business operations;
and

    

    (b) 
liability insurance and fire and other hazard insurance on its properties, with
reasonable insurance companies approved by Lender, in such amounts and against
such risks as is customarily carried by similar businesses operating in the same
vicinity.

    

    6.9 
Closing
Instructions. Indemnify and hold Lender harmless from and against any
loss, including reasonable attorney’s fees and costs, attributable to the
failure of a title insurance company or agent to comply with the disbursement or
instruction letter or letters of the Company relating to any Pledged Mortgage
Loan.

    

    6.10 
Other Loan
Obligations. Perform all material obligations under the terms of each
loan agreement, note, mortgage, security agreement or debt instrument by which
the Company is bound or to which any of its properties is subject and promptly
notify Lender in writing of a declared default under or the termination,
cancellation, reduction or nonrenewal of any of its lines of credit or borrowing
facilities with any other commercial lender. Exhibit “D” hereto sets forth
a true and complete list of all lines of credit or credit facilities agreements
entered into by the Company with a finance lender, financial institution or
commercial lender as of the date hereof.

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    6.11 
Notice of Certain
Borrowing Arrangements.  The Company hereby agrees to give
Lender at least thirty (30) days prior written notice before it enters into an
additional or replacement line of credit, working capital, term or borrowing
facility with a finance lender, financial institution or commercial entity that
will replace or supplement the Company’s current credit facilities identified in
Exhibit “D” hereto.  Notwithstanding the preceding sentence, the
Company shall not be required to notify or obtain the consent of Lender to offer
for sale its debt securities (whether secured or unsecured), investment notes or
other investment securities that it may offer or sell from time to time;
provided, however, that the Company complies with the  negative
covenants set forth in Section 7.3 of this Agreement.  The Company
hereby covenants and agrees that the loan documents of such additional or
replacement credit facility shall provide that Lender’s rights in the Collateral
and Pledged Loans shall at all times be superior to the rights of such finance
lender in the Collateral and Pledged Loans that are subject to this
Agreement.

    

    6.12 
Special Affirmative
Covenants Concerning Collateral.

    

    6.12
(a)  Warrant and defend the right, title and interest of Lender in and to
the Collateral against the claims and demand of all Persons
whomsoever.

    

    6.12
(b)  Service or cause to be serviced, before and after any Default by
Company, all Pledged Mortgage Loans in accordance with the standard requirements
of the investors that have entered into a Purchase Commitment covering the same,
including without limitation taking all actions necessary to enforce the
obligations of the obligors under such Pledged Mortgage Loans. The Company shall
hold all escrow funds collected in respect of Pledged Mortgages without
commingling the same with non-custodial funds, and apply the same for the
purpose for which such funds were collected.

    

    6.12
(c)  Execute and deliver to Lender such Uniform Commercial Code financing
statements with respect to the Collateral and Pledged Mortgage Loans as Lender
may reasonably request. The Company shall also execute and deliver to Lender
such further instruments of sale, pledge or assignment or transfer, and such
powers of attorney, as reasonably required by Lender, but such documents and
powers' of attorney may only be utilized by Lender, in accordance with the terms
of this Agreement, in the Event of Default or an Event of
Default.  The Company shall do and perform all matters and things
necessary or desirable to be done or observed, for the purpose of effectively
creating, maintaining and preserving the security and benefits intended to be
afforded Lender under this Agreement. Lender shall have all the rights and
remedies of a secured party under the Uniform Commercial Code of California or
any other applicable law, in addition to all rights provided for
herein.

    

    6.12
(d)  Promptly comply in all respects with the terms and conditions of all
Purchase Commitments, and all extensions, renewals and modifications or
substitutions thereof or thereto.

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    6.12
(e)  Maintain, at its offices and upon request, make available to Lender
the originals, or copies in any case where the originals have been delivered to
Lender or to an Investor, of the Pledged Mortgage Loans, Purchase Commitments,
and all related Pledged Mortgage Loan documents and instruments, and all files,
surveys, certificates, correspondence, appraisals, computer programs, tapes,
discs, cards, accounting records and other information and data relating to the
Collateral and Pledged Mortgage Loans.

    

    7. 
NEGATIVE COVENANTS.

    

    The
Company covenants and agrees that, so long as there remain any Obligations to be
paid or performed, the Company shall not, either directly or indirectly, without
the prior written consent of Lender, which consent shall not be unreasonably
withheld:

    

    7.1 
Contingent
Liabilities. Guarantee, endorse or otherwise become contingently liable
for any obligations except:

    

    
      	
               
      

            	
              (a)

            	
              by
      endorsement of negotiable instruments for deposit or collection in the
      ordinary course of business;

            

    

    

    
      	
               
      

            	
              (b)

            	
              as
      required by contracts for the sale of loans to Investors;
    or

            

    

    

    
      	
               
      

            	
              (c)

            	
              as
      incurred in the ordinary course of its business in offering debt
      securities to its investors, acquiring loan participation or mortgage
      investments or in undertaking its ordinary business operations as
      disclosed in its periodic and annual reports filed with the U.S.
      Securities and Exchange Commission.

            

    

    

    Nothing
herein shall prohibit the Company from entering into third party contracts that
do not cause a violation of 7.3, below, or do not otherwise negatively
materially impact the Company's financial position.

    

    7.2 
Merger.
Liquidate, dissolve, consolidate, or merge or sell any substantial part of its
assets without the written consent of Lender, which consent shall not be
unreasonably withheld.

    

    7.3 
Debt to Tangible Net
Worth Ratio. Permit the ratio of Debt (excluding, for this purpose only,
Debt arising under the Hedging Arrangements, to the extent of assets arising
under the same Hedging Arrangements) to Tangible Net Worth of the Company (and
its Controlled Entities, on a consolidated basis) at any time to exceed 15 to 1,
to be measured annually as of the fiscal year-end of the Company.

    

    7.4 
Increase or Material
Change to Certain Credit Facilities.  Increase or materially
alter the terms and conditions of the credit facilities identified in Exhibit
“D” hereto without prior approval of Lender, which Lender shall not unreasonably
withhold.

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    7.5 
Special Negative
Covenants Concerning Collateral.

    

    7.5
(a)  The Company may not modify, amend, extend, change, release, waive,
excuse, forebear, fail to enforce or otherwise change the terms and conditions
of any Pledged Mortgage, or the obligations of any obligor or guarantor
thereunder, without the prior written consent of Lender, which consent shall not
be unreasonably withheld or delayed by Lender. Any act by Company in
contravention of the previous sentence shall be null and void; and a Default and
Event of Default under this Agreement.

    

    7.5
(b)  The Company shall not sell, assign, transfer or otherwise dispose of,
or grant any option with respect to, or pledge or otherwise encumber (except
pursuant to this Agreement or as permitted herein) any of the Collateral or any
interest therein without Lender’s written consent.

    

    7.5
(c)  The Company shall not make any compromise, adjustment or settlement in
respect of any of the Collateral or accept other than the cash in payment or
liquidation of the Collateral without Lender’s written consent.

    

    8. 
DEFAULTS; REMEDIES.

    

    8.1  Events of Default.
The occurrence of any of the following conditions or events shall be an event of
default (“Event of Default”).

    

    8.1
(a)  Failure to pay any payment the principal or interest of the Note when
due whether an installment or at stated maturity, by acceleration, or otherwise;
or failure to pay, within any applicable grace period, the principal or interest
on any other indebtedness of the Company due Lender; or breach or default with
respect to any other material term of any other agreement between Company and
Lender; or

    

    8.1
(b)  Failure of the Company to perform or comply with any term or condition
applicable to it contained in any Section of Articles 6 or 7 of this Agreement;
or

    

    8.1
(c)  Any of the Company’s representations or warranties made or deemed made
herein or in any other Loan Document, or in any statement or certificates at any
time given by the Company in writing pursuant hereto or thereto shall be
inaccurate or incomplete in any material respect on the date as of which made or
deemed made; or

    

    8.1
(d)  The Company shall default in the performance of or compliance with any
term contained in this Agreement or any other Loan Document and such default
shall not have been remedied or waived within thirty (30) days after the
earliest of:

    

    
      	
               
      

            	
              (i)

            	
              receipt
      by the Company of Notice from the Lender of such
  default,

            

    

    

    
      	
               
      

            	
              (ii)

            	
              receipt
      by the Lender of Notice from the Company of such default,
    or

            

    

    

    
      	
               
      

            	
              (iii)

            	
              the
      date the Company should have notified the Lender of such default;
      or

            

    

    

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    8.1 (e)
(1)  A court having jurisdiction shall enter a decree or order for relief
in respect of the Company in an involuntary case under applicable bankruptcy,
insolvency or other similar law in respect of the Company which decree or order
is not stayed; the Company shall consent to the entry of any such decree or
order; or a filing of a voluntary case under any applicable bankruptcy,
insolvency or other similar law in respect of the Company, or any other similar
relief shall be granted under any applicable federal or state law;
or,

    

    (2) 
the filing of any involuntary case in respect of the Company, any applicable
bankruptcy, insolvency or other similar law; or a decree or order of a court
having jurisdiction for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over the Company, or
over all or a substantial part of their respective property, shall have been
entered; or the involuntary appointment of an interim or permanent receiver,
trustee or other custodian of the Company, for all or a substantial part of
their respective property; or the issuance of a warrant of attachment, execution
or similar process against any substantial part of the property of the Company,
and the continuance of any such events in Subsection (2) above for sixty (60)
days unless dismissed, bonded off or discharged; or

    

    8.1
(f)  The Company shall consent to the appointment of or taking possession
by a receiver, trustee or other custodian for all or a substantial part of its
property; the making by the Company of any assignment for the benefit of
creditors; or the liability or failure of the Company, or the admission by the
Company, in writing of its inability, to pay its debts as such debts become due;
or

    

    8.1
(g)  Failure of the Company to perform any contractual obligations which it
may have, if such obligations in the aggregate exceed Five Hundred Thousand
Dollars ($500,000); or

    

    8.1 (h)
Any money judgment, writ or warrant of attachment, or similar process involving
in any case an amount in excess of Two Hundred Fifty Thousand Dollars ($250,000)
shall be entered or filed against the Company or any of its Controlled Entities
or any of their respective assets and shall remain unpaid, unvacated, unbonded
or unstayed for a period of thirty (30) days or in any event later than five (5)
days prior to the date of any proposed sale thereunder; or

    

    8.1 (i)
Any order, judgment or decree shall be entered against the Company decreeing the
dissolution or split up of the Company and such order shall remain undischarged
or unstated for a period in excess of thirty (30) days; or

    

    8.1 (j)
The Company shall purport to disavow its obligations hereunder or shall contest
the validity or enforceability hereof; or the Lender’s security interest on any
portion of the Collateral shall become unenforceable or otherwise impaired;
provided that, subject to the Lender’s approval, no Event of Default shall occur
as a result of such impairment if all Advances made against any such Collateral
shall be paid in full within ten (10) days of the date such impairment;
or

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

    8.1 (k)
There shall be a material adverse change in the financial condition, business or
operations of the Company, which remains uncured by Company thirty (30) days
after Notice by Lender to Company.

    

    8.1 (l)
Failure of the Company to make payment on a debt due and owing to any other
creditor or creditors, when the aggregate of such payment default exceeds
$500,000.

    

    8.2 
Remedies.

    

    8.2
(a)  Upon the occurrence of any Event of Default described herein, the
unpaid principal amount of and accrued interest on the Note and all other
Obligations shall automatically become due and payable, without presentment,
demand or other requirements of any kind, all of which are hereby expressly
waived by the Company.

    

    8.2
(b)  Upon the occurrence of any Event of Default, Lender may, by Notice to
the Company, declare all Obligations to be immediately due and payable,
whereupon the same shall forthwith become due and payable, together with all
accrued interest thereon.

    

    8.2
(c)  Upon the occurrence of any Event of Default, Lender may also do any of
the following:

    

    (i) 
Foreclose upon or otherwise enforce its security interest in Lien on the
Collateral to secure all payments and performance and of the Obligations in any
manner permitted by law or provided for hereunder.

    

    (ii) 
Notify all obligors in respect of Collateral that the Collateral has been
assigned to Lender and that all payments thereon are to be made directly to
Lender or such other party as may be designated by Lender; settle, compromise,
or release, in whole or in part, any amounts owing on the Collateral, any
portion of the Collateral, on reasonable terms; enforce payment and prosecute
any action or proceeding with respect to any and all Collateral; and where any
such Collateral is in default, foreclose on and enforce security interests in
such Collateral by any available judicial procedure or without judicial process
and sell property acquired as a result of any such foreclosure.

    

    (iii) 
Act, or contract with a third party to act, as servicer or subservicer of each
item of Collateral requiring servicing and perform all obligations required in
connection with any applicable servicing agreement, such third party’s fees to
be paid by the Company.

    

    (iv) 
Require the Company to assist in assembling the Collateral and/or books and
records relating thereto and make such available to Lender at a place to be
designated by Lender.

    

    (v) 
Enter onto property where any Collateral or books and records relating thereto
are located and take possession thereof with or without judicial
process.

    

    (vi) 
Prior to the disposition of the Collateral, prepare it for disposition in any
manner and to the extent Lender deems appropriate.

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    (vii) 
Exercise all rights and remedies of a secured creditor under the Uniform
Commercial Code of California or other applicable law, including, but not
limited to, selling or otherwise disposing of the Collateral, or any part
thereof, at one or more public or private sales, whether or not such Collateral
is present at the place of sale, for cash or credit or future delivery, on
reasonable terms and in such reasonable manner, including, without limitation,
sale pursuant to any applicable Purchase Commitment. If notice is a required
under such applicable law, Lender will give the Company not less than twenty
(20) days’ notice of any such public sale or of the date after which any private
sale may be held. The Company agrees that twenty (20) days’ notice shall be
reasonable notice. Lender may, without notice or publication, adjourn any public
or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for the sale, and such sale may be made
at any time or place to which the same may be so adjourned. In case of any sale
of all or any part of the Collateral on credit or for future delivery, the
Collateral so sold may be retained by Lender until the selling price is paid by
the purchaser thereof, but Lender shall not incur any liability in case of the
failure of such purchaser to take up and pay for the Collateral so sold and, in
case of any such failure, such Collateral may again be sold upon like notice.
Lender may, however, instead of exercising the power of sale herein conferred
upon it, proceed by a suit or suits at law or in equity to collect all amounts
due upon the Collateral or to foreclose the pledge of and sell the Collateral or
any portion thereof under a judgment or decree of a court or courts of competent
jurisdiction, or both.

    

    (viii) 
Proceed against the Company on the Note.

    

    8.2 (d)
Lender shall incur no liability as a result of the sale or other disposition of
the Collateral, or any part thereof, at any public or private sale or
disposition. The Company hereby waives (to the extent permitted by law) any
claims it may have against Lender arising by reason of the fact that the price
at which the Collateral may have been sold at such private sale was less than
the price which might have been obtained at a public sale, even if Lender
accepts the first offer received and does not offer the Collateral to more than
one offeree. The Company acknowledges that Pledged Mortgage Loans are collateral
of a type which is customarily sold on a recognized market. The Company waives
any right it may have to prior notice of the sale of any Pledged Mortgage, and
agrees that Lender may purchase any Pledged Mortgages at a private sale of such
Collateral.

    

    8.2
(e)  The Company specifically waives and releases (to the extent permitted
by law) any equity or right of redemption, all rights of redemption, stay or
appraisal which the Company has or may have under any rule of law or statute now
existing or hereafter adopted, and any right to require Lender to (1) proceed
against the Company (2) proceed against or exhaust any of the Collateral or
pursue its rights and remedies as against the Collateral in any particular
order, or (3) pursue any other remedy in its power. Lender shall not be required
to take any steps necessary to preserve any rights of the Company against
holders of mortgages prior in lien to the Lien of any Mortgage included in the
Collateral or to preserve rights against prior parties.

    

    8.2 (f)
Lender may, but shall not be obligated to, advance any sums or do any act or
thing necessary to uphold and enforce the Lien and priority of, or the security
intended to be afforded by, any Mortgage included in the Collateral, including,
without limitation, payment of delinquent taxes or assessments and insurance
premiums. All advances, charges, costs and expenses, including reasonable
attorney’s fees and disbursements, incurred or paid by  Lender in
exercising any right, power or remedy conferred by this Agreement, or in the
enforcement hereof, together with interest thereon, at the Default Rate, from
the time of payment until repaid, shall become a part of the principal balance
outstanding hereunder and under the Note.

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

    8.2 (g)
No failure on the part of Lender to exercise, and no delay in exercising, any
right, power or remedy provided hereunder, at law or in equity shall operate as
a waiver thereof; nor shall any single or partial exercise by Lender of any
right, power or remedy provided hereunder, at law or in equity preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. The remedies herein provided are cumulative and are not exclusive of any
remedies provided at law or in equity.

    

    8.3          Application of
Proceeds. The proceeds of any sale, disposition or other enforcement of
Lender’s security interest in all or any part of the Collateral shall be applied
by Lender:

    

    First, to the payment
of the costs and expenses of such sale or enforcement, including reasonable
compensation to Lender’s agents and counsel, and all expenses, liabilities and
advances made or incurred by or on behalf of Lender in connection
therewith;

    

    Second, to the
payment of interest accrued and unpaid on the Note;

    

    Third, to the payment
of any other Obligations due (other than principal and interest) under this
Agreement and the Loan Documents;

    

    Fourth, to the
payment of the outstanding principal balance of the Note; and

    

    Finally, to the
payment to the Company, or to its successors or assigns, or as a court of
competent jurisdiction may direct, of any surplus then remaining from such
proceeds.

    

    If the proceeds of any such sale,
disposition or other enforcement are insufficient to cover the costs and
expenses of such sale, as aforesaid, and the payment in full of all Obligations,
the Company shall remain liable for any deficiency.

    

    8.4 
Lender Appointed
Attorney-in-Fact.  Upon any uncured Event of Default, Lender is
hereby appointed the attorney-in-fact of the Company, with full power of
substitution, for the purpose of carrying out the provisions hereof and taking
any action and executing any instruments which Lender may deem necessary or
advisable to accomplish the purposes hereof.  Without limiting the
generality of the foregoing, but only upon any uncured Event of
Default  Lender shall have the right to endorse all Pledged Mortgages
payable to the order of the Company, or to receive, endorse and collect all
checks made payable to the order of the Company representing any payment on
account of the principal of or interest on, or the proceeds of sale of, any of
the Pledged Mortgages and to give full discharge for the same.

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

    8.5 
Right of Set-
Off. If the Company shall default in the payment of the Note, any
interest accrued thereon, or any other sums which may become payable hereunder
when due, or in the performance of any of its other obligations or liabilities
under this Agreement, Lender shall have the right, at any time and from time to
time, without notice, to set-off and to appropriate or apply any and all
property or indebtedness of any kind at any time held or owing by Lender to or
for the credit or the account of the Company against and on account
of  the Obligations of the Company under the Note and this Agreement,
irrespective of whether or not  Lender shall have made any demand
hereunder and whether or not said Obligations shall have matured.

    

    9. 
NOTICES.

    

    All notices, demands, consents,
requests and other communications required or permitted to be given or made
hereunder (collectively, “Notices”) shall, except as otherwise expressly
provided hereunder, be in writing and shall be delivered in person or telecopy
or mail, first class or delivered by overnight courier, return receipt
requested, postage prepaid, addressed to the respective parties hereto at their
respective addresses hereinafter set forth or, as to any such party, at such
other address as may be designated by it in a Notice to the other. All Notices
shall be conclusively deemed to have been properly given or made when duly
delivered, in person, by telecopy or by overnight courier, or if mailed, on the
date of receipt as noted on the return receipt, addressed as
follows:

    

    

    
      
        	 
      	
                If
      to the Company:

              
	 
      	 
      
	 
      	
                Bill
      Dodson, President.

              
	 
      	
                Ministry
      Partners Investment Company, LLC

              
	 
      	
                915
      West Imperial Highway, Suite 120

              
	 
      	
                Brea,
      CA  92821

              
	 
      	 
      
	 
      	
                If
      to Lender:John Taylor

              
	 
      	
                Director,
      Member Credit Services

              
	 
      	
                WESTERN
      CORPORATE

              
	 
      	
                FEDERAL
      CREDIT UNION

              
	 
      	
                924
      Overland Court

              
	 
      	
                San
      Dimas, California 91773-1750

              
	 
      	
                Telecopier
      No.: 909-394-4785

              
	 
      	 
      
	 
      	
                Copy
      to:James E. Burbott, II

              
	 
      	
                General
      Counsel

              
	 
      	
                WESTERN
      CORPORATE

              
	 
      	
                FEDERAL
      CREDIT UNION

              
	 
      	
                924
      Overland Court

              
	 
      	
                San
      Dimas, California 91773-1750

              
	 
      	
                Telecopier
      No.: (909) 394-6338

              

      

    

    

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

    

    
      
        	 	
                10.

              	
                REIMBURSEMENT
      OF EXPENSES; INDEMNITY.

              

      

    

    

    The Company shall:

    

    (a) 
pay such additional documentation production fees as Lender may require and all
out-of- pocket costs and expenses of Lender, including, without limitation,
reasonable fees and disbursements of counsel, in connection with the amendment,
enforcement and administration of this Agreement, the Note, and other Loan
Documents and the making and repayment of the Advances and the payment of
interest thereon;

    

    (b) 
indemnify, pay, and hold harmless Lender and any holder of the Note from and
against, any and all present and future stamp, documentary and other similar
taxes with respect to the foregoing matters and save Lender and the holder or
holders of the Note harmless from and against any and all liabilities with
respect to or resulting from any delay or omission to pay such taxes;
and

    

    (c) 
indemnify, pay and hold harmless Lender and any of its officers, directors
employees or agents and any subsequent holder of the Note (collectively called
the “Indemnitees”) from and against any and all liabilities, obligations,
losses, damages, penalties, judgments, suits, costs, expenses and disbursements
of any kind or nature whatsoever (including without limitation, the reasonable
fees and disbursements of counsel of the Indemnitees in connection with any
investigative, administrative or judicial proceeding, whether or not such
Indemnitees shall be designated a party thereto) which may be imposed upon,
incurred by or asserted against such Indemnitees in any manner relating to or
arising out of Company’s breach of this Agreement, the Note, or any other Loan
Document or Company’s breach of any of the transactions contemplated hereby or
thereby (the “Indemnified Liabilities”); provided, however, that the Company
shall have no obligation hereunder with respect to Indemnified Liabilities
arising from the negligence or willful misconduct of  and/or the
breach of this Agreement by any such Indemnitees. To the extent that the
undertaking to indemnify, pay and hold harmless as set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, the Company shall contribute the maximum portion which it is permitted
to pay and satisfy under applicable law, to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnitees or any of them.

    

    The
agreement of the Company contained in this Subsection (c) shall survive the
expiration or termination of this Agreement and the payment in full of the Note.
Attorney’s fees and disbursements incurred in enforcing, or on appeal from, a
judgment pursuant hereto shall be recoverable separately from and in addition to
any other amount included in such judgment, and this clause is intended to be
severable from the other provisions of this Agreement and to survive and not be
merged into such judgment.

    

    11.  FINANCIAL
INFORMATION.

    

    All financial statements and reports
furnished to Lender hereunder shall be prepared in accordance with GAAP, applied
on a basis consistent with that applied in preparing the financial statements as
at the end of and for the last fiscal year ended (except to the extent otherwise
required to conform to good accounting practice.)

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    

    12.  MISCELLANEOUS.

    

    12.1  Terms Binding Upon
Successors; Survival of Representations. The terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. All representations, warranties,
covenants and agreements herein contained on the part of the Company shall
survive the making of any Advance and the execution of the Note, and shall be
effective so long as the Commitment is outstanding hereunder or there remain any
obligations to be paid or performed.

    

    12.2  Assignment. This
Agreement may not be assigned by the Company. This Agreement and the Note, along
with Lender’s security interest in any or all of the Collateral, may, at any
time, be transferred or assigned, in whole or in part, by Lender, and, any
assignee thereof may enforce this Agreement, the Note and such security
interest.

    

    12.3  Amendments. Except as
otherwise provided in this Agreement, this Agreement may not be amended,
modified or supplemented unless such amendment, modification or supplement is
set forth in writing signed by the parties hereto.

    

    12.4  Governing Law. This
Agreement and the other Loan Documents shall be governed by the laws of the
State of California, without reference to its principles of conflicts of
laws.

    

    12.5  Relationship of the
Parties. This Agreement provides for the making of Advances by Lender, in
its capacity as a lender, to the Company, in its capacity as a borrower, and for
the payment of interest, repayment of principal by the Company to Lender, and
for the payment of certain fees by the Company to Lender. The relationship
between Lender and the Company is limited to that of creditor/secured party, on
the one hand, and debtor, on the other hand. The provisions herein for
compliance with financial covenants and delivery of financial statements are
intended solely for the benefit of Lender to protect its interests as lender in
assuring payments of interest and repayment of principal and payment of certain
fees, and nothing contained in this Agreement shall be construed as permitting
or obligating Lender to act as a financial or business advisor or consultant to
the Company, as permitting or obligating  Lender to control the
Company or to conduct the Company’s operations, as creating any fiduciary
obligation on the part of Lender to the Company, or as creating any joint
venture, agency, or other relationship between the parties hereto other than as
explicitly and specifically stated in this Agreement. The Company acknowledges
that it has had the opportunity to obtain the advice of experienced counsel of
its own choosing in connection with the negotiation and execution of this
Agreement and to obtain the advice of such counsel with respect to all matters
contained herein. The Company further acknowledges that it is experienced with
respect to financial and credit matters and has made its own independent
decisions to apply to Lender for credit and to execute and deliver this
Agreement.

    

    12.6  Severability. If any
provision of this Agreement shall be declared to be illegal or unenforceable in
any respect, such illegal or unenforceable provision shall be and become
absolutely null and void and of no force and effect as though such provision
were not in fact set forth herein, but all other covenants, terms, conditions
and provisions hereof shall nevertheless continue to be valid and
enforceable.

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

    12.7  Operational Reviews.
From time to time upon request, the Company shall permit Lender or its
representative access to its premises and records, for the purpose of conducting
a review of the Company’s general mortgage business methods, policies, and
procedures, auditing loan files and reviewing financial and operational aspects
of the Company’s business.

    

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

    

    12.9  Entire Agreement.
This Agreement, the Note and the other Loan Documents represent the final
agreement among the parties hereto and thereto with respect to the subject
matter hereof and thereof, and may not be contradicted by evidence of prior or
contemporaneous oral agreements amount such parties. There are no oral
agreements among the parties with respect to the subject matter hereof and
thereof.

    

    12.10  Confidentiality. In
the course of performing its obligations and exercising its rights under this
Agreement, Lender may come into possession of “nonpublic personal information”
of Company's and/or an Investor's natural person “members” or “customers” as
those terms are used in NCUA Regulations at 12 CFR Parts 716 and 748. Lender
acknowledges and agrees that it may not make any use of that information itself,
nor may it disclose that information to the use of any other person or business
with whom Lender deals, except solely as is necessary to carry out the purposes
of this Agreement. Further, Lender agrees to use reasonable efforts to maintain
physical, electronic and procedural safeguards that meet or exceed industry
norms and any applicable legal requirements, to guard member/customer records
and information from any anticipated threats or hazards to the security or
integrity of such records, and protect against unauthorized access to or use of
member/customer records or information that could result in substantial harm or
inconvenience to any member/customer. The types of safeguards, which may be put
in place and which may be used alone or combination with others, include:
firewalls, software tokens, hardware tokens, VPN technology, strong 128-bit
encryption, on-site 24/7 security guards, and electronic badge entry/exit
systems. Further, Lender agrees to adopt and maintain reasonable information
security policies and procedures, which address: internal accounting controls,
operational controls, administrative controls, preventive controls, detective
controls, and corrective controls. This paragraph shall survive the termination
of the Agreement.

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    

    IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed as of the date first above
written.

    

    
      
        	 
      	
                MINISTRY
      PARTNERS INVESTMENT

              
	 
      	
                COMPANY,
      LLC

              
	 
      	 
      
	 
      	
                By: /s/
      Billy Dodson

              
	 
      	
                Billy
      M. Dodson

              
	 
      	
                Its:  President

              
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
                WESTERN
      CORPORATE FEDERAL CREDIT

              
	 
      	
                UNION

              
	 
      	
                By:
      /s/ Joseph
      DeMichele

              
	 
      	
                Joseph
      DeMichele

              
	 
      	
                Its:  Senior
      Vice President, Chief Investment
Officer

              

      

    

    

    

    
      
        
        

      

      
        -31-ex10-2.htm

    Exhibit 10.2

    PROMISSORY
NOTE

    

    
      	 
      	 
      
	
              $
      28,000,000

            	
              Date:
      November 30,  2009

            

    

    

    

    FOR VALUE RECEIVED, the
undersigned, MINISTRY PARTNERS INVESTMENT COMPANY, LLC, a California Limited
Liability Company (herein called the “Company”), hereby promises to pay to the
order of WESTERN CORPORATE FEDERAL CREDIT UNION, a federal corporate credit
union (the “Lender” or, together with its successors and assigns, the “Holder”)
whose principal place of business is 924 Overland Court, San Dimas, California
91773-1750, or at such other place as the Holder may designate from time to
time, the principal sum of Twenty Eight Million Dollars ($28,000,000) or so much
thereof as may be outstanding from time to time pursuant to the Loan and
Security Agreement described below, and to pay interest on said principal sum or
such part thereof as shall remain unpaid from time to time, from the date of the
Advance until repaid in full, and all other fees and charges due under the
Agreement, at the rates and at the times set forth in the
Agreement.

    

    Interest shall accrue at the Fixed Rate
of 3.95% per annum, shall be computed on the basis of a 365-day year and applied
to the actual number of days elapsed in each interest calculation period and
shall be payable monthly in arrears, on the last day of each month, commencing
on December 31, 2009.

    

    In addition to payments on account of
interest, principal reduction payments of $116,667 shall be made on the last day
of each month, commencing with the first such payment due on December 31, 2009,
and with the outstanding principal amount of the Advance payable in full on the
Maturity Date of March 30, 2012.

    

    All payments hereunder shall be made in
lawful money of the United States and in immediately available
funds.

    

    This Note is given to evidence an
actual loan in the above amount and is the Note referred to in that certain Loan
and Security Agreement (the “Agreement”) dated the date hereof between the
Company and Lender, as the same may be amended or supplemented from time to
time, and is entitled to the benefits thereof. Reference is hereby made to the
Agreement (which is incorporated herein by reference as fully and with the same
effect as if set forth herein at length) for a description of the Collateral, a
statement of the covenants and agreements, a statement of the rights and
remedies and securities afforded thereby and other matters contained therein.
Capitalized terms used herein, unless otherwise defined herein, shall have the
meanings given them in the Agreement.

    

    Should
this Note be placed in the hands of attorneys for collection, the Company agrees
to pay, in addition to principal and interest, fees and charges due under the
Agreement, any and all costs of collecting this Note, including reasonable
attorneys’ fees and expenses.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    The Company hereby waives demand,
notice, protest and presentment.

    

    This Note shall be construed and
enforced in accordance with the laws of the State of California, without
reference to its principals of conflicts of law.

    

    IN WITNESS WHEREOF, the
Company has executed this Note as of the day and year first above
written.

    

    
      
        	 
      	
                MINISTRY
      PARTNERS INVESTMENT

              
	 
      	
                COMPANY,
      LLC

              
	 
      	 
      
	 
      	 
      
	 
      	
                By:
       /s/
      Billy Dodson

              
	 
      	
                Billy
      M. Dodson

              
	 
      	
                Its:  President

              

      

    

    

    
      
        
        

      

      
        -2-

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