Document:

ex10-1.htm

    Exhibit 10.1

     

    
      	
              CUSO
      LINE OF CREDIT FACILITY NOTE AND SECURITY AGREEMENT

              (CUSO
      LINE OF CREDIT)

            
	
              LEGAL
      NAME:               Ministry
      Partners Investment Corporation

               

              ADDRESS:                      955
      West Imperial Highway

               

              CITY:                              
       Brea

               

              STATE:                            CA                                           ZIP: 92822

               

              STATE
      OF INCORPORATION:    CA

               

              (hereinafter
      referred to as “CUSO”)

            	
               

              

               

               

               

              4450
      Weaver Parkway

              Warrenville,
      IL 60555

               

              (hereinafter
      referred to as “Members United”)

            

    

    

    FOR VALUE RECEIVED, CUSO
promises to pay to the order of Members United, in lawful money of the United
States and in immediate available funds, the principal sum of ONE HUNDRED MILLION AND NO/00
DOLLARS
-------------------------------------------------------------
($100,000,000.00) and/or the aggregate
unpaid principal amount of all advances made to CUSO by Members United pursuant
to the forgoing Note and Security Agreement (the “Credit Facility”), together
with all relevant attachments, addenda, exhibits and/or schedules, as amended,
extended, supplemented, replaced or modified from time to time (collectively,
the “Agreement”), whichever is greater, on the first to occur (i) demand or (ii)
the maturity date or the expiration date, and to pay interest at the interest
rate herein provided (“Interest”) when due as provided in this Agreement on the
unpaid principal amount until the maturity date.

    

    ADVANCES: CUSO Line of Credit
advances will be interest only during draw period with outstanding to be termed
out over a five-year period with a 30-year amortization period.

    

    Demand Loan and/or a Term
Loan.  A “Demand Loan” is a loan with a maximum term of one (1)
year and a variable rate, with the Wall Street Journal Prime Rate as the index
plus or minus a spread (“Demand Loan Rate”). The maximum Demand Loan fluctuating
rate of Interest as publicly announced from time to time by Members United as
its Demand Loan Rate for a capital shareholder or non-capital shareholder, as
the case may be, will apply with respect to each Demand Loan and corresponding
advances.  With each change in such fluctuating interest rate, the
applicable Demand Loan Rate will correspondingly change and without notice to
CUSO. Any change in the Demand Loan Rate shall be effective as of the opening of
business on the day on which such change in the Demand Loan Rate becomes
effective. A “Term Loan” is a fixed or variable loan that has a set maturity
date not to exceed twelve (12) years. The CUSO, during its draw period, will
accrue interest and the following rate, to be reset each day as quoted by
Bloomberg:

    

    
      	
               
      

            	
              1.

            	
              Fed
      Funds Open + 125 bps

            

    

    

    Once
fully drawn, total outstanding balance to be termed out over a five-year period
with a 30-year amortization period. The term loan rate will be specified by
Members United and will be reprised to a market appropriate fixed or variable
rate to be determined at the time of loan restructure.

    

    Neither a
Demand Loan nor Term Loan may exceed the amount available under the Credit
Facility, minus current outstandings and all other obligations due to Members
United herein (“Maximum Advance Amount”). CUSO may borrow, repay and reborrow
under the Credit Facility up to the expiration date. The expiration date for this Credit
Facility is September 1, 2012 and no advances of any type will be permitted past
this expiration date unless the facility is renewed.  Renewal
of this Credit Facility is at Members United’s sole discretion.  All
advances shall be funded to CUSO’s account, as designated by Members United
(“Account”).

    

    NOTICE AND MANNER OF REQUESTING
ADVANCES: Except for advances made for Settlement purposes (“Settlement”
means payment of any presentment or billing, or credit of any amount, as
requested by Members United or other authorized payee relating to correspondent
services or if authorized by CUSO, relating to any of its goods or other
services provided to CUSO or its members), CUSO shall obtain all Demand Loan
advances hereunder via Members United’s then in effect internet-based cash
management system (currently known as “Members United Corporate Superhighway”) or by
providing Members United either written notice (via US Mail, fax transmission or
e-mail and which is effective upon receipt) or verbal notice via telephone
(effective at the end of the business day of receipt) of any advance
request.  In the case of a Term Loan, CUSO shall obtain all advances,
not to exceed the Maximum Advance Amount, through written notice (via US Mail,
fax transmission or e-mail and which is effective upon receipt) or verbal notice
via telephone (effective at the end of the business day of receipt) specifying
(i) the amount of such advance; and (ii) when applicable, the purpose for the
advance and method of payment, or via the internet-based cash management system
when available.

    

    FUNDING OF THE ADVANCE:
Members United will make the advance available to CUSO by crediting CUSO's
Account held at Members United within a reasonable time after CUSO requests said
advance. CUSO is deemed to have obtained the proceeds of an advance upon funding
to the CUSO’s Account and shall be liable pursuant to this Agreement for the
repayment of any advances upon funding.

    

    CONFIRMATION AND RECORDATION OF THE
ADVANCE: CUSO shall receive confirmation of each advance through monthly
Members United Corporate FCU statements. CUSO authorizes Members United to
record advances made and payments received hereunder in such manner as it may
elect. Such confirmation and recordation, absent manifest error, shall be
conclusive as to the type, principal amount, date, Interest rate, and maturity
date, if any, of each advance.

    

    SETTLEMENT ACCOUNT: At the end
of each day, other than a Saturday, Sunday or other day on which the Federal
Reserve Bank in the federal reserve district where Members United is principally
located is not open for business (“Business Day”), if CUSO’s Account has a
negative balance, CUSO is deemed to have requested an advance in the form of a
Demand Loan herein in the amount of the negative balance.

    

    INTEREST RATE OF DEMAND LOANS AND
TERM LOANS: CUSO shall pay accrued Interest to Members United on the
outstanding principal balance of all Demand Loan advances and Term Loan advances
at a per annum interest rate equal to the Demand Loan Rate or Term Loan Rate in
effect on the date a Demand Loan or Term Loan is made, on the third (3rd) Friday
of each month and said accrued Interest shall be debited from CUSO’s
Account.  Interest at the Demand Loan Rate or Term Loan Rate shall be
calculated on the basis of a 365-day year for the actual number of days
elapsed. Interest
shall continue to accrue until payment is collected.

    

    PRINCIPAL PAYMENTS WITH RESPECT TO
THE CREDIT FACILITY: The principal due under the Credit Facility shall,
in the case of a Demand Loan, be paid on the date of demand or maturity date
and, in the case of a Term Loan, be paid on the maturity date. In addition, if
at any time during the term of the Credit Facility the principal amount of all
advances should exceed the Maximum Advance Amount, principal on all advances
shall accrue interest at a per annum interest rate equal to eighteen (18%)
percent or the highest interest rate allowed under applicable state or Federal
law, whichever is less (“Default Interest Rate”), and Members United may, at its
option, consider such a Default and/or an Event of Default (both hereinafter
defined).

    

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    PREPAYMENT: The principal due with respect to the
Credit Facility which is outstanding as a Term Loan may be prepaid only in full,
and not in part, provided a prepayment penalty is paid based on the then current
prepayment schedule.

    

    METHOD OF PAYMENTS: CUSO
hereby unconditionally and irrevocably authorizes Members United, without notice
or approval, to collect when due all principal, Interest, and other charges due
Members United hereunder by: (i) debiting CUSO's Account from time to time
and/or (ii) making a Demand Loan to CUSO, as Members United may elect in its
sole and absolute discretion. Whenever any payment to be made under this
Agreement shall be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of the payment of
interest.

    

    SECURITY INTEREST: The
indebtedness due or to become due to Members United by CUSO under this Agreement
is secured by CUSO’s property, rights and interests pledged as collateral to
Members United, as acceptable and approved in and maintained at Members United’s
sole and absolute discretion, as indicated below:

     

    CUSO’s
certain commercial real estate mortgage loans, held as collateral,  as
represented by all types of chattel paper and inclusive of tangible chattel
paper, electronic chattel paper and records and includes all cash and non-cash
proceeds and the like thereof and to include any and all specific retail
installment contracts, and/or promissory notes consisting of all the CUSO’s
commercial real estate mortgage loans with its members from “A” to “Z” as more
definitively detailed pursuant to the attached Addenda A and
B.  Specific collateral may be amended and/or updated as approved by
Members United from time to time or more definitively detailed pursuant to
updated ADDENDA A and B as necessary

    
Any
pledged security interests to include all proceeds, profits and products
thereof, all accessions, attachments, additions, and substitutions thereto, all
advances and future advances, increases and increases in profits received
therefrom, cross-collateralization and substitutions of obligations, together
with all other Collateral pledged to Members United by CUSO in all other
agreements entered into between CUSO and Members United, if applicable,
currently in effect and enforceable (as indicated, the
“Collateral”).

    

    TERMS
OF AGREEMENT

    

    DEFINITIONS: The definitions
of various terms and abbreviations in this Agreement are considered standard and
require no additional clarification or highlight unless specifically defined
herein. Unless the context
otherwise requires, all of the terms used herein without definition which are
defined by the Illinois Uniform Commercial Code (the “UCC”) shall have the
meanings assigned to them by the UCC, as in effect on the date of this
Agreement, and as may be supplemented or amended from time to time.

    

    AGREEMENT SURVIVAL: All
representations, warranties and covenants made herein and in any certificates,
resolutions, authorizations or applications delivered pursuant hereto shall
survive the making of the Credit Facility and the execution and delivery of this
Agreement, and shall continue in full force and effect so long as the Credit
Facility is outstanding and/or unpaid.

    

    REPRESENTATIONS
AND WARRANTIES

    

    REPRESENTATIONS AND WARRANTIES OF
CUSO: To induce Members United to enter into this Agreement, CUSO hereby
represents and warrants to Members United the following:

      (a)
State of Incorporation and
Legal Name. CUSO’s state of incorporation and exact legal name are
correctly set forth at the beginning of this Agreement.

      (b) Corporate Existence. CUSO is
duly organized and validly existing in good standing in all applicable
jurisdictions with full power and authority to do all things required of it
under this Agreement.

      (c)
Approval. No
authorization, approval, license, or registration with any third party
(including NCUA) is or will be necessary for the valid execution, delivery, or
performance by CUSO hereunder.

      (d)
Legal Enforceability.
The signatory of this Agreement is the CUSO’s authorized
representative, has duly and properly executed this Agreement, and this
Agreement constitutes a binding obligation of CUSO, enforceable on its
terms.

      (e)
No Conflicting
Agreements. The execution, delivery and performance by CUSO under this
Agreement will not be in conflict with, result in a breach of or have a material
adverse effect on CUSO with regards to any order, rule, regulation, award,
indenture, contract, agreement, charter, bylaw or other instrument.

      (f)
Financial Statements.
The financial statements furnished by CUSO to Members United are true and
complete and fairly portray its financial condition as of the dates of such
statements, and there have been no material adverse changes in the condition or
operation of CUSO following said date.

      (g)
Taxes. CUSO is either
exempt from Federal, state or local taxes or has otherwise filed all Federal,
state, and local tax returns required to be filed by it and paid all taxes,
interest and penalties due.

      (h)
Accuracy of
Information.  All information supplied by CUSO to Members
United in connection with this Agreement is accurate and not misleading as of
the date supplied, and contains no misstatement of a material fact, or an
omission or failure to state a material fact.

      (i) No Defaults.  No
event has occurred which constitutes or would constitute a Default and/or an
Event of Default (both hereinafter defined).

      (j)
No Defaults On Outstanding
Judgments/Orders. CUSO has satisfied and/or is not in Default with
respect to any judgment, writ, decree, rule or regulation of any person or
entity with jurisdiction over CUSO.

      (k)
Outstanding
Indebtedness. CUSO has no outstanding indebtedness, except as disclosed
to Members United prior to the execution and delivery of this Agreement, and
there exists no default under the provisions of any instrument evidencing such
indebtedness or under the provisions of any agreement relating
thereto.

      (l)
Litigation.  There
is no action, litigation, suit, proceeding, inquiry or investigation before or
by any person or entity, which involves the possibility of materially or
adversely effecting CUSO.

      (m)
Liens.  The
security interest granted by CUSO to Members United herein constitutes a valid
and binding first lien on the assigned Collateral and shall continue as security
for all of the CUSO’s obligations.

      (n)
Ownership of Assets.
CUSO has the requisite power and authority to own its assets and has good and
marketable title to all of its assets, including, but not limited to, the
Collateral, and such assets are not subject to any liens other than the liens
granted hereunder.

      (o)
Labor Disputes, Acts of
God.  CUSO's
business and its properties are not and have not been affected by fire,
explosion, accidents, strikes, lockouts or other labor disputes, drought, storm,
earthquake, embargo, act of God, invasion or casualty, which would presently,
materially and adversely affect CUSO’s operations.

      (p)
Certification of
CUSO.  CUSO certifies that it does not own or control any
property or asset located in, have employees or facilities located in, provide
goods or services to, obtain goods or services from, have distribution
agreements with, issue credits or loans to, purchase bonds or commercial paper
issued by, or invest in (a) the Republic of Sudan or (b) any company domiciled
in the Republic of the Sudan.

    

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    DEFAULT
AND/OR EVENT OF DEFAULT

    

    DEFAULT OR
EVENT OF DEFAULT: The occurrence of any of the following events shall
constitute a “Default” and/or an “Event of Default”:

      (a)
Failure to Pay. CUSO’s
nonpayment of any amount or obligation due under this Agreement.

      (b)
Non-Performance.  CUSO’s
failure to perform or comply with any act, term, duty, condition or provision of
this Agreement, including but not limited to CUSO’s failure to comply with any
reasonable request of Members United as herein provided.

      (c)
Covenants and
Agreements. CUSO’s failure to perform or comply with any of the covenants
herein.

      (d)
Information, Representations
and Warranties. If any representations or warranty made herein, or if any
information contained in any financial statement, application, schedule, report
or any other document given by or on behalf of CUSO in connection with the
obligations herein, with the Collateral, or with any of the provisions herein is
not in all respects true and accurate or which proves or becomes false and/or
misleading in any material respect.

      (e)
Default under Members United
Agreements. The occurrence of a default or event of default by CUSO in
any other agreements, loan agreements, notes, and security agreements, currently
effective or hereinafter entered into by and between Members United and
CUSO.

      (f)
Governmental Control.
The suspension or taking of possession of CUSO’s business, or the revocation of
CUSO’s charter by a governmental or insuring authority.

      (g)
Adverse Change in Financial
Condition. The determination in good faith by Members United that a
material adverse change has occurred in the financial condition of CUSO from the
conditions set forth in the most recent financial statement of
CUSO.

      (h)
Adverse Change in the Value of
Collateral. The determination in good faith by Members United that the
security for the obligations herein has become inadequate, or collateral pledged
is encumbered, levied upon, seized or attached pursuant to the actions of a
third party.

      (i)  Prospect of Payment or
Performance.  The determination in good

    faith by
Members United that the prospect for payment or performance of any of the
obligations herein is impaired for any reason.

      (j)
Financial Statements.
CUSO procures or allows for an enforceable financing statement, securing a lien
on the Collateral pledged herein, to be filed or to remain on file with an
applicable filing agency in opposition to Members United’s secured interest
herein.

      (k)
Bankruptcy, Insolvency, Etc.
CUSO should (i) merge, consolidate, reorganize, discontinue, dissolve or
terminate business, (ii) make an assignment for the benefit of creditors,
(iii) petition or apply to any tribunal for the appointment of a custodian,
receiver or trustee of all or a substantial part of its assets, (iv) shall
generally not, or shall be unable to, or shall admit in writing its inability to
pay its debts as such debts become due, (v) commence any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or
liquidation law, (vi) have any such petition, application filed or proceeding
commenced against it, (vii) by act or omission, indicate consent to, approval
of, or acquiescence in any such petition, application, proceeding, order for
relief, or appointment, (viii) suffer any such custodian, receivership or
trustee to continue undischarged for thirty (30) days, or suffer or permit to
continue unstayed and in effect for thirty (30) days, any judgment entered by
any person or entity against CUSO, or (ix) have any action commenced against it
by the NCUA or any person or entity having jurisdiction over CUSO to revoke,
limit or restrict CUSO’s Charter, and/or any of the rights or powers
thereunder.

      (l)
Invalidity of Agreement.
This Agreement ceases to be in full force and effect for any reason,
declared to be null and void, the validity or enforceability thereof is
contested by CUSO or CUSO denies any further liability or obligation under this
Agreement.

      (m)
Termination of
Membership. The voluntary or involuntary termination of CUSO’s membership
in or at Members United Corporate FCU.

      (n)
Insecurity.  Members
United deems itself insecure for any reason.

      (o)
Substituted
Security.  CUSO fails to provide any additional or substituted
security requested by Members United.

    

    REMEDIES/RIGHTS
OF MEMBERS UNITED

    

    RIGHTS AND
REMEDIES OF MEMBERS UNITED: Upon and after the occurrence of a Default
and/or Event of Default, Members United may, without notice or demand, which are
hereby waived, exercise in any jurisdiction in which enforcement hereof is
sought, the following rights and remedies, in addition to the rights and
remedies of a secured party under the UCC and all other rights and remedies
available to Members United under applicable law. All such rights and remedies
are cumulative and enforceable alternatively, successively or
concurrently.

      (a) Terminate
the Credit Facility to CUSO.

      (b)
Declare the Note, all Interest accrued and unpaid thereon and all other
obligations or indebtedness to be immediately due and payable without
presentment, demand for payment, protest or notice of any kind, all of which are
hereby expressly waived by CUSO.

      (c)
Declare all other agreements, loan agreements, notes, and security agreements,
currently effective or hereinafter entered into between  Members
United and CUSO in default and/or terminated as provided therein.

      (d)
Members United may, but is not obligated to, perform any or all of its duties
and obligations herein.

      (e)
Take possession of the Collateral, and for the purpose, so far as CUSO may give
authority therefore, enter upon any premises on which the Collateral or any part
thereof may be situated and remove the same therefrom without any liability for
suit, action or other proceeding, DEBTOR HEREBY WAIVING ANY AND ALL RIGHT TO
PRIOR NOTICE AND TO JUDICIAL HEARING WITH RESPECT TO REPOSSESSION OF COLLATERAL,
and Members United may require CUSO, at CUSO’s expense, to assemble and deliver
the Collateral to places as Members United may designate.

      (f)
Enforce CUSO’s rights against any account debtors and other
obligors.

      (g)
Cease making advances hereunder and under any other commitments and credit
accommodations of Members United to CUSO and stop and retract the making of any
advances hereunder or thereunder which may be requested by CUSO.

      (h)
Demand, collect and sue on any of the Collateral, in either CUSO’s or Members
United’s name, at Members United’s sole discretion, with the right to enforce,
compromise, settle or discharge the Collateral, and may endorse CUSO’s name on
any and all checks, commercial paper, and any other instruments pertaining to or
constituting the Collateral.

      (i)
Verify all Collateral in any manner and medium Members United may consider
appropriate. CUSO agrees to furnish all assistance and information and perform
any act(s) which Members United may require in connection
therewith.

      (j)
Require CUSO to gather collateral and make it reasonably available to Members
United.

    

    CUMULATIVE RIGHTS AND
REMEDIES: The rights and remedies of Members United provided herein are
cumulative and not exclusive of any other rights or remedies provided by law
and/or available in equity.

    COVENANTS

    

    AFFIRMATIVE COVENANTS: CUSO
covenants and agrees that, until (i) all obligations have been paid in full, and
(ii) there exists no commitment by or to Members United which could give rise to
any obligations, CUSO will:

      (a)
Preservation of Corporate
Existence. Preserve, protect, maintain, renew and keep in full force and
effect CUSO's existence as a Federal or state chartered CUSO.

      (b)  Name or Address Change.
Promptly notify Members United in writing of any name change or address change
of CUSO within ten (10) business days of said change.

      (c) Liens and Encumbrances. Keep
the Collateral free and clear of all liens, security interests or encumbrances
of any kind, except as granted herein, and at CUSO’s expense, defend the
Collateral against all claims and demands by persons or entities claiming the
Collateral or any interest therein or lien thereon, and prevent any action which
might impair the Collateral and/or hinder, obstruct or delay Members United in
the exercise of any right or remedy provided under this Agreement.

      (d)
Taxes, Claims, etc.
Maintain its tax exempt status and/or otherwise pay and discharge all
taxes or claims which, if unpaid, might become a lien or charge against any of
CUSO's properties or assets.

    
      
        
        

      

      
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      (e)
Inspection of Records.
Permit Members United to examine and make copies of and abstracts from
the records, books, and accounts of CUSO, and visit the properties of CUSO with
reasonable notice and to discuss the operation of CUSO with any of its officers,
directors, employees, advisors, accountants or other consultants and/or
representatives.

      (f)
Keeping of Records and Books of
Account. At all times keep accurate records/books with complete entries
made in accordance with local standards and those of the NCUA, reflecting the
operation of CUSO.

      (g)
Payment. Make full and
timely payment of the principal, interest, and all other charges due on or with
respect to this Agreement and all other indebtedness of CUSO to Members United
or any other person or entity.

      (h)
Compliance with Laws.
Conduct business and maintain, in all material respects, both as to its
operations, properties and assets, compliance with all applicable Federal, state
and local laws, regulations, ordinances, rules, and orders (including those of
the NCUA).

      (i)
Conduct of Business.
Conduct its business in an efficient and economical manner.

      (j)
Financial Statements. As
requested by Members United, furnish at least (i) annual (audited if applicable)
financial statements including, but not limited to, balance sheets, income
statements, cash flow statements, delinquency reports and charge off reports,
not later than ninety (90) days after the close of CUSO’s fiscal year, (ii) all
additional required financial statements and related requirements with regards
to the Collateral as set forth herein as ADDENDUM “A” and “B”, where
applicable, and (iii) those additional financial statements that Members United
may require and request from time to time.

      (k)
Financial Covenants.
Comply with any and all financial covenants, if applicable as described in ADDENDUM “C” including, but
not limited to, any financial ratios as set forth herein as ADDENDUM “C” if
applicable.

      (l)
Reports. Furnish to
Members United all reports, letters, memorandums, notices and instrumentality
that Members United may reasonably request with regards to CUSO’s financial
condition, properties, assets, the Collateral or business operation and as
described on ADDENDUM “A” and
“B”, if applicable.

      (m)
Extraordinary Loss.
Promptly notify Members United in writing within seven (7) business days of any
event causing extraordinary loss or depreciation of the value of CUSO’s assets
(whether or not insured) and the facts with respect thereto.

      (n)
Members United as
Depository. Maintain Members United as its principal depository for its
deposit and other commercial accounts.

    

    NEGATIVE COVENANTS: CUSO
covenants and agrees that, until (i) all obligations have been paid in full and
(ii) there exists no commitment by Members United which could give rise to any
obligations, CUSO will not, directly or indirectly, without Members United’s
prior written consent do any of the following:

      (a)
Liens, etc. Create,
incur, assume, or suffer to exist, any lien or other charge or encumbrance of
any nature, upon or with respect to any of the Collateral, now owned or
hereafter acquired.

      (b)
Indebtedness. Create,
incur, assume, or suffer to exist, any indebtedness, including capitalized
leases, except: (i) under this Agreement, and (ii) indebtedness in the ordinary
course of business as further explained in Addendum A further explained in
Addendum A.

      (c)
Mergers, Etc. Permit any
person or entity to acquire all or substantially all of CUSO's property and/or
assets or consolidate with or merge into any other person or entity or permit
any other person or entity to merge into it.

      (d)
Sales of Assets, Etc.
Sell, transfer, assign, lease, or dispose of all or a substantial part of its
properties/assets, except those assets negotiated in the ordinary course of
business as further explained in Addendum A further explained in Addendum
A.

      (e)
Alteration of Business.
Materially alter the nature of CUSO's business from that of a Federal or State
chartered CUSO or change the name or primary address of the CUSO.

      (f)
Trade
Names.  Use any trade name other than CUSO’s true and complete
corporate name as set forth in the beginning of this Agreement.

    

    SECURITY
AGREEMENT

    

    SECURITY
INTEREST: As security for the payment and performance of all obligations,
present and future, whether or not any instrument or agreement relating to any
obligation specifically refers to this Agreement or the security interest
created hereunder, including, without limitation, any sums advanced by Members
United for taxes, assessments, insurance, filing, recording, and searches or
verifications of the records thereof, CUSO hereby assigns, pledges and grants to
Members United a lien on and continuing security interest in the Collateral.
CUSO acknowledges, ratifies and confirms the security interest herein and in any
prior agreements between Members United and CUSO where this Agreement is a
renewal, modification or amendment of said prior agreement. Members United’s
security interest shall continually exist until (i) all obligations have been
paid in full and (ii) there exists no commitment by or to Members United which
could give rise to any further obligations. No release or surrender of
particular Collateral herein shall cause the release or surrender of any other
Collateral herein pledged.

    

    COVENANTS & REPRESENTATIONS
CONCERNING COLLATERAL: With respect to all of the Collateral, CUSO
covenants, warrants and represents that:

      (a)
Financing Statements. No
financing statement is on file in any public office covering any of the
Collateral pledged herein except as permitted in this Agreement. CUSO authorizes
Members United to file financing statements, amendments and continuation
statements covering the Collateral to protect Members United’s interest herein.
CUSO agrees to pay all taxes, fees and costs (including reasonable attorney’s
fees) paid or incurred by Members United in connection with the preparation,
filing or recordation thereof. CUSO will not file any amendments, correction
statements or termination statements concerning the Collateral without the prior
written consent of Members United.

      (b)
First Priority Lien. The
security interest granted to Members United hereunder shall constitute a first
priority lien upon the Collateral. CUSO will not, without Members United’s prior
written consent, transfer, discount, sell, grant or assign any interest in the
Collateral, or permit any other lien to be created or remain thereon, not herein
provided for.

      (c)
Inspection and
Recordation. At all reasonable times, Members United and its agents and
designees may enter CUSO’s facilities and inspect the Collateral in the
possession of CUSO and all books and records of CUSO (in whatever form). CUSO
shall pay the costs of such inspections. CUSO shall make notations, satisfactory
to Members United, on its books and records disclosing the existence of Members
United’s security interest in the Collateral.

      (d)
Litigation. CUSO will
promptly notify Members United in writing of any litigation or claim involving
or affecting the Collateral which CUSO knows or has reason to believe is pending
or threatened. CUSO shall defend the Collateral, at its own expense, against all
claims and demands of any person or entity claiming any interest in the
Collateral adverse to Members United.

       (e)
Further Acts. CUSO shall
do, make, execute and deliver all such additional documents as Members United
may request to vest in and assure to Members United its rights hereunder or in
any of the Collateral.

    

    POSSESSION
OF COLLATERAL: The Collateral will be located at and remain in the
possession of Members United, unless otherwise directed by Members United in
sole and absolute discretion. In the event CUSO, its agents or assigns, is in
possession of the Collateral herein, CUSO may, subject to all limitations
herein, maintain possession of and utilize it in any lawful manner not
inconsistent with this Agreement, until a Default or Event of Default or as
otherwise requested by Members United. Upon a Default or Event of Default or
upon the request of Members United, Members United shall have the right to
immediate possession of the Collateral.

    

    REGISTERED
HOLDER OF COLLATERAL: If any of the Collateral consists of investment
securities, CUSO authorizes Members United to transfer the same into its own
name or that of its nominee, and Members United may appear of record as the sole
owner thereof. So long as no Default or Event of Default has occurred, Members
United shall deliver promptly to CUSO all notices, statements or other
communications received by it or its nominee as registered owner, and upon
demand and receipt of payment of necessary expenses thereof, shall issue to CUSO
a proxy to vote and take all action with respect to such instruments.
Notwithstanding the foregoing, failure by Members United to deliver any notice
to CUSO herein shall not effect the validity of this Agreement or Members
United’s interest in the Collateral. After the occurrence of any Default or
Event of Default, CUSO waives all rights to be advised of or to receive said
notices, statements or communications and agrees that no proxies issued by
Members United as aforesaid shall be effective thereafter.

    

    FURTHER
SECURITY FOR PAYMENT: At Members United’s sole and absolute
discretion, CUSO grants
and pledges to Members United, as further and additional security herein, a
security interest in and lien on all property or assets of CUSO which is or may
be in the possession or control of Members United in any capacity, including,
without limitation, all monies owed or to be owed by Members United to CUSO.
With respect such property or assets, Members United shall have the same rights
as it has with respect to the Collateral herein.

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    AUTHORIZATION AND POWER OF
ATTORNEY: CUSO
authorizes Members United to request other secured parties of CUSO to provide
accountings, confirmations of Collateral and confirmations of statements of
account concerning CUSO. CUSO hereby designates and appoints Members United and
its designees as attorney-in-fact of CUSO, irrevocably and with power of
substitution, with authority to endorse CUSO’s name on requests to other secured
parties of CUSO for accountings, confirmations of collateral and confirmations
of statements of account.

     

    MISCELLANEOUS

    

    APPOINTMENTS
OF MEMBERS UNITED BY CUSO: The powers herein granted are coupled with an
interest and are irrevocable.

      (a)
CUSO hereby appoints Members United as its lawful attorney-in-fact, with the
full power of substitution, in its name, place and stead, to take all actions
with respect to Collateral including, but not limited to: the sale of Collateral
following notice to CUSO of a Default or Event of Default; execution, filing,
amendment of and continuation of such instruments, documents and agreements as
provided for in the UCC, without the signature or authorization of CUSO; if
Members United so elects, to perform all other acts which Members United deems
appropriate to perfect, maintain and preserve the interest of Members United in
the Collateral; and exercise such other rights as Members United may be accorded
under the UCC.

      (b)
CUSO hereby irrevocably and unconditionally appoints Members United as its agent
with full power, in the same manner, extent and effect as if CUSO were to do the
same:  (i) receive, collect and direct all mail addressed to CUSO,
(ii) open such mail, (iii) remove all contents therefrom, (iv) retain all
contents constituting or relating to the Collateral, (v) and perform all other
acts which Members United deems appropriate to protect and preserve the
Collateral. The agency hereunder shall not terminate until the obligation is
paid in full.

    

    AUTHORIZED PERSON: Members
United shall have no liability to CUSO in acting upon any notice, request or
signature referred to herein which Members United believes in good faith has
been given by a person authorized by CUSO to request advances hereunder, without
further assurance, investigation or liability.  A resolution or
certificate of authority authorizing CUSO, and the officers and other designated
individuals on behalf of CUSO, to act herein was provided to Members United, and
will be supplemented by CUSO as necessary and applicable.

    

    FURTHER
ASSURANCES.  Upon any request of Members United, CUSO will act
or execute and deliver such other instruments, documents and agreements as
Members United may request to effectuate this Agreement.

    

    WAIVER BY MEMBERS UNITED:
Neither any failure nor any delay on the part of Members United in
exercising any right, power or remedy hereunder, under the Agreement or under
applicable law shall operate as a waiver thereof, nor shall a single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or remedy.

    

    MEMBERS UNITED’S SETOFF:
Members United shall have the right, in addition to all other rights and
remedies available to it following a Default and/or Event of Default, to setoff
against any obligations due Members United any debt owing to CUSO by Members
United, including without limitation, any funds in any checking or other account
now or hereafter maintained by CUSO at Members United. CUSO hereby confirms
Members United’s right to banker’s lien and setoff, and nothing in this
Agreement shall be deemed a waiver or prohibition of Members United’s right of
banker’s lien and setoff.

    

    WAIVER BY CUSO: CUSO hereby
waives, to the extent the same may be waived under applicable law, presentment,
protest, demand, diligence, notice of dishonor and of nonpayment, and waives and
renounces all rights to the benefits of any statute of limitations and any
moratorium, appraisement, and exemption now provided or which may hereafter be
provided by any Federal or state statute, both as to itself personally and as to
all of its property, whether real or personal, against the enforcement and
collection of the obligations evidenced by this Agreement.

    

    NOTICE:
Unless otherwise provided, all notices, demands, requests, waivers and
other communications provided for herein shall be in writing and sufficiently
given, (i) if by mail, three (3) days after being deposited in the U.S. mail,
first class and addressed as set forth herein or to such other address as each
party shall notify the other or (ii) if by any acceptable electronic
communication system, when received. Notwithstanding anything to the contrary,
all notices and demands for payment from CUSO actually received by CUSO shall be
considered to be effective upon receipt thereof by CUSO regardless of the
procedure or method utilized to accomplish such delivery thereof to
CUSO.

    

    COSTS, EXPENSES AND TAXES:
CUSO agrees to pay on demand all costs, expenses, taxes and fees
incurred, or determined to be payable, including all reasonable attorney’s fees
and expenses and costs paid or incurred by Members United in exercising or
enforcing any of its rights and remedies herein, together with out-of-pocket
expenses and collection costs, incurred or paid by Members United in enforcing,
exercising, preserving, securing, perfecting and/or maintaining any right or
remedy of Members United herein, including interests in Collateral, or the
failure by CUSO to perform or observe any of the provisions hereof, whether or
not a suit or proceeding be initiated, including those incurred in any
bankruptcy or insolvency proceeding. All amounts so expended by Members United
shall be deemed secured by the security interest herein and shall bear interest
from the date paid by Members United at the highest Interest rate herein until
paid in full.

    

    BINDING EFFECT;
ASSIGNMENT:  This Agreement shall be binding upon and inure to
the benefit of CUSO and Members United, and their respective, successors,
assigns and transferees, except CUSO shall not have the right to assign or
transfer its rights and obligations under this Agreement without the express
prior written consent of Members United. Members United may assign or transfer
its rights and interests hereunder to any person or entity without
restriction.

    

    GOVERNING LAW: This Agreement
shall be governed by, construed and enforced in accordance with the laws of the
State of Illinois without regard to the principles of conflicts of
law.  If the laws applicable to Members United permit it to charge or
collect a higher rate of interest than the laws of the State of Illinois allow,
then such law applicable to Members United shall apply to the allowable interest
rate and Default Interest Rate.

    

    SEVERABILITY OF PROVISIONS:
The invalidity or unenforceability of any clause or part of this
Agreement shall not effect the validity or enforceability of any other clause or
part hereof.

    

    WAIVER OF JURY TRIAL; VENUE; ETC.:
MEMBERS UNITED AND CUSO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, LITIGATION, SUIT OR PROCEEDING OR
COUNTERCLAIM IN ANY COURT ARISING IN CONNECTION WITH, OUT OF OR OTHERWISE IN
RELATION TO THIS AGREEMENT. FURTHER, CUSO HEREBY IRREVOCABLY SUBMITS, IN ANY
LEGAL PROCEEDING RELATING TO THIS AGREEMENT, TO THE NONEXCLUSIVE, IN PERSONAM JURISDICTION OF
ANY ILLINOIS STATE OR UNITED STATES COURT OF COMPETENT JURISDICTION SITTING IN
THE STATE OF ILLINOIS, COUNTY OF DUPAGE AND AGREES TO SUIT BEING BROUGHT IN ANY
SUCH COURT. CUSO REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE
SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER.

    

    INDEMNIFICATION:
CUSO and Members United agree to indemnify, defend and hold each other
harmless against any and all losses, claims, liabilities, costs and expenses,
including reasonable attorney’s fees, by whomever made, or by reason of reckless
or negligent conduct in the performance of their duties and responsibilities
under this Agreement.  In no event shall either party, their
affiliates, officers, directors, employees, representatives, agents and/or
independent contractors be liable to each other under any legal or equitable
theory for compensation, damages, reimbursement for investments or expenses,
lost profits, incidental or consequential damages arising out of their
obligations/responsibilities under this Agreement.

    

    CONFIDENTIALITY: Members United and CUSO
acknowledge that each may disclose confidential information to the other which
pertains to the disclosing entity’s business. Each agrees to protect and
safeguard all information and materials disclosed as confidential information.
Members United and CUSO agree that any violation of this section may cause
irreparable damage to the other and that remedies at law for such violation are
inadequate. In addition to other remedies available, the parties shall have the
right to take all reasonable steps to protect its confidential information,
including injunctive relief and other remedies available at law or in equity.
The provisions in this section shall survive the termination or expiration of
this Agreement.

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    MERGER AND
INTEGRATION: This Agreement and the attached Exhibits/Schedules (if any)
contain the entire agreement of the parties hereto. Members United may amend,
modify, rescind, waive or release any provision herein, unless otherwise
provided, by notice to CUSO. No notice to or demand upon CUSO in any case shall
entitle CUSO to any other or further notice or demand in the same, similar or
other circumstances.

    

    

    HEADINGS: The paragraph
headings herein are for convenience and reference
only and shall not constitute a part of this Agreement nor operate to
control, change, modify or limit any of the terms herein.

    

    

     The
CUSO signed this Agreement as of May 14, 2008.

    

    

    Accepted
by:

    

    
      	
              MEMBERS
      UNITED CORPORATE
      FCU

            	
              MINISTRY PARTNERS
      INVESTMENT
      CORPORATION

            
	 
      	 
      
	
              Name:
      ____________________________________

            	
              By:
      __________________________________________

            
	 
      	 
      
	
              Name:
      Linda
      Cesare                                                              

            	
              Name:
      ________________________________________

            
	 
      	 
      
	
              Title:    Vice President,
      Participations                               
      

            	
              Title:_________________________________________

            

    

    

    

    

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    

    

    
 

    ADDENDUM
“A”

    COLLATERAL DESCRIPTION,
REPORTING AND DOCUMENTATION REQUIREMENTS

    

    

    In consideration of the promises and
other good and valuable consideration acknowledged and exchanged between the
parties and as set forth in the executed Committed Line of Credit Facility Note
and Security Agreement, together with this and all other relevant attachments,
addenda, exhibits and/or schedules (collectively, the “Agreement”), entered into
by and between MINISTRY
PARTNERS INVESTMENT CORPORATION (the “CUSO”) and MEMBERS UNITED CORPORATE FEDERAL
CREDIT UNION (“Members United”), CUSO pledges all of its property, rights
and interest in:

    

    CUSO’s
certain commercial real estate mortgage loans, held as collateral, as
represented by all types of chattel paper and inclusive of tangible chattel
paper, electronic chattel paper and records and includes all cash and non-cash
proceeds and the like thereof and to include any and all specific retail
installment contracts, and/or promissory notes consisting of all the CUSO’s
commercial real estate mortgage loans with its members from “A” to
“Z”.  Specific types of this collateral may be amended and/or updated
as designated by Members United from time to time or more definitively detailed
pursuant to the attached ADDENDUM “B” as necessary.

    

    If
the Collateral used to secure this Credit Facility and any other Credit Facility
is specifically the CUSO’s commercial real estate
mortgage loans portfolio, as described herein, therefore the Maximum
Advance Amount as compared to the total value of all of the Collateral can never
be more than 90% of the Maximum Advance Amount of this Credit Facility or any
other cross-collateralized Credit Facility as calculated by Members United in
its sole discretion.

    

    CUSO
hereby agrees and covenants to provide and supplement detailed lists and/or
balance sheet of the majority of then outstanding pledged Collateral herein or
all pledged Collateral in the case of Installment Loans, together with and
subject to, all further requirements below, as indicated by Members United, as
such may be amended from time to time in Members United’s sole discretion, as if
said additional requirements were set forth in full in the substantive text of
the Agreement. The parties hereby acknowledge that any documentation and/or
listing required herein is solely for the benefit of Members United and, except
for Installment Loans pledged as collateral herein, said documentation and/or
listing provided herein will not in any way limit, reduce or minimize the
Collateral pledged by CUSO in connection with this Credit Facility.

    

    This
ADDENDUM A is effective upon receipt of by the CUSO.  CUSO shall also
comply with the following additional requirements:

    

    
      	
               
      

            	
              1.

            	
              Annual Financial
      Statements:  CUSO shall provide a copy of all (GAAP
      prepared) annual fiscal year-end financial statements, including a balance
      sheet, income statement, cash flow statement, delinquency reports, charge
      off reports, audit notes and if necessary, management
    reports.

            

    

    

    
      	
               
      

            	
              Ø

            	
              Yearly:  Not later
      than ninety (90) days after the close of each fiscal
      year-end.

            

    

    

    
      	
               
      

            	
              2.

            	
              Quarterly Financial
      Statements:  CUSO shall provide a copy of all (GAAP
      prepared) quarterly financial statements, including a balance sheet,
      income statement, cash flow statement, delinquency reports, charge off
      reports, audit notes and if necessary, management
  reports.

            

    

    

    
      	
               
      

            	
              3.

            	
              Portfolio Inventory
      Listing:  CUSO will provide a detailed listing to Members
      United of the majority of all outstanding pledged
      Collateral.  The inventory listing must
      include:  Account Number, Name, Date of Loan, Loan Type,
      Amortization Method, Frequency of Payment, interest Rate, Original Amount
      Financed, Current Balance, Original Term, Remaining Term, Monthly Payment,
      Last Payment Date, Maturity Date, Next Payment Date, Appraised Value, Loan
      to Value, and Debt Service Coverage Ratio.  The report must be
      received by Members United as
follows:

            

    

    

    
      	
               
      

            	
              Ø

            	
              Quarterly.  Not later
      than 30 days after the close of each
  quarter.

            

    

    

    
      	
               
      

            	
              Ø

            	
              Prior To Each New
      Advance

            

    

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              4.

            	
              Minimum Pledged Collateral to
      Loan Value for this Credit Facility and/or as cross collateralized with
      all other facilities:  CUSO has pledged an initial
      $5,000,000 in Commercial Real Estate Loans as collateral for the Credit
      Facility. Each subsequent advance under the Credit Facility shall be at a
      maximum margin of 90% of the outstanding principal balance of the pledged
      collateral as set forth below and monitored by Members United in its sole
      an absolute discretion.

            

    

    

    
      	
               
      

            	
              5.

            	
              Security and Segregation of
      Collateral:  CUSO may be required by Members United, in
      the case of Members United’s insecurity as based on the deterioration of
      the financial condition of the CUSO and/or deterioration of the collateral
      value as it relates to any of the Credit Facilities of the CUSO and which
      may result in a loss to Members United, to make notations satisfactory to
      Members United on all its books and records that pertain to the Collateral
      disclosing the existence of Members United’s security interest in the
      Collateral.  CUSO may also be required to segregate the entire
      commercial real estate mortgage loan portfolio in a separate set of filing
      cabinets, away from any similar installment contracts and/or loans
      otherwise held by CUSO, and clearly marked all file cabinet drawers
      containing the tangible commercial real estate mortgage loan documents
      with the following:  “THESE COMMERICAL REAL ESATE MORTGAGE LOANS
      ARE HELD AS COLLATERAL FOR MEMBERS UNITED CORPORATE FCU.”  Any
      of the CUSO’s electronic loan documents that relate to the specific
      collateral pledged and cross collateralized as security should be
      similarly marked as follows:  “THIS COMMERCIAL REAL ESTATE
      MORTGAGE LOAN IS HELD AS COLLATERAL FOR MEMBERS UNITED CORPORATE
      FCU.”  The CUSO may be required to complete this segregation and
      marking of the commercial real estate mortgage loan portfolio pledged
      herein and cross collateralized in any other credit facility no later than
      30 days after the execution of this Agreement or within any time-frame as
      established by Members United in its sole and absolute
      discretion.

               

            

    

    
      	
               
      

            	
              6.

            	
              Ordinary Course of
      Business:  Ordinary course of business includes
      borrowings under BMO Line of Credit, debt securities salea, and other
      indebtedness used for purchasing or funding
  loans.

            

    

    

    
 

    

    
      
        
        

      

      
        -8-ex4_1.htm

    ROSS
MILLER

    Secretary
of State

    206
North Carson Street

    Carson
City, Nevada 89701-4299

    (775)
684 5708

    Website:
secretaryofstate.biz

    

     

    Certificate
of Designation

     

     (PURSUANT
TO NRS 78.1955)

     

    
      	
              USE
      BLACK INK ONLY-DO NOT HIGHLIGHT

            
	
              Certificate of
      Designation

            
	
              For Nevada Profit
      Corporations

            
	
              (Pursuant
      to NRS 78.1955)

            
	 
      
	
              1.

            	
              Name
      of corporation:

            
	 
      	RM
      Health International, Inc.
	 
      	 
      
	
              2.

            	
              By
      resolution of the board of directors pursuant to a provision in the
      articles of incorporation, this certificate establishes the following
      regarding the voting powers, designations, preferences, limitations,
      restrictions and relative rights of the following class or series of
      stock.

            
	 
      	

               

              RESOLVED:  that
      pursuant to the authority granted to and vested in the Board in accordance
      with the provisions of the Corporation’s Articles of Incorporation, a
      series of preferred stock of the Corporation is hereby created and
      designated with the following relative rights, preferences, privileges,
      qualifications, limitations, and
      restrictions:

               

              1. Designation
      and Number.  There shall be a series of preferred stock,
      par value $0.001 per shares, designated as “Series A Preferred Stock,” and
      the number of shares constituting such series shall be Four Hundred
      Thousand (400,000).

               

              See additional page.

               

            
	 
      	 
      
	
              3.

            	
              Effective
      date of filing (optional):

            
	 
      	 
      
	
              4.

            	
              Officer
      Signature (Required): 

            
	 
      	 
      
	 
      	
              X
      /s/ Randy Weston

            
	 
      	
              Signature

            

    

     

    
       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    RM
HEALTH INTERNATIONAL, INC.

    

    CERTIFICATE
OF DESIGNATION OF

    SERIES
A PREFERRED STOCK

    

    The
Undersigned, on behalf of RM Health International, Inc., a Nevada corporation
(the “Corporation”), hereby certifies that the following resolutions were
adopted by the Corporation’s board of directors effective as of May 16, 2008,
pursuant to the authority conferred upon the Board by the Corporation’s Articles
of Incorporation and in accordance with the Nevada Revised
Statutes:

     

    RESOLVED:  that
pursuant to the authority granted to and vested in the Board in accordance with
the provisions of the Corporation’s Articles of Incorporation, a series of
preferred stock of the Corporation is hereby created and designated with the
following relative rights, preferences, privileges, qualifications, limitations,
and restrictions:

    

    1. Designation and
Number.  There shall be a series of preferred stock, par value
$0.001 per shares, designated as “Series A Preferred Stock,” and the number of
shares constituting such series shall be Four Hundred Thousand
(400,000).

    

    2. Dividends. The
holders of shares of Series A Preferred Stock, in preference to the holders of
Common Stock, shall be entitled to receive when, as, and if declared by the
Board of Directors out of funds legally available for the purpose, cumulative
dividends as provided in this Section 2.

    

    a. The
holders of the Series A Preferred Stock shall be entitled to receive cumulative
dividends, out of the funds legally available therefor, which shall accrue on
each share of Series A Preferred Stock (adjusted for any subdivisions,
combinations, consolidations or stock distributions or stock dividends with
respect to such shares) at the Dividend Rate.  Dividends shall be
payable annually to the holders of shares of Series A Preferred Stock at the
option of the Corporation in cash or Common Stock valued at the average closing
price of the stock for the twenty (20) trading days subsequent to Dividend Date.
The Dividend Rate is eight percent (8%) of the stated value (“Stated Value”) per
share of the shares of Series A Preferred Stock not to exceed one percent (1%)
of gross revenues as set forth in the Corporation’s financial statements, but
not less than two percent (2%) of the Stated Value of all then outstanding
shares of Series A Preferred Stock. Stated Value is defined as $16.50 per
outstanding share of Series A Preferred Stock.

    

    b. Dividends
shall be calculated and compounded annually in arrears on December 31 of each
year (each a “Dividend Date”) with respect to the prior twelve month period
prorated on a daily basis for partial periods.  Dividends shall
commence to accrue on each share of Series A Preferred Stock from the date of
issuance thereof whether or not declared by the Board of Directors, and whether
or not there are profits, surplus or other funds of the Corporation legally
available for the payment of dividends, and shall continue to accrue thereon
until the Series A Preference Amount is paid in full.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    c. To the
extent the Corporation has funds legally available for the payment of dividends,
as determined in good faith by the Board of Directors, the Corporation shall,
within thirty (30) days following each calendar quarter, so long as shares of
Series A Preferred Stock are issued and outstanding, declare and pay dividends
equal to the accrued and unpaid dividends on such Series A Preferred
Stock.  Except as otherwise provided herein, if at any time the
Corporation pays less than the total amount of dividends then accrued with
respect to the Series A Preferred Stock, such payment shall be distributed
ratably among the holders of the Series A Preferred Stock based upon the
aggregate accrued but unpaid dividends on the Series A Preferred Stock held by
each holder.

    

    d. No
dividends shall be declared or paid on the Common Stock until all dividends
accrued or declared but unpaid on the Series A Preferred Stock shall have been
paid in full.

    

    3. Liquidation Preference on
Dissolution, Sale of the Corporation or Reorganization.

    

    a. In the
event of any liquidation, dissolution or winding up of the affairs of the
Corporation, either voluntarily or involuntarily (a “Dissolution”), each holder
of Series A Preferred Stock shall be entitled, after provision for the payment
of the Corporation’s debts and other liabilities, to be paid in cash in full,
before any distribution is made on any Common Stock, an amount of $16.50 per
share, in cash (the “Series A Liquidation Amount”).  The Corporation
shall, not later than 20 days prior to the earlier of the record date for the
taking of a vote of stockholders with respect to any Dissolution or the date set
for the consummation of a Dissolution, provide to the holders of the Series A
Preferred Stock such information concerning the terms of the Dissolution and the
value of the assets of the Corporation as may be reasonably requested by the
holders of shares of Series A Preferred Stock.  If, upon a
Dissolution, the net assets of the Corporation distributable among the holders
of all outstanding Series A Preferred Stock shall be insufficient to permit the
payment of the Series A Liquidation Amount in full, then the entire net assets
of the Corporation remaining after the provision for the payment of the
Corporation’s debts and other liabilities shall be distributed among the holders
of the Series A Preferred Stock ratably in proportion to the full preferential
amounts to which they would otherwise be respectively entitled on account of
their Series A Preferred Stock.  Upon any such Dissolution, after the
holders of Series A Preferred Stock shall have been paid in full the Series A
Liquidation Amount, the remaining net assets of the Corporation shall be
distributed to the other stockholders of the Corporation as their respective
interests may appear.

    

    b. Upon
payment in full of the Series A Liquidation Amount to which the holders of the
shares of Series A Preferred Stock are entitled, the holders of shares of this
Series will not be entitled to any further participation in any distribution of
assets by the Corporation.

    

    c. Neither a
consolidation or merger of the Corporation with or into any other corporation,
nor a merger of any other corporation with or into the Corporation, nor a sale
or transfer of all or any part of the Corporation’s assets for cash or
securities or other property shall be considered a liquidation, dissolution or
winding-up of the Corporation’s within the meaning of this Section
3.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    d. Any
Reorganization of the Corporation required by any court or administrative body
in order to comply with any provision of law shall be deemed to be an
involuntary liquidation, dissolution or winding up of the Corporation unless the
preferences, qualifications, limitations, restrictions and special or relative
rights granted to or imposed upon the holders of Series A Preferred Stock are
not adversely affected by such Reorganization.

    

    4. Voting Rights of Series A
Preferred Stock. The shares of the Series A Preferred Stock shall not
have the right to vote on any matter affecting the Corporation.

    

    5. Conversion
Rights.

    

    a. Conversion
Procedure.  At any time and from time to time, any holder of Series A
Preferred Stock shall have the right, at its option, to convert all or any
portion of the shares of Series A Preferred Stock (including any fraction of a
share) held by such holder into a number of shares of fully paid and
nonassessable Common Stock at the rate of fifteen (15) shares of Common Stock
for each full share of Series A Preferred Stock, subject to adjustment as
explained in this Section 5.

    

    b. Subdivision
or Combination of Common Stock.  If the Corporation at any time
subdivides (by any stock split, stock dividend, recapitalization or otherwise)
its outstanding shares of Common Stock into a greater number of shares, the
Series A Conversion Price in effect immediately prior to such subdivision shall
be proportionately reduced, and conversely, in the event the outstanding shares
of Common Stock shall be combined (by reverse stock split or otherwise) into a
smaller number of shares, the Series A Conversion Price in effect immediately
prior to such combination shall be proportionately increased.

    

    c. Adjustment
for Certain Dividends and Distributions.  In the event the Corporation
at any time or from time to time after the Series A Original Issue Date shall
make or issue, or fix a record date for the determination of holders of Common
Stock entitled to receive, a dividend or other distribution payable on the
Common Stock in additional shares of Common Stock, then and in each such event
the Series A Conversion Price in effect immediately before such event shall be
decreased as of the time of such issuance or, in the event such a record date
shall have been fixed, as of the close of business on such record date, by
multiplying the Series A Conversion Price then in effect by a
fraction:

    

    i. the
numerator of which shall be the total number of shares of Common Stock issued
and outstanding immediately prior to the time of such issuance or the close of
business on such record date, and

    ii. the
denominator of which shall be the total number of shares of Common Stock issued
and outstanding immediately prior to the time of such issuance or the close of
business on such record date plus the number of shares of Common Stock issuable
in payment of such dividend or distribution;

    

    
      
        
        

      

      
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    provided,
however, that if such record date shall have been fixed and such dividend is not
fully paid or if such distribution is not fully made on the date fixed therefor,
the Series A Conversion Price shall be recomputed accordingly as of the close of
business on such record date and thereafter the Series A Conversion Price shall
be adjusted pursuant to this subsection as of the time of actual payment of such
dividends or distributions; and provided further, however, that no such
adjustment shall be made if the holders of Series A Preferred Stock
simultaneously receive a dividend or other distribution of shares of Common
Stock in a number equal to the number of shares of Common Stock as they would
have received if all outstanding shares of Series A Preferred Stock had
been converted into Common Stock on the date of such event.

    

    d. Adjustments
for Other Dividends and Distributions. In the event the Corporation at any time
or from time to time after the Series A Original Issue Date shall make or issue,
or fix a record date for the determination of holders of Common Stock of the
Corporation entitled to receive, a dividend or other distribution payable in
securities of the Corporation (other than a distribution of shares of Common
Stock in respect of outstanding shares of Common Stock) or in other property,
then and in each such event the holders of Series A Preferred Stock shall
receive, simultaneously with the distribution to the holders of such Common
Stock, a dividend or other distribution of such securities or other property in
an amount equal to the amount of such securities or other property as they would
have received if all outstanding shares of Series A Preferred Stock had
been converted into Common Stock on the date of such event.

    

    e. Adjustment
for Merger or Reorganization, etc.  If there shall occur any
reorganization, recapitalization, consolidation or merger involving the
Corporation in which the Common Stock (but not the Series A Preferred Stock) is
converted into or exchanged for securities, cash or other property, then, as a
part of and a condition to such reorganization, recapitalization, consolidation
or merger, provision shall be made so that thereafter each share of Series A
Preferred Stock shall be convertible into the same kind and amount of
securities, cash or other property of the Corporation, or of the successor
corporation resulting from such reorganization, recapitalization, consolidation
or merger, which a holder of the number of shares of Common Stock of the
Corporation issuable upon conversion of one share of Series A Preferred Stock
immediately prior to such reorganization, recapitalization, consolidation or
merger would have been entitled to receive pursuant to such
transaction.

    

    f. Notices.

    

    i. Immediately
upon any adjustment of the Series A Conversion Price, the Corporation shall give
written notice thereof to all holders of such Series A Preferred Stock, setting
forth in reasonable detail and certifying the calculation of such adjustment and
the facts upon which such adjustment is based.

    

    ii. The
Corporation shall give written notice to all holders of Series A Preferred Stock
at least twenty (20) days prior to the date on which the Corporation closes its
books or takes a record (a) with respect to any dividend or distribution upon
Common Stock, (b) with respect to any pro rata subscription offer to holders of
Common Stock, (c) with respect to any dissolution or liquidation or any merger,
consolidation, reorganization, recapitalization or similar event, or (d) with
respect to any other right afforded to any holder of Common Stock.

    

    6. Corporate
Redemption.

     

    
      
        
        

      

      
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    a. Redemption.   The
shares of Series A Preferred Stock are redeemable at the option of the
Corporation in cash at $16.50 per share or in shares of Common Stock in the
ratio of fifteen (15) shares of Common Stock for each share of Series A
Preferred Stock redeemed at the choice of the Corporation (the “Redemption
Price”). No redemption of Series A Preferred Stock shall be made in shares of
Common Stock unless the Common Stock is trading at an average of $2.00 per share
for a period of least twenty (20) consecutive days prior to the Redemption
Notice. The Corporation shall notify each holder of Series A Preferred Stock in
writing (a “Redemption Notice”) of the Corporation’s intent to exercise the
rights afforded by this Section 6(a), specifying the number of shares of Series
A Preferred Stock to be redeemed, the date not less than thirty (30) nor more
than sixty (60) days from the date of such notice on which such Series A
Preferred Stock shall be redeemed (the “Redemption Date”), and the place or
places at which the shares called for redemption shall, upon presentation and
surrender of such certificates representing such shares, be
redeemed.  Subject to Section 6(b), the Corporation shall redeem a pro
rata amount from each holder of Series A Preferred Stock (based on the total
number of shares of Series A Preferred Stock outstanding); provided however, if
a holder of Series A Preferred Stock desires more or less than such holder’s pro
rata amount to be redeemed, such holder shall notify the Corporation in writing
at least ten (10) days prior to the Redemption Date and the Corporation shall
make efforts to allocate the redemption in a manner consistent with the notices
received from the holder’s of the Series A Preferred Stock but subject to the
full redemption of the amount the Corporation has provided notice to redeem
(such allocation shall be made by the Board of Directors). The Corporation shall
redeem on the Redemption Date each share of Series A Preferred Stock being
redeemed in cash by wire transfer of immediately available funds at a redemption
price equal to the Series A Preference Amount (the “Redemption
Price”).

    

    b. Conversion
Rights.  Notwithstanding Section 6(a), upon receipt of the Redemption
Notice, each holder of Series A Preferred Stock may, in lieu of having such
holder’s applicable shares of Series A Preferred Stock being redeemed pursuant
to Section 6(a), convert all or any portion of the shares of Series A Preferred
Stock subject to Redemption by notifying the Corporation in writing at least ten
(10) days prior to the Redemption Date of its intent to convert such shares,
which conversion shall be subject to the provisions of Section 5 (and the
Conversion Date of such shares shall be the Redemption Date).

    

    c. Notices.  The
notices provided for in this Section 6 shall be sent, if by or on behalf of the
Corporation, to the holders of the Series A Preferred Stock at their respective
addresses as shall then appear on the records of the Corporation, or if by any
holder of Series A Preferred Stock to the Corporation, by certified first class
mail, postage prepaid.

    

    d. Surrender
of Certificates; Payment.  On or before the applicable Redemption
Date, each holder of shares of Series A Preferred Stock to be redeemed on such
Redemption Date, unless such holder has exercised his, her, or its right to
convert such shares as provided in Section 5 hereof, shall surrender the
certificate or certificates representing such shares to the Corporation (or, if
such registered holder alleges that such certificate has been lost, stolen or
destroyed, a lost certificate affidavit and agreement of such holder, in form
reasonably acceptable to the Corporation, to indemnify the Corporation against
any claim that may be made against the Corporation on account of the alleged
loss, theft or destruction of such certificate), at the place designated in the
Redemption Notice, and on the Redemption Date the Redemption Price for such
shares shall be paid to the order of the person whose name appears on such
certificate or certificates as the owner thereof, and each surrendered
certificate shall be canceled and retired. In the event less than all of the
shares of Series A Preferred Stock represented by a certificate are redeemed, a
new certificate representing the unredeemed shares of Series A Preferred Stock
shall promptly be issued to such holder.  In the event a holder fails
to surrender such holder’s certificate (and/or a lost certificate affidavit and
agreement to indemnify) for the redeemed Series A Preferred Stock on or before
the applicable Redemption Date, such stock shall be redeemed as of the
Redemption Date regardless, and the Redemption Price shall be paid to such
holder upon surrender of the applicable certificate (and/or lost certificate
affidavit and agreement to indemnify).

     

    
      
        
        

      

      
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    e. Status of
Reacquired Shares.  Any shares of Series A Preferred Stock redeemed
pursuant to this Section 6 or otherwise acquired by the Corporation in any
manner whatsoever shall be canceled and shall not under any circumstances be
reissued; and the Corporation may from time to time take such appropriate
corporate action as may be necessary to reduce accordingly the number of
authorized shares of Series A Preferred Stock.

    

    7. Exclusion of Other Rights.  Except
as may otherwise be required by law, the shares of Series A Preferred Stock
shall not have any preferences or relative, participating, optional or other
special rights, other than those specifically set forth in this Certificate of
Designation.

    

    8. Rank.  The
Series A Preferred Stock shall rank senior in right as to dividends and upon
liquidation, dissolution or winding up to all Common Stock whenever
issued.

    

    9. Identical Rights.  Each
share of Series A Preferred Stock shall have the same relative rights and
preferences as, and shall be identical in all respects with, all other shares of
the Series A Preferred Stock.

    

    10. Certificates.  So
long as any shares of the Series A Preferred Stock are outstanding, there shall
be set forth on the face or back of each stock certificate issued by the
Corporation a statement that the Corporation shall furnish without charge to
each stockholder who so requests, a full statement of the designation and
relative rights, preferences and limitations of each class of stock or series
thereof that the Corporation is authorized to issue and of the authority of the
Board of Directors to designate and fix the relative rights, preferences and
limitations of each series.

    

    11. Defeasance.  Any
of the rights, powers or preferences of the holders of Series A Preferred Stock
set forth herein may be waived or defeased by the affirmative consent or vote of
the Series A Majority Holders.

    

    12. Definitions.

     

    “Articles
of Incorporation” shall mean the Articles of Incorporation of the Corporation,
as amended from time to time.

     

    
      
        
        

      

      
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    “Common
Stock” shall have the meaning set forth in the Articles of Incorporation of the
Corporation.

     

     “Conversion
Date” shall have the meaning set forth in Section 5(a)(ii) hereof.

     

    “Corporation”
shall have the meaning set forth in the preamble hereof.

     

     “Dissolution”
shall have the meaning set forth in Section 3(a) hereof.

     

    “Dividend
Date” shall have the meaning set forth in Section 2(b) hereof.

     

     “Person”
shall mean an individual, partnership, corporation, limited liability company,
association, trust, joint venture, unincorporated organization and any
government, governmental department or agency or political subdivision
thereof.

     

    “Preferred
Stock” shall have the meaning set forth in the Articles of Incorporation of the
Corporation.

     

    “Redemption”
shall have the meaning set forth in Section 6(a).

     

    “Redemption
Date” shall have the meaning set forth in Section 6(a).

     

    “Redemption
Notice” shall have the meaning set forth in Section 6(a).

     

    “Redemption
Price” shall have the meaning set forth in Section 6(a).

     

    “Sale of
the Corporation” shall mean a single transaction or a series of transactions
pursuant to which an unaffiliated Person or Persons acquire (i) Capital Stock of
the Corporation possessing the voting power to elect a majority of the
Corporation’s board of directors or more than fifty percent (50%) of the voting
power of the Corporation (whether by merger, consolidation or sale or transfer
of the Corporation’s Capital Stock), provided, however, (a) that an initial
public offering that results in an acquisition of voting power shall not be a
Sale of the Corporation and (b) a merger shall not be a Sale of the Corporation
as long as the stockholders of the Corporation own a majority of the Common
Stock of the surviving entity immediately following the merger); or (ii) all or
a substantial portion of the Corporation’s assets determined on a consolidated
basis.

     

     “Series
A Liquidation Amount” shall have the meaning set forth in Section 3(a)
hereof.

     

     “Series
A Preferred Stock” shall have the meaning set forth in Section 1
hereof.

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