Document:

EXHIBIT 10.4

FIRST AMENDMENT TO
LOAN AND SECURITY AGREEMENT

THIS FIRST
AMENDMENT TO LOAN AND SECURITY AGREEMENT dated as of August 22, 2006 (the
AMENDMENT), between HENNESSEY FINANCIAL, LLC, a Minnesota limited liability
company (MEZZANINE BORROWER) and CS FINANCING CORPORATION, a Delaware
corporation (together with its successors and assigns, MEZZANINE LENDER).

RECITALS:

A.                                   Mezzanine
Borrower and Mezzanine Lender have entered into that certain Mezzanine Loan and
Security Agreement dated October 5, 2005 (“Loan Agreement”).

B.                                     Mezzanine
Borrower and Mezzanine Lender desire to amend the Loan Agreement as stated
herein.

AGREEMENTS:

NOW, THEREFORE, in consideration of the foregoing Recitals, the
mutual promises of the parties hereto and the mutual benefits to be gained by
the performance hereof, Mezzanine Borrower and Mezzanine Lender hereby agree as
follows:

1.                                       The
definition of “Loan” in the Loan Agreement shall be amended and restated as
follows:

“LOAN shall mean the loan
in the amount of Sixty-Five Million Dollars ($65,000,000) made, if at all, in a
series of Advances by Mezzanine Lender to Mezzanine Borrower pursuant to this
Agreement.”

2.                                       The
definition of “Mezzanine Note” in the Loan Agreement shall be amended and
restated as follows:

“MEZZANINE NOTE shall mean
that certain Mezzanine Note, dated the date hereof, in the principal amount of
Sixty-Five Million Dollars ($65,000,000), made by Mezzanine Borrower, as maker,
in favor of Mezzanine Lender, as payee, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.”

3.                                       The
definition of “Permitted Debt” in the Loan Agreement shall be amended and
restated as follows:

“PERMITTED DEBT shall
mean any Debt of Mezzanine Borrower in excess of $75,000,000 to a single
creditor permitted in writing by the Mezzanine Lender, such permission not to
be unreasonable withheld.  All Debt of
Mezzanine Borrower is deemed to be permitted by Mezzanine

Lender until such time as
Mezzanine Lender shall have Advanced $65,000,000 hereunder.”

4.                                       The
definition of “Mezzanine Note” in the Loan Agreement shall be amended and
restated as follows:

“MEZZANINE NOTE shall
mean that certain Mezzanine Note, dated the date hereof, in the principal
amount One Hundred Million Dollars ($100,000,000), made by Mezzanine Borrower,
as maker, in favor of Mezzanine Lender, as payee, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.”

5.                                       Exhibit
A to the Loan Agreement shall be replaced by Exhibit A attached hereto.

6.                                       Unless
expressly changed pursuant to this Amendment, all other provisions of the Loan
Agreement remain in full force and effect.

IN WITNESS
WHEREOF, the parties hereto have caused this Amendment to be duly executed by
their duly authorized representatives, all as of the day and year first above
written.

	
  

  	
   

  	
  MEZZANINE BORROWER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HENNESSEY FINANCIAL LLC,

  a Minnesota limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Jeffrey Allen Gardner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
  Jeffrey Allen Gardner

  
	
   

  	
   

  	
  Title:

  	
   

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MEZZANINE LENDER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CS FINANCING CORPORATION

  a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Timothy R. Redpath

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
  Timothy R. Redpath

  
	
   

  	
   

  	
  Title:

  	
   

  	
  President

  

 

 

 2

EXHIBIT A

MEZZANINE NOTE

Minneapolis, Minnesota

$65,000,000

This MEZZANINE
NOTE, dated as of                                             ,
2006 (this NOTE), by Hennessey Financial, LLC, a Minnesota limited liability
company (BORROWER), having an address at 418 East County Road D, St. Paul, MN
55117, in favor of CS Financing Corporation, a Delaware corporation (together
with its successors and assigns, LENDER), having an office at 45 San Clemente
Drive, Suite B210, Corte Madera, CA 94925.

RECITALS

WHEREAS, Borrower
and Lender have entered into that certain Mezzanine Loan and Security Agreement
dated October 5, 2005 (“Loan Agreement”) and intend these Recitals to be a
material part of this Note.

NOW, THEREFORE,
FOR VALUE RECEIVED, Borrower promises to pay to the order of Lender the
Principal Amount (as defined below), together with interest from the date of
each Advance hereof and other fees, expenses and charges as provided in this
Note.

1.                                       DEFINED
TERMS.

a.                                       Capitalized
terms used but not otherwise defined herein shall have the respective meanings
given thereto in the Loan Agreement, unless otherwise expressly provided
herein. All references to sections shall be deemed to be references to sections
of this Note, unless otherwise indicated.

b.                                      The
following terms shall have the meaning ascribed thereto:

BORROWER shall have the
meaning provided in the first paragraph hereof.

DEFAULT RATE shall mean,
with respect to an acceleration of the Loan, a rate per annum equal to the
lesser of (a) the Maximum Legal Rate and (b) four percent (4%) above the Fixed
Rate.

FIXED RATE shall mean an
interest rate per annum equal to thirteen and 400/1000 (13.4%).

INTEREST PERIOD shall
mean each interest period commencing on the fifteenth (15th) calendar day of a
calendar month and ending on (and

 A-1
 

including) the fourteenth
(14th) calendar day of the following calendar month; provided that the first
interest period shall commence on the date hereof.

LENDER shall have the
meaning provided in the first paragraph hereof.

LIQUIDATED DAMAGES AMOUNT
shall have the meaning set forth in Section 4(d).

LOAN AGREEMENT shall mean
the Mezzanine Loan and Security Agreement, dated October 5, 2005, between
Borrower and Lender.

LOAN FEE shall equal five
and one-half percent (5.5%) of the aggregate amount of each Advance.

MATURITY DATE shall mean
fifty-nine (59) months from the date of the first Advance for Advances received
in the calendar year 2006 and seventy-one (71) months from the date of the
first Advance for Advances made in the calendar year 2007 and eighty-three (83)
months from the date of the first Advance for Advances made in the calendar
year 2008.

MATURITY DATE PAYMENT
shall have the meaning set forth in Section 3(d).

NOTE shall have the
meaning provided in the first paragraph hereof.

PAYMENT DATE shall be the
ninth (9th) calendar day of each calendar month and if such day is not a
Business Day, then the Business Day immediately preceding such day, commencing
on                                                   and continuing to and including the Maturity
Date.

PRINCIPAL AMOUNT shall
mean $65,000,000 or so much as may be outstanding under this Note.

2.                                       INTEREST.

a.                                       Prior
to the Maturity Date, interest shall accrue on the Principal Amount at the
Fixed Rate.

b.                                      From
and after the Maturity Date and from and after the occurrence (but only during
the continuance) of an Event of Default, interest shall accrue on the Principal
Amount at the Default Rate.

c.                                       Reserved.

d.                                      Interest,
for any given Interest Period, shall be computed on the Principal Amount on the
basis of a fraction, the denominator of which shall be 365

 A-2
 

                                                and the
numerator of which shall be the actual number of days in the relevant Interest
Period.

e.                                       The
provisions of this Section 2 are subject in all events to the provisions of
Section 2.2.4 of the Loan Agreement.

3.                                       PAYMENTS.

a.                                       On
each Payment Date, Borrower shall pay to Lender interest accruing hereunder
during the entire Interest Period in which said Payment Date occurs.  Borrower shall also pay Lender the Loan Fee
on the Closing Date of each Advance.

b.                                      All
payments made by Borrower hereunder or under any of the Loan Documents shall be
made on or before 2:00 p.m. Central Standard Time. Any payments received after
such time shall be credited to the next following Business Day.

c.                                       All
amounts advanced by Lender pursuant to the Loan Documents, other than the
Principal Amount, or other charges provided in the Loan Documents, shall be due
and payable as provided in the Loan Documents. In the event any such advance or
charge is not so repaid by Borrower, Lender may, at its option, first apply any
payments received under this Note to repay such advances, together with any
interest thereon, or other charges as provided in the Loan Documents, and the
balance, if any, shall be applied in payment of any installment of interest or
principal then due and payable.

d.                                      The
entire Principal Amount of this Note, all unpaid accrued interest, all interest
that would accrue on the Principal Amount through the end of the Interest
Period during which the Maturity Date occurs (even if such period extends
beyond the Maturity Date) and all other fees and sums then payable hereunder or
under the Loan Documents (collectively, the MATURITY DATE PAYMENT) shall be due
and payable in full on the Maturity Date.

e.                                       Amounts
due on this Note shall be payable, without any counterclaim, setoff or
deduction whatsoever, at the office of Lender or its agent or designee at the
address set forth on the first page of this Note or at such other place as
Lender or its agent or designee may from time to time designate in writing.

f.                                         All
amounts due under this Note, including, without limitation, interest and the
Principal Amount, shall be due and payable in lawful money of the United
States.

g.                                      To
the extent that Borrower makes a payment or Lender receives any payment or
proceeds for Borrower’s benefit, which are subsequently

 A-3
 

                                                invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid
to a trustee, debtor in possession, receiver, custodian or any other party
under any bankruptcy law, common law or equitable cause, then, to such extent,
the obligations of Borrower hereunder intended to be satisfied shall be revived
and continue as if such payment or proceeds had not been received by Lender.

4.                                       PREPAYMENTS.  Prior to the Maturity Date, the outstanding
Principal Amount may not be paid in whole or in part except in connection with
a payment pursuant to Section 4(b) of this Note.

a.                                       Reserved.

b.                                      MANDATORY
PREPAYMENTS.

i.                                          On
the next occurring Payment Date following the date on which any of the events
set forth in Section 2.3.1(a) of the Loan Agreement shall occur, Borrower shall
prepay the entire Principal Amount and any other amounts then due and payable
pursuant to the Loan Agreement and Borrower shall comply with the provisions
set forth in Section 4(c) and Section 4(d) of this Note.

ii.                                       On
the next occurring Payment Date following the date on which Borrower actually
receives any Excess Proceeds, Borrower shall prepay the Principal Amount in an
amount equal to one hundred percent (100%) of such Excess Proceeds and Borrower
shall comply with the provisions set forth in Section 4(c) of this Note.

c.                                       PAYMENTS
IN CONNECTION WITH A PREPAYMENT.

i.                                          On
the date on which a prepayment is made under this Note or as required under the
Loan Agreement, Borrower shall pay to Lender all unpaid interest on the
Principal Amount, such unpaid interest calculated (even if such period extends
beyond the date of prepayment) (i) through the end of the Interest Period
during which such prepayment is made if the Loan is prepaid from the fifteenth
(15th) day of any calendar month through the ninth (9th) day of the succeeding
calendar month, or (ii) through the end of the Interest Period next succeeding
the Interest Period in which such prepayment is made if the Loan is prepaid
from the Interest Determination Date in any calendar month through the
fourteenth (14th) day of any calendar month;

ii.                                       On
the Prepayment Date, Borrower shall pay to Lender all other sums then due under
the Note, the Loan Agreement and the other Loan Documents; and

 A-4
 

iii.                                    Borrower
shall pay all costs and expenses of Lender incurred in connection with the
prepayment (including without limitation, any costs and expenses incurred by
Lender in connection with a notice of prepayment which is subsequently revoked,
and including without limitation, any costs and expenses associated with a
release of the Lien of the Loan Agreement and the Loan Documents as set forth
in Section 2.3.3 of the Loan Agreement as well as reasonable attorneys’ fees
and expenses).

d.                                      LIQUIDATED
DAMAGES AMOUNT.  IF OTHER THAN IN
CONNECTION WITH THE APPLICATION OF PROCEEDS, NOTWITHSTANDING THE PROHIBITIONS
OF THIS SECTION 4, THE LOAN IS VOLUNTARILY OR INVOLUNTARILY REPAID PRIOR TO THE
MATURITY DATE, INCLUDING AS A RESULT OF AN ACCELERATED MATURITY DATE, THEN
BORROWER SHALL PAY TO LENDER, AS LIQUIDATED DAMAGES FOR SUCH DEFAULT AND NOT AS
A PENALTY, AND IN ADDITION TO ANY AND ALL OTHER SUMS AND FEES PAYABLE UNDER
THIS NOTE AND THE OTHER LOAN DOCUMENTS, AN AMOUNT EQUAL TO FOUR PERCENT (4%) OF
THE PRINCIPAL AMOUNT BEING REPAID (THE LIQUIDATED DAMAGES AMOUNT).

5.                                       Reserved.

6.                                       MISCELLANEOUS.

a.                                       WAIVER.  Borrower and all endorsers, sureties and
guarantors hereby jointly and severally waive all applicable exemption rights,
valuation and appraisement, presentment for payment, demand, notice of demand,
notice of nonpayment or dishonor, protest and notice of protest of this Note,
and, except as otherwise expressly provided in the Loan Documents, all other
notices in connection with the delivery, acceptance, performance, default or
enforcement of the payment of this Note. Borrower and all endorsers, sureties
and guarantors consent to any and all extensions of time, renewals, waivers or
modifications that may be granted by Lender with respect to the payment or
other provisions of this Note and to the release of the collateral securing
this Note or any part thereof, with or without substitution, and agree that
additional makers, endorsers, guarantors or sureties may become parties hereto
without notice to them or affecting their liability under this Note.

b.                                      Reserved.

c.                                       NOTE
SECURED.  This Note and all
obligations of Borrower hereunder are secured by the Loan Agreement and the
other Loan Documents.

 A-5
 

d.                                      NOTICES.  Any notice, election, request or demand which
by any provision of this Note is required or permitted to be given or served
hereunder shall be given or served in the manner required for the delivery of
notices pursuant to the Loan Agreement.

e.                                       ENTIRE
AGREEMENT.  This Note, together with
the other Loan Documents, constitutes the entire and final agreement between
Borrower and Lender with respect to the subject matter hereof and may only be
changed, amended, modified or waived by an instrument in writing signed by
Borrower and Lender.

f.                                         NO
WAIVER.  No waiver of any term or
condition of this Note, whether by delay, omission or otherwise, shall be
effective unless in writing and signed by the party sought to be charged, and
then such waiver shall be effective only in the specific instance and for the
purpose for which given. No notice to, or demand on, Borrower shall entitle
Borrower to any other or future notice or demand in the same, similar or other
circumstances.

g.                                      SUCCESSORS
AND ASSIGNS.  This Note shall be
binding upon and inure to the benefit of Borrower and Lender and their
respective successors and permitted assigns. Upon any endorsement, assignment,
or other transfer of this Note by Lender or by operation of law, the term
“Lender,” as used herein, shall mean such endorsee, assignee, or other
transferee or successor to Lender then becoming the holder of this Note. The
term “Borrower” as used herein shall include the respective successors and
assigns, legal and personal representatives, executors, administrators,
devisees, legatees and heirs of Borrower, if any.

h.                                      CAPTIONS.  All paragraph, section, exhibit and schedule
headings and captions herein are used for reference only and in no way limit or
describe the scope or intent of, or in any way affect, this Note.

i.                                          SEVERABILITY.  The provisions of this Note are severable,
and if any one clause or provision hereof shall be held invalid or
unenforceable in whole or in part, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof, and not any other
clause or provision of this Note.

j.                                          GOVERNING
LAW.  THIS NOTE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MINNESOTA.  BORROWER AGREES THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS NOTE OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE
COURTS OF THE STATE OF MINNESOTA OR ANY FEDERAL COURT SITTING THEREIN AND
CONSENT TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF
PROCESS IN ANY SUCH SUIT BEING MADE UPON BORROWER IN THE MANNER AND AT 

 A-6
 

                                                THE
ADDRESS SPECIFIED FOR NOTICES IN THE LOAN AGREEMENT. BORROWER HEREBY WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR
ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.

k.                                       JURY
TRIAL WAIVER.  BORROWER AND ALL
PERSONS CLAIMING BY, THROUGH OR UNDER IT, HEREBY EXPRESSLY, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING UNDER THIS NOTE, INCLUDING,
WITHOUT LIMITATION, ANY PRESENT OR FUTURE MODIFICATION THEREOF OR (II) IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO THIS NOTE (AS NOW OR HEREAFTER MODIFIED)
OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH
CASE WHETHER SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION IS NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
BORROWER HEREBY AGREES AND CONSENTS THAT AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION MAY BE FILED WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT
HERETO TO THE WAIVER OF ANY RIGHT TO TRIAL BY JURY. BORROWER ACKNOWLEDGES THAT
IT HAS CONSULTED WITH LEGAL COUNSEL REGARDING THE MEANING OF THIS WAIVER AND
ACKNOWLEDGES THAT THIS WAIVER IS AN ESSENTIAL INDUCEMENT FOR THE MAKING OF THE
LOAN. THIS WAIVER SHALL SURVIVE THE REPAYMENT OF THE LOAN.

l.                                          Counterclaims
and other Actions.  Borrower hereby
expressly and unconditionally waives, in connection with any suit, action or
proceeding brought by Lender on this Note, any and every right it may have to
(i) interpose any counterclaim therein (other than a counterclaim which can
only be asserted in the suit, action or proceeding brought by Lender on this
Note and cannot be maintained in a separate action) and (ii) have any such
suit, action or proceeding consolidated with any other or separate suit, action
or proceeding; provided, however, the foregoing shall not prohibit Borrower
from asserting any unrelated claim in a separate suit, action or proceeding.

                                                [REMAINDER
OF PAGE INTENTIONALLY BLANK]

 A-7
 

IN WITNESS WHEREOF,
Borrower has caused this Note to be executed and delivered as of the day and
year first above written.

	
  

  	
   

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HENNESSEY FINANCIAL, LLC

  a Minnesota limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Jon C. Essen

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
  Jon C. Essen

  
	
   

  	
   

  	
  Title:

  	
   

  	
  President

  

 

 

 A-8EXHIBIT
10.5

DIRECTOR NONQUALIFIED STOCK OPTION AGREEMENT

THIS AGREEMENT is
dated effective as of the grant date set forth on Exhibit 1 attached
hereto, between CS Financing Corporation, a Delaware corporation (the “Corporation”),
and the party listed on Exhibit 1 (“Grantee”).

WHEREAS, the
Corporation desires to grant and the Grantee desires to accept the Nonqualified
Stock Options to purchase Common Stock of the Corporation (as defined below);

NOW THEREFORE, in
consideration of the premises and of the covenants and agreements set forth
below, it is mutually agreed as follows:

1.                                       Grant of Options.  The Corporation hereby grants to
Grantee an Option to purchase from the Corporation all or any part of an
aggregate amount of the shares of the Common Stock of the Corporation, $0.01
par value per share (the “Common Stock”), at the Option price and on other
terms, as set forth in Exhibit 1 attached hereto and made a part
hereof.  The date of this Agreement is
the effective date of the grant.  This
Option is not intended to qualify as an Incentive
Stock Option as described in Section 422 of the Internal Revenue Code of 1986
and is referred to as a Nonqualified Stock Option.

2.                                       Exercise Period.  This Option shall vest and become
exercisable in accordance with the schedule attached hereto as Exhibit 1 and
made a part hereof.  All vested Options
must be exercised on or before a date ten (10) years from the date of the
grant.  Vesting shall continue in
accordance with Exhibit 1 notwithstanding the termination of Grantee’s
employment relationship with the Corporation.

3.                                       Exercise of Option.  The vested portion of this Option
may be exercised only by written notice of intent to the Corporation at its
office at 45 San Clemente Drive, Suite B210, Corte Madera, California 94925.  Such notice shall state the number of shares
of Common Stock in respect of which the Option is being exercised and shall be
accompanied by payment for such Common Stock in cash, certified or cashier’s
check or by personal check.  A form of
Notice of Exercise is attached hereto as Exhibit A.

4.                                       Withholding.  In the event that the Grantee elects to
exercise this Option or any part thereof, and if the Corporation shall be
required to withhold any amounts by reasons of any federal, state or local tax
laws, rules or regulations in respect of the issuance of shares to the Grantee
pursuant to the Option, the Corporation shall be entitled to deduct and
withhold such amounts from any payments to be made to the Grantee.  In any event, the Grantee shall make available
to the Corporation, promptly when requested by the Corporation, sufficient
funds to meet the requirements of such withholding; and the Corporation shall
be entitled to take and authorize such steps as it may deem advisable in order
to have such funds available to the Corporation out of any funds or property
due or to become to the Grantee.

5.                                       No Shareholder Rights.  Grantee shall have no rights as a
stockholder with respect to any shares of Common Stock subject to this Option
prior to the date of issuance of a certificate or certificates for such shares.

 

6.                                       Investment Representation.  Notice of the
exercise of this Option may include a representation that any of the Option
shares purchased shall be acquired as an investment and not with a view to, or
for sale in connection with, any public distribution.

7.                                       Compliance with Law and Regulations.  The Grantee
acknowledges that this Option may not be exercised until the Corporation has
taken all actions then required to comply with all applicable federal and state
laws, rules and regulations and any exchange on which the Common Stock may then
be listed.  The certificates representing
the shares purchased upon the exercise of this Option may bear a legend in
substantially the following form:

These shares have not been registered either under any applicable
federal law and rules and resale will not be permitted under state law unless
the shares are first registered under the Minnesota Securities Law.  Further, no sale, offer to sell, or transfer
of these shares shall be made unless a registration statement under the federal
Securities Act of 1933, as amended, with respect to such shares is then in
effect or an exemption from the registration requirements of such Act is then
in fact applicable to such shares.

8.                                       Binding Agreement.  This Agreement shall be binding
upon and inure to the benefit of the legal representatives, executors,
administrators, successors and assigns of each party to this Agreement.

9.                                       Complete Agreement.  This Agreement sets forth the
entire understanding of the parties hereto and shall not be amended, changed or
terminated except by an instrument in writing signed by the parties to this
Agreement.

10.                                 Counterparts and Governing Law.  This Agreement
may be executed in counterparts, and its validity, construction and
performance, shall be governed by the laws of the state of Minnesota.

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

	
  

  	
   

  	
  CS FINANCING CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Timothy R. Redpath

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Print Name:

  	
   

  	
  Timothy R. Redpath

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GRANTEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Grantee’s signature is set forth on Exhibit 1
  attached hereto and made a part hereof.]

  

 

 

EXHIBIT
A

NOTICE OF EXERCISE OF STOCK OPTION

CS Financing
Corporation

45 San Clemente Drive, Suite B210

Corte Madera, CA 94925

The undersigned is the holder of a Stock Option (the “Option”)
to purchase shares of Common Stock of CS Financing Corporation (the “Corporation
“), pursuant to the terms of the Stock Option Agreement between the Corporation
and the undersigned (the “Agreement”). 
The undersigned hereby irrevocably elects to exercise the Option to
purchase _____ shares of Common Stock (the “Option Shares”).  Enclosed herewith are (1) the original signed
Agreement, and (2) payment for the Option Shares as required under the
Agreement.  The undersigned requests that
the certificate representing the Option Shares be issued in the name of the undersigned
and delivered to the address set forth below.

In connection with the issuance of the Option Shares
to the undersigned, the undersigned hereby certifies and represents to the
Corporation that the undersigned is acquiring such shares for the purpose of
investment and not with a view toward distribution.  The undersigned understands that these
securities have not been registered either under any applicable federal law and
rules or applicable state law and rules and that resale will not be permitted under
state law unless the securities are first registered or the sale is a
transaction exempt from registration under the applicable state securities law.

The undersigned further understands that no sale,
offer to sell, or transfer of the Option Shares shall be made unless a
registration statement under the federal Securities Act of 1933, as amended
(the “Act”), with respect to the Option Shares is then in effect or an
exemption from the registration requirements of the Act is then in fact
applicable to the Option Shares.  The
undersigned understands that a legend reciting this investment restriction may
be placed on any stock certificate that may be issued to the undersigned.

Dated:

(Grantee
Signature)

(Address)

 

EXHIBIT
1

OPTION TERMS

	
  Name of Grantee:

  	
   

  	
  Timothy R. Redpath

  
	
   

  	
   

  	
   

  
	
  Date of Grant:

  	
   

  	
  January 1, 2006

  
	
   

  	
   

  	
   

  
	
  Number of Shares
  Granted:

  	
   

  	
  600 (10% of total issued and outstanding shares)

  
	
   

  	
   

  	
   

  
	
  Exercise Price:

  	
   

  	
  $2.00

  
	
   

  	
   

  	
   

  
	
  Type of Option

  	
   

  	
   

  
	
  (Qualified or
  Non-Qualified):

  	
   

  	
  Non-Qualified

  
	
   

  	
   

  	
   

  
	
  Vesting:

  	
   

  	
  × 100 — filing of
  the Corporation’s registration statement

  
	
   

  	
   

  	
  × 100 —
  effectiveness of the registration statement

  
	
   

  	
   

  	
  × 100 — aggregate
  sale of $25,000,000 in debt securities of the Corporation

  
	
   

  	
   

  	
  × 100 — aggregate
  sale of $50,000,000 in debt securities of the Corporation

  
	
   

  	
   

  	
  × 100 — aggregate
  sale of $75,000,000 in debt securities of the Corporation

  
	
   

  	
   

  	
  × 100 — aggregate
  sale of $100,000,000 in debt securities of the Corporation

  

 

	
  CS FINANCING CORPORATION

  	
   

  	
  Accepted and agreed to by

  the undersigned Grantee

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Timothy R. Redpath

  	
   

  	
  By:

  	
   

  	
  /s/ Timothy R. Redpath

  
	
  Print Name:

  	
   

  	
  Timothy R. Redpath

  	
   

  	
  Print Name:

  	
   

  	
  Timothy R. Redpath

  
	
  Title:

  	
   

  	
  Chief Executive Officer

  	
   

  	
  Title:

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

[Please execute two copies of this Exhibit 1

and return one copy to the Corporation.]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}]]