OFFERING CIRCULAR

For

CF FUND II, LLC

a Pennsylvania Limited Liability Company

CF Fund II, LLC, (the “LLC” or “Company”) is a Pennsylvania limited liability company. The Company is hereby offering (the “Offering”) by means of this offering circular (the “Offering Circular”) an indefinite number of Notes memorialized by promissory notes (“Promissory Notes” or “Notes”) on an “as needed” basis to qualified investors. As further described in the Memorandum, the Company was formed and organized recently and has very limited operating history. The Company is a wholly owned subsidiary of Conquest Funding, Inc., a Pennsylvania corporation (the “CFI” or “Parent Company”). CFI is the sole member of the Company, and shall manage the business operations of the Company, including this Offering. The Company was formed with the purpose to (i) primarily fund, make, acquire, and/or purchase loans (“Loans”) originated by CFI; the Loans will be secured by real property and/or personal property located across the United States (focusing on Pennsylvania, Maryland and New Jersey); and (ii) secondarily to fund, finance, acquire, purchase, and/or sell real property located across the United States (focusing on Pennsylvania, Maryland and New Jersey).

This Offering will commence immediately upon qualification of the Offering’s submission to the SEC (the “Effective Date”) and will terminate at the discretion of CFI. The Offering may be closed from time to time, on an as needed basis. The maximum amount of the offering shall not exceed Fifty Million Dollars ($50,000,000) for the life of the Offering and Twenty Million Dollars ($20,000,000) within a twelve (12) month period in accordance with Tier One of Regulation A as set forth under the Securities Act of 1933, as amended, (“Reg A Tier 1”).

Prospective investors who execute a subscription agreement will acquire Notes from the LLC and will become a holder of the Notes once the Company deposits the Investor’s investment into the LLC’s main operating account and subject to the terms and conditions in this Offering Circular and Subscription Agreement. No escrow will be used. (See “The Offering” below).

Prospective investors who execute a subscription agreement (“Subscription Agreement”) to invest in the Notes will become a holder of the Notes (“Noteholder”) once the Company deposits the investor’s investment into the Company’s main operating bank account and subject to terms and conditions in the Memorandum and Subscription Agreement. An investment in the Company is subject to a variety of restrictions as detailed in the Memorandum. The Company, and its officers and directors, will receive a variety of compensation and income from the Company and are subject to several conflicts of interest, including (without limitation) the affiliate relationships of the Company and its officers and directors. (See “Risk Factors”, “Compensation” and “Conflicts of Interest” below.) Prospective investors should understand and consider that material income tax risks exist associated with investing in the Notes. (See “Income Tax Considerations” below.)

THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SELLING LITERATURE. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THIS INVESTMENT INVOLVES A DEGREE OF RISK THAT MAY NOT BE SUITABLE FOR ALL PERSONS. ONLY THOSE INVESTORS WHO CAN BEAR THE LOSS OF A SIGNIFICANT PORTION OF THEIR INVESTMENT SHOULD PARTICIPATE IN THE INVESTMENT. (SEE “RISK FACTORS”BELOW.)

THE SECURITIES OFFERED HEREUNDER ARE EXEMPT FROM REGISTRATION.THIS OFFERING CIRCULAR CONTAINS INFORMATION AND DISCLOSURES IN ACCORDANCE TO THE FORMAT SET FORTH IN SEC FORM S-11.

AN OFFERING CIRCULAR PURSUANT TO THE REQUIREMENTS OF REGULATION A RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. INFORMATION CONTAINED IN THIS PRELIMINARY OFFERING CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE THE OFFERING STATEMENT FILED WITH THE COMMISSION IS QUALIFIED. THIS PRELIMARY OFFERING CIRCULAR SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR ANY SALES OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL BEFORE REGISTRATION OR QUALIFICATION UNDER THE LAWS OF ANY SUCH STATE. WE ELECT TO SATISFY OUR OBLIGATION TO DELIVER A FINAL OFFERING CIRCULAR BY SENDING INVESTORS A NOTICE WITHIN TWO BUSINESS DAYS AFTER THE COMPLETION OF OUR SALE TO YOU THAT CONTAINS THE URL WHERE THE FINAL OFFERING CIRCULAR OR THE OFFERING STATEMENT IN WHICH SUCH FINAL OFFERING CIRCULAR WAS FILED MAY BE OBTAINED.

GENERALLY, NO SALE MAY BE MADE TO INVESTORS IF THE AGGREGATE PURCHASE PRICE BY INVESTORS EXCEEDS $20,000,000 IN A TWELVE MONTH PERIOD, PURSUANT TO THE TERMS OF RULE 251 OF REG A TIER 1 SET FORTH UNDER THE SECURITIES ACT OF 1933 (THE “ACT”).

NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THIS OFFERING TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THAT INFORMATION AND THOSE REPRESENTATIONS SPECIFICALLY CONTAINED IN THIS OFFERING CIRCULAR; ANY OTHER INFORMATION OR REPRESENTATIONS SHOULD NOT BE RELIED UPON. ANY PROSPECTIVE PURCHASER OF THE NOTES WHO RECEIVES ANY OTHER INFORMATION OR REPRESENTATIONS SHOULD CONTACT THE COMPANY IMMEDIATELY TO DETERMINE THE ACCURACY OF SUCH INFORMATION AND REPRESENTATIONS. NEITHER THE DELIVERY OF THIS OFFERING CIRCULAR NOR ANY SALES HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR IN THE INFORMATION SET FORTH HEREIN SINCE THE DATE OF THIS OFFERING CIRCULAR SET FORTH ABOVE.

PROSPECTIVE PURCHASERS SHOULD NOT REGARD THE CONTENTS OF THIS OFFERING CIRCULAR OR ANY OTHER COMMUNICATION FROM THE COMPANY AS A SUBSTITUTE FOR CAREFUL AND INDEPENDENT TAX AND FINANCIAL PLANNING. EACH POTENTIAL INVESTOR IS ENCOURAGED TO CONSULT WITH HIS, HER OR ITS OWN INDEPENDENT LEGAL COUNSEL, ACCOUNTANT AND OTHER PROFESSIONALS WITH RESPECT TO THE LEGAL AND TAX ASPECTS OF THIS INVESTMENT AND WITH SPECIFIC REFERENCE TO HIS, HER OR ITS OWN TAX SITUATION, PRIOR TO SUBSCRIBING FOR THE NOTES. THE PURCHASE OF NOTES BY AN INDIVIDUAL RETIREMENT ACCOUNT, KEOGH PLAN OR OTHER QUALIFIED RETIREMENT PLAN INVOLVES SPECIAL TAX RISKS AND OTHER CONSIDERATIONS THAT SHOULD BE CAREFULLY CONSIDERED. INCOME EARNED BY QUALIFIED PLANS AS A RESULT OF AN INVESTMENT IN THE COMPANY MAY BE SUBJECT TO FEDERAL INCOME TAXES, EVEN THOUGH SUCH PLANS ARE OTHERWISE TAX EXEMPT. (SEE “INCOME TAX CONSIDERATIONS” AND “ERISA CONSIDERATIONS.”)

THE INFORMATION CONTAINED IN THIS OFFERING CIRCULAR HAS BEEN SUPPLIED BY THE COMPANY. THIS OFFERING CIRCULAR CONTAINS SUMMARIES OF DOCUMENTS NOT CONTAINED IN THIS OFFERING CIRCULAR, BUT ALL SUCH SUMMARIES ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCES TO THE ACTUAL DOCUMENTS. COPIES OF DOCUMENTS REFERRED TO IN THIS OFFERING CIRCULAR, BUT NOT INCLUDED AS AN EXHIBIT, WILL BE MADE AVAILABLE TO QUALIFIED PROSPECTIVE INVESTORS UPON REQUEST.

CERTAIN TERMS OF THE OFFERING

1.            Notes will be offered and sold directly by the Company and its directors, officers and employees. No commissions for selling Notes will be paid to the Company or its directors, officers or employees. The Company may also sell Notes through the services of independent broker/dealers who are members of the Financial Industry Regulatory Authority (“FINRA”) and who will be entitled to receive commissions of up to eight percent (8%) of the gross proceeds received for the sale of Notes. These commissions will be paid by the Company, but such payments will reduce the Company’s working capital.

2.            The Maximum Offering Amount for the Company for the live of the Offering is $50,000,000 subject to the restrictions set forth under Regulation A Tier 1 of $20,000,000 in twelve (12) month period from inception.

FOR RESIDENTS OF ALL STATES. THE PRESENCE OF A LEGEND FOR ANY GIVEN STATE REFLECTS ONLY THAT A LEGEND MAY BE REQUIRED BY THAT STATE AND SHOULD NOT BE CONSTRUED TO MEAN AN OFFER OR SALE MAY BE MADE IN ANY PARTICULAR STATE. THIS MEMORANDUM MAY BE SUPPLEMENTED BY ADDITIONAL STATE LEGENDS. IF YOU ARE UNCERTAIN AS TO WHETHER OR NOT OFFERS OR SALES MAY BE LAWFULLY MADE IN ANY GIVEN STATE, YOU ARE ADVISED TO CONTACT THE COMPANY FOR A CURRENT LIST OF STATES IN WHICH OFFERS OR SALES MAY BE LAWFULLY MADE. AN INVESTMENT IN THIS OFFERING IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF FINANCIAL RISK. ACCORDINGLY, PROSPECTIVE INVESTORS SHOULD CONSIDER ALL OF THE RISK FACTORS DESCRIBED BELOW.

TABLE OF CONTENTS

SUMMARY OF THE OFFERING

The following information is only a brief summary of, and is qualified in its entirety by, the detailed information appearing elsewhere in this Offering Circular. This Offering Circular, together with the exhibits attached including, but not limited to, the Articles of Organization and operating agreement of the Company (respectively, the “Articles” and the “Operating Agreement”), copies of which are attached hereto as Exhibit A, should be carefully read in their entirety before any investment decision is made. If there is a conflict between the terms contained in this Offering Circular and the Articles or Operating Agreement, the Articles and Operating Agreement shall prevail and no Investor should rely on any reference herein to the Articles or Operating Agreement without consulting the actual underlying documents.

Forward Looking Statements

Investors should not rely on forward-looking statements because they are inherently uncertain. Investors should not rely on forward-looking statements in this Offering Circular. This Offering Circular contains forward-looking statements that involve risks and uncertainties. We use words such as “anticipated,” “projected”, “forecasted”, “estimated”, “prospective”, “believes,” “expects,” ”plans” “future” “intends,”, “should,” “can”, “could”, “might”, “potential,” “continue,” “may,” “will,” and similar expressions to identify these forward-looking statements. Investors should not place undue reliance on these forward-looking statements, which may apply only as of the date of this Offering Circular.

PLAN OF DISTRIBUTION

The Offering and sale of the Notes will be made to Investors through general solicitation, direct solicitation, and marketing efforts. The Company will not utilize an underwriter for the sale of the Notes. The Company may also sell the Notes through the services of an independent broker – dealer who are members of the Financial Industry Regulatory Authority (“FINRA”). FINRA member broker-dealers may be entitled to commissions of up to eight percent (8%) received for the sale of the Notes. These commissions will be paid by the Company, but such payments will reduce the Company’s working capital. The Notes will be offered on an on-going basis and on an as-needed basis based on the demand of Loans and/or opportunities to purchase real property. The Minimum Offering Amount is $50,000.00 and the Maximum Offering Amount for the life of the Offering is $50,000,000. The Maximum Offering Amount per year or ever twelve (12) months is $20,000,000. The LLC will only offer and sell Notes as needed for purposes set forth in “Operational Plan” below. For these reasons, there will be no need to return proceeds to Investors if the Minimum Offering Amount is not met.

USE OF PROCEEDS

The proceeds from this Offering will not be used to compensate or otherwise make payments to officers, directors or shareholders of the Company. All income earned by the Company and its Parent Company will be sourced from business conducted per the Operational Plan set forth below.

1.            Notes will be offered and sold directly by the Company and its directors, officers and employees. No commissions for selling Notes will be paid to the Company or its directors, officers or employees. The Company may also sell Notes through the services of independent broker/dealers who are members of the Financial Industry Regulatory Authority (“FINRA”) and who will be entitled to receive commissions of up to eight percent (8%) of the gross proceeds received for the sale of Notes. These commissions will be paid by the Company, but such payments will reduce the Company’s working capital.

2.            The only expenses associated with the Notes will be interest payments per the terms of the Notes. All other business expenses will be paid by the Company or CFI. Investors/Noteholders will not be responsible to bear any of the business / operating expenses of the Company.

THE OFFERING

This Offering involves the offering and sale of Notes in which the Investor will be an unsecured creditor of the Company. The brief summary of the features of the Notes provided below is qualified in its entirety by the terms and provisions of the actual Notes. In the event of any conflict between the short summary presented below and the actual terms and provisions of the Notes, the latter shall govern. PROSPECTIVE INVESTORS SHOULD CAREFULLY READ THE TERMS AND PROVISIONS OF THE PROMISSORY NOTES IN THEIR ENTIRETY AND EXPRESS WAIVES ANY CAUSE OF ACTION OR CLAIM ASSERTING THAT HE, SHE OR IT RELIED ON THE SUMMARY OF THE NOTE BELOW IN LIEU OF, OR IN CONTRAINDICATION TO, THE TERMS AND PROVISIONS OF THE ACTUAL NOTE.

1.            Interest. The Company intends to borrow money from Investors at a fixed Interest Rate (as defined below) per annum in each year through the Maturity Date. Investors who acquire Notes from the Company shall be referred to as “Noteholders”. Generally, Noteholders will be entitled to interest payments for the term of the Debt Security, and a balloon payment at maturity. Investors will have the option to elect to allow interest payments to accrue until the Debt Security matures or is repaid. The term of the Notes and the interest rates paid to Investors will vary depending on the amount and term of the Debt Security. Investors will have the option to accrue interest over the life of the promissory note and receive a lump sum payment at maturity or receive regular interest payments. Interest payments on the Notes will begin thirty (30) days from the effective date of the Note and shall remain payable on a monthly basis, in arrears.

2.            Note Term. All Notes will have a continuous and unlimited option to renew and extend the Note at the Maturity Date for another term equivalent to the original term of the Note, exercisable at the sole and absolute discretion of CFI. In the event CFI elects to extend and renew a Note, the original terms of the Note shall govern, including the interest rate. Noteholders that seek to withdraw their investment and avoid automatic extension and renewal of the Note must notify CFI in writing sixty (60) days prior to the Maturity Date of the Note.

3.            Interest Rate and Maturity Date. The interest rate and the term of each Note shall be determined by the Company. Such election is irrevocable and shall apply through the Maturity Date of the Note. These Notes will generally have the features described below.

Term in months

The foregoing is a general intended structure for the Notes. Investment in Notes will be subject to CFI. CFI, in its sole and absolute discretion, may reject, postpone an Investor’s subscription, for any reason. Further, CFI and/or the Company may, at its sole and absolute discretion, accept or require a lesser or greater minimum investment amount.

4.            Prepayment Ability. The Company may (in its sole and absolute discretion) prepay the Notes early at any time for any reason (or no reason) without any prepayment premium or penalty.

5.            Payments. Investors will receive monthly payments from the Company as set forth in greater detail in the Note. The Company shall make these monthly payments as interest-only and shall not be required to make any payment of the principal balance until the Maturity Date. Payments shall be made thirty (30) calendar days from the effective date of the Note and shall continue on a monthly basis, in arrears.

6.            Delinquency and Default. As further described in detail in the Note, the Company may be responsible for certain late charges in the event of making delinquent interest payments to Noteholders. In addition, as provided in the Note, certain events of default (that remain uncured) may cause the Note to become accelerated and immediately due and payable to the Noteholder.

7.            Financial Information. At the Company’s specific written request, within one hundred and twenty (120) days following the end of each fiscal year of Company (subsequent to the date of the Notes and prior to the Maturity Date), the Company will deliver a copy of its annual financial statements to the Noteholder.

8.            Dilution. Because this Offering is offering to borrow money from Investors in exchange for Notes, the Company is offering debt securities. Each Note is separate and unique, and is not subject to dilution of the Investors’ percentage ownership in the securities offered.

9.            Determination of Offering Price. The Offering price per Note is not uniform. The Company will be able to borrow money from Investors at varying amounts, with varying terms and interest rates as set forth above. The varying rates and terms set forth above have been determined arbitrarily by CFI. The amounts of the Investments may be tied to the Loans and/or properties in which the Company intends to invest. The Company’s ability to repay the Notes may be tied to its ability to invest in Loans and properties. Neither the Company nor CFI represent that the Notes have or will have a market value equal to their principal value or could be resold (if at all) at their original Investment amount.

10.          Early Withdrawal. As described in greater detail in the Note, a Noteholder may request an early withdrawal of the original principal balance of his, her or its Note. Noteholder must notify the Company of its intent for early withdrawal in writing no later than ninety (90) days prior to the intended withdrawal date. The Company may fulfill an early withdrawal request at its sole and absolute discretion and has no commitment (implied or express) to complete a request for early withdrawal. The Company may charge fees, penalties and/or additional interest if the Company elects to process any early withdrawal (in whole or in part).

THE COMPANY HAS NO DUTY WHATSOEVER TO HONOR ANY REQUEST FOR AN EARLY WITHDRAWAL OF FUNDS AND THERE IS ABSOLUTELY NO GUARANTEE THAT ANY EARLY WITHDRAWAL REQUEST WILL BE FULFILLED OR COMPLETED AT ANY TIME. ANY FUNDS LOANED TO THE COMPANY ARE NOT READILY AVAILABLE OR FREELY LIQUID. NO INVESTOR HAS ANY GUARANTEE OR RIGHT TO DEMAND THE RETURN OF ANY PORTION OF HIS, HER OR ITS PRINCIPAL BALANCE UNDER THIS NOTE PRIOR TO THE MATURITY DATE.

11.          Determination of the Offering Price. Due to the nature of the investment, there is no fixed offering price. The Minimum Investment Amount is $50,000. CFI, may, at its sole and absolute discretion, accept or require a lesser or greater minimum investment amount. The Minimum Investment Amount has been arbitrarily determined by CFI and does not bear any relationship to the assets that have been or are to be acquired by the Company or any other established criteria or indicia for valuing a business. Notwithstanding the foregoing, the Company will generally issue Notes based on the amounts needed to invest in real property, or make loans secured by real property and/or personal property. Neither the Company nor CFI represents that the Notes have or will have a market value equal to their Investment Amount or could be resold (if at all) at their original Investment Amount.

12.          How to Subscribe. To subscribe with the Company and purchase any Notes, a prospective investor must meet certain eligibility and suitability standards, some of which are set forth below. Additionally, a prospective investor must execute and deliver a Subscription Agreement (with Power of Attorney) attached hereto, together with payment in the amount of the purchase price payable to the Company. By executing the Subscription Agreement and Investor Questionnaire, an investor makes certain representations and warranties upon which the Company will rely in accepting subscriptions. CAREFULLY READ AND COMPLETE THE SUBSCRIPTION AGREEMENT (WITH POWER OF ATTORNEY) AND INVESTOR QUESTIONNAIRE.

13.          Subscription Agreements. Subscription Agreements from prospective investors will be accepted or rejected by the Company within one hundred and eighty (180) days after their receipt. The Company reserves the sole and absolute right to reject any subscription tendered for any reason or no reason, or to accept it in part only. (See “Use of Proceeds” below.) Subscription Agreements are non-cancelable and irrevocable by the Investor and subscription funds are non-refundable for any reason, except with the express written consent of the Company or as expressly set forth herein or in the Subscription Agreement. If accepted by the Company, an Investor shall become a Noteholder only when the Company deposits the Investor’s contribution into the Company’s main operating bank account. Until such time, an Investor’s subscription agreement is non-revocable, and subscription funds shall be held by the Company and may, at the sole discretion of the Company, be deposited in a call account (the “Subscription Account”).

Notwithstanding the previous paragraph, should the process from depositing an Investor’s funds into the Subscription Account and acceptance as a Noteholder take longer than one hundred and eighty (180) days, the Investor may request in writing to recover his, her or its investment funds. If, upon receipt of such request in writing, the Company has not yet accepted the Investor as a Noteholder, then the Company may, in its sole and absolute discretion, return the Investor’s funds to the investor and revoke the Subscription Agreement within ten (10) business days of receipt of such request from the Investor.

INVESTOR SUITABILITY

This investment is appropriate only for investors who have no need for immediate liquidity in their investments and who have adequate means of providing for their current financial needs, obligations and contingencies, even if such investment results in a total loss. Investment in the Interests involves a high degree of risk and is suitable only for an investor whose business and investment experience, either alone or together with a purchaser representative, renders the investor capable of evaluating each and every risk of the proposed investment. CAREFULLY READ THE ENTIRE “RISK FACTORS” SECTION OF THIS OFFERING CIRCULAR.

Each person (the “Investor”) seeking to acquire Notes will be required to represent that he, she or it is purchasing for his, her or its own account for investment purposes. The Company will sell Notes to a maximum of two thousand (2000) “Accredited Investors” and to no more than five hundred (500) non-accredited investors. All investors who are not deemed “Accredited” must have such knowledge and experience in financial matters, either alone or together with a purchaser representative, to make them capable of evaluating the merits and risks of such an investment in the Notes being offered. To qualify as an “Accredited Investor” an investor must meet ONE of the following conditions:

1.            Any natural person who had an individual income in excess of Two Hundred Thousand Dollars ($200,000) in each of the two most recent years or joint income with that person’s spouse in excess of Three Hundred Thousand Dollars ($300,000) in each of those years and who has a reasonable expectation of reaching the same income level in the current year;

2.            Any natural person whose individual net worth or joint net worth, with that person’s spouse, at the time of their purchase exceeds One Million Dollars ($1,000,000) (excluding the value of such person’s primary residence);

3.            Any bank as defined in Section 3(a)(2) of the Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to Section 15 of the Securities and Exchange Act of 1934 (the “Exchange Act”); any insurance company as defined in Section 2(13) of the Exchange Act; any investment company registered under the Investment Fund Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act; any Small Business Investment Fund (SBIC) licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a State, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment advisor, or if the employee benefit plan has total assets in excess of Five Million Dollars ($5,000,000.00) or, if a self-directed plan, with investment decisions made solely by persons who are Accredited Investors;

4.            Any private business development company as defined in Section 202(a)(22) of the Investment Advisors Act of 1940;

5.            Any organization described in Section 501(c)(3)(d) of the Internal Revenue Code of 1986, as amended (the “Code”), corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of Five Million Dollars ($5,000,000);

6.            Any director or executive officer, or Fund of the issuer of the securities being sold, or any director, executive officer, or Fund of a Fund of that issuer;

7.            Any trust, with total assets in excess of Five Million Dollars ($5,000,000), not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Section 506(B)(b)(2)(ii) of the Code; or

8.            Any entity in which all the equity owners are accredited investors as defined above.

OPERATIONAL PLAN

The Company’s business objective, on a continuous and ongoing basis, provided the necessary funding is available, is to (i) make, fund, originate, acquire and/or sell Loans secured by real property and/or personal property located in the United States with a focus in Pennsylvania, Maryland and New Jersey;; and (ii) identify, develop, acquire, remodel, rent, sell, transfer and/or sell properties throughout the United States with a focus in Pennsylvania, Maryland and New Jersey. To fund and/or finance these objectives, the Company, through this Offering, will be raising capital by selling Notes to Investors. The following chart provides an overview of the Company’s anticipated and projected expenditures for each fiscal year.

MARKET OPPORTUNITY

As a result of the 2008 economic downturn, the banking industry has been facing increased regulatory pressure from the federal banking regulators. Lenders have been required to severely tighten their underwriting requirements. This increased regulation has made it difficult, if not impossible, for many borrowers with less than perfect credit histories to obtain loans. This has left many businesses, investors and developers with very limited financing sources. Nationally, demand is rising for alternative sources of commercial financing. In the Eastern Pennsylvania market alone, there are hundreds of millions of dollars in commercial projects that can’t be implemented for lack of funding. Loans that banks would have underwritten 5 or 10 years ago, today don’t meet the banks’ current standards and regulation compliance. However, these financially sound borrowers with good underlying collateral asset values remain perfect lending prospects.

CFI was founded by Jeffrey Cella and Tim Messerli to fill this financial void. CFI will hand pick the best lending opportunities from this highly qualified but un-serviced borrowing pool. As an ongoing Offering, our overall strategy is to find high yield short term opportunities ranging from six (6) to thirty six (36) months in length in an ever evolving real estate market. While continuing to focus on high yield short term investments, as the real estate environment changes, the fund will react and adapt to new lending opportunities. Presently, the vast majority of our investments will be in the form of loans.

Two major markets niches and one smaller niche are an obvious focus for our lending services: (1) traditional purchase and rehab loan, which has become the standard product of private and hard-money lenders across the country; (2) commercial bridge loan; and (3) owner occupied loans.

Purchase and Rehab Loans

Historically, banks and mortgage companies occupied the role as primary lender for purchase and rehabilitation loans. Banks provided these loans to various quality buyers as long as the borrowers met the minimum underwriting standards. The 2008 recession, bank failures and the resulting credit crunch, severely reduced lending to this segment of the market. Today, few banks make these loans available to their customers. In the rare event they are available, it is equally rare for a bank to be able to process the loan rapidly enough to meet the fast moving time frames active investors need to quickly close on a property.

Historically, private lending has filled a vital role in financing various types of investment and owner-occupied properties. Typically, it was a friend or family member providing the money with very little concern about credit worthiness, cash flow, collateral values; personally knowing the borrower was the main criteria for extending the loan. Wealthy individuals became private lenders when they realized borrowers were willing to pay high rates for interim financing. Because of the comparatively higher interest rates, private lending is often referred to as “Hard Money Lending”. In many instances, borrowers need a quick, uncomplicated way to finance real estate; in other cases, individuals with low credit scores or little verifiable income qualify for Hard Money Loans. In the past, private lending companies were more interested in collateral value than cash flow. As a result of the 2008 economic crisis, these companies’ underwriting standards have become more conservative. Today, most private lenders use lower loan to value ratios, typically between fifty percent (50%) and seventy percent (70%) (depending on property type), are closely looking at the borrower’s exit strategy and of course, increased scrutiny of the borrower’s ability to repay the loan. No longer is the private lender’s main concern simply the collateral value and equity embedded in the property. These loans are very short term in nature and have terms of six (6) to twelve (12) months.

Due to the increase in home prices and declining interest rates over the past few years real estate investors have returned in search of attractive investment opportunities. Today, real estate investors are purchasing properties in need of rehab at steep discounts. As these properties are being converted into rentals or rehabbed for resale, the demand for financing is growing. CFI believes the demand for private loans will continue to grow as more investors come into the market looking to purchase and rehab properties. Based on our own experience operating CFI over the past five years lending in eastern PA, we believe the market has substantial growth potential. The vast majority of these borrowers have good credit histories, verifiable income and real estate experience, but don’t have a reliable source of financing that can more fast enough to keep us with their investing strategy.

Commercial Bridge Loans

The second major opportunity is in providing commercial bridge financing. This financing is generally provided to commercial business owners and larger commercial investors involving office buildings, light industrial buildings, retail stores, and service business location, mixed use buildings, multi-family units and restaurants. In some cases the property may be in need of rehab and updating to modern standards to attract higher quality tenants. In other cases, the borrower can’t qualify with a traditional bank quickly enough to take advantage of a low priced property from a distressed seller. Often, a divorce will leave a commercial property in the hands of borrower with a damaged credit history, needing time to re-establish a sound credit rating. These commercial bridge loans will often require longer terms of twelve (12) to thirty six (36) months.

Owner Occupied Loans

Finally the third, though much smaller market niche is financing of owner occupied properties. One of the challenges faced by borrowers today is finding a way to finance a property they want to purchase, rehab and live in. Current bank lending regulations make it difficult for banks to provide this type of financing. With tighter underwriting requirements, many borrowers simply can’t get a loan to purchase their primary residence or improve their primary residence. Potential reasons include insufficient time at their job, minor credit issues or other situations that keep them from getting financing. CFI believes these loans would provide balance to the portfolio and will enhance the overall product mix by attracting various types of borrowers resulting in a diverse portfolio.

Other Investments and Future Opportunities

While the Company’s main focus will be lending, from time to time, opportunities may arise that would provide even greater returns without increasing the risk to the fund. As a prudent strategy, under certain circumstances, the fund may take an equity position in a property we would typically lend against. For example, a borrower may not have the experience or financial capacity to execute on the purchase of a property. However, the property easily meets all of our requirements for financing. The Company could make the purchase and execute with its resources instead of having the project slip away.

Finally, since this is an ongoing Offering that will continue for many years as the real estate market changes, we will have the flexibility to create profitable solutions to varying real estate related financing challenges into the future.

LENDING STANDARDS AND POLICIES

The Company will engage in funding, originating, acquiring, managing or selling Loans and properties secured by either mortgages or deeds of trusts secured by real property (single family residential real estate) located around the United States, with a principal focus in Pennsylvania, Maryland and New Jersey. The value and balance of Loans or Properties will not be guaranteed by any governmental agency or private entity, but may be guaranteed by affiliates and associates of the underlying borrowers. The Company (or its designated third party agent or representative) will originate its own investment opportunities for Loans and Properties and service and manage any Loans or properties in which it may invest or otherwise participate.

Subject to the sole and absolute discretion of CFI, the Company may amend, modify, cancel, or revise any of the following at any time, CFI generally intends to make Loans according to the following lending standards and policies:

1.            Lien Priority. The deeds of trusts and mortgages securing the Loans will be first, junior or subordinated lien positions.

2.            Location of Real Property Securing Loans. Deeds of trusts and mortgages will be secured by real property located around the United States, with a primary focus in Pennsylvania, Maryland and New Jersey.

3.            Type of Property. Investment in Loans may involve underlying assets of real property that will generally consist of residential properties, mixed use properties, and commercial properties. The Loans will involve both non-owner occupied investment properties as well as owner occupied properties.

4.            Loan-to-Value Ratio. A Loan by the Company will generally not exceed the Loan-to-Value percentage ratios set forth below. The Loan-to-Value ratio is calculated by taking the amount of the Loan combined with the amount of outstanding debt secured by other liens on the property, dividing that by the value of the real property securing the deed of trust or mortgage and multiplying that figure by 100 to come to a percentage. “Value” shall be determined by an independent certified appraiser or non-certified appraiser doing an appraisal on the real property or commercial or residential real estate broker giving his, her, or its opinion of value of the real property. Notwithstanding the foregoing, the Company may, in its sole and absolute discretion, exceed the below stated Loan-to-Value ratios at any time and for any reason, including (without limitation) if CFI determines in its sole business judgment that a higher loan amount is warranted by the circumstances of that particular loan, such as being able to secure multiple properties, called “cross-collateralization”, personal guaranties, prior loan history with the borrower, market conditions, if mortgage insurance is obtained, or other factors.

The Company plans to routinely re-evaluate the portfolio and Loan-to-Value ratio maximums set forth herein and may revise the Loan-to-Value ratio maximums at any time if it considers it to be in its best interests. Subject to the specific ratios set forth below, CFI will maintain a weighted Loan-to-Value ratio of no more than seventy percent (70%). The value of the property will be calculated on an “after completion” or post-rehabilitation basis. Prospective investors should carefully evaluate and understand that calculation of the ration using such “after completion” values exposes the Loans to additional risks in the event that the rehabilitation is not completed or the value of the rehabilitation is not timely or ultimately achieved.

* Generally, the real property securing the loan will not be rural land, churches, assisted living facilities, day care centers or theaters.

(1)            Determined on an “as completed” value.

5.             Terms of Loans to Borrowers. The terms of the Loans will vary, but will generally have a term between six (6) months and twelve (12) months, but may have loan terms exceeding twelve (12) months. The Company does not expect Loans terms to exceed thirty six (36) months. Most Loans originated or acquired by Company will generally provide for monthly payments of principal and/or interest and a “balloon” payment payable in full at the end of the term. At the end of the term, CFI will require the borrower to pay the loan in full, to refinance the loan, or to sell the real property to pay back the loan.

6.             Interest Rates on Loans. The interest rates paid by borrowers on Loans will vary, but will generally be around nine percent (9.0%) to fifteen percent (15%) per annum.

7.             Title Insurance. Satisfactory title insurance coverage will be obtained for all Loans and will usually be paid by the borrower. The title insurance policy will name the Company as the insured and provide title insurance in an amount not less than the principal amount of the loan unless there is multiple forms of security for the loan, in which case the Company shall use its business judgment in determining whether and to what extent title insurance shall be required. Title insurance insures only the validity and priority of the deed of trust or mortgage, and does not insure the Company against any loss from other causes, such as (without limitation) diminution in the value of the secured property, loan defaults, and other such losses.

8.             Fire and Casualty Insurance. Satisfactory fire and casualty insurance will be obtained for all improved real property loans which insurance will name the Company as its loss payee in the amount equal to the improvements on the real property. (See “Business Risks – Uninsured Losses” below.)

9.             Mortgage Insurance. The Company does not intend to, but may if the property otherwise qualifies, arrange for mortgage insurance, which would afford some protection against loss if the Company foreclosed on a loan and there existed insufficient equity in the security property to repay all sums owed.

10.          Acquiring Loans from Other Lenders. The Company may also participate in loans with other lenders (including other businesses organized by business partners or affiliates of the Company, by providing funds for or purchasing a fractional undivided interest in a loan meeting the requirements set forth above. In the event the Company acquires loans from other lenders, the Company will receive assignments of all beneficial interest in any loans purchased.

11.          Purchase of Loans from Affiliates. The Company may purchase Loans from its Affiliates, so long as the Loans meet the lending requirements set forth above. For the purposes hereof, the term “Affiliates” with respect to any entity shall mean any of the following: (1) a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the entity, (2) a Person who, directly or indirectly, owns or controls at least ten percent (10%) of the outstanding voting interests of the entity, (3) a Person who is an officer, director, manager or member of the entity, or (4) a Person who is an officer, director, manager, member, general partner, trustee or owns at least ten percent (10%) of the outstanding voting interests of a Person described in clauses (1) through (3) of this sentence. The term “Person” shall mean a natural person or Entity. The term “Entity” shall mean an association, relationship or artificial person through or by means of which an enterprise or activity may be lawfully conducted, including, without limitation, a partnership, trust, limited liability company, corporation, joint venture, cooperative or association.

12.          Equity Participation and Mezzanine Positions. The Company may fund mezzanine mortgage loans at lower than market interest rates in order to obtain an equity interest in the underlying real property in which the Company funds the loan.

13.          Credit Evaluations. The Company may consider the income level and general creditworthiness of a borrower to determine his, her or its ability to repay any loan according to its terms in addition to considering the loan-to-value ratios and sources of security for repayment. Loans may be made to borrowers who are in default under other obligations or in bankruptcy or who do not have sources of income that would be sufficient to qualify for loans from other lenders such as banks or savings and loan associations.

14.          Loan Packaging and Servicing. CFI, or their respective affiliates will assemble and/or obtain all necessary information required to make a funding decision on any loan request. It is presently anticipated that all Loans will be serviced (i.e., loan payments collected and other services relating to the loan) by the Company (although the Company may, at any time, retain a third-party loan servicing company) (the “Servicer”). If the Servicer is a third party, the Company will oversee the Servicer. The Company may, in its sole and absolute discretion, decide to service Loans in-house at such time as conditions warrant. CFI may change or replace its Servicer at any time and for any reason in its sole and absolute discretion.

The Company will require the Servicer to adhere to the following Payment, Delinquency, Default and Foreclosure practices, procedures and policies:

(a)          Payment. Generally, payments will be payable monthly, on the first (1st) day of each month. Interest is generally prorated to the first (1st) day of the month following the closing of the loan escrow.

(b)          Delinquency. Generally, loans will be considered delinquent if no payment has been received within ten (10) days of the payment due date. Borrower will be notified of delinquency by mail on the twelfth (12th) day after the payment due date and a late charge will be assessed. The Servicer will refer to and rely upon the late charge provisions in the applicable loan documents for each loan.

(c)          Default. A loan will be considered in default if no payment has been received within thirty (30) days of the payment due date. Foreclosure will usually be initiated shortly after the thirty-first (31^st) day after a default, with the exact timing to be determined in each instance in the business judgment of the Company, which could be delayed several months depending on borrower circumstances and loan to value ratio of the security. Any costs of this process are to be posted to the borrower’s account for reimbursement to Company.

(d)          Foreclosure. Statutory guidelines for foreclosures in each state are to be followed by the Servicer until the underlying property is liquidated and/or the account is brought current. Any costs of this process are to be posted to the borrower’s account for reimbursement to Company or CFI. If a loan is completely foreclosed upon and the property reverts back to the Company or CFI, it will be responsible for paying the costs and fees associated with the foreclosure process, maintenance and repair of the property, service of senior liens and resale expenses.

15.          Sale of Loans. The Company does not plan on investing in Loans for the primary purpose of reselling such Loans in the course of business. However, the Company may, at the sole discretion of CFI, sell Loans, or fractional interests in such Loans, when CFI determines that it appears to be advantageous for the Company to do so, based upon then current interest rates, the length of time that the Loan has been held by the Company and the overall investment objectives of the Company.

16.          Borrowing/Hypothecation. The Company may borrow funds from financiers, other lenders, or banks for the purpose of making Loans and investing in Loans. In doing so, the Company may assign all or a portion of its loan portfolio as security for such loan(s). The Company anticipates engaging in this type of transaction when the interest rate at which the Company can borrow funds is significantly less than the rate that can be earned by the Company on its Loans, giving the Company the opportunity to earn a profit as a “spread.” Such a transaction involves certain elements of risk and also entails possible adverse tax consequences. (See herein “Risk Factors”, “Income Tax Considerations”, and “ERISA Considerations” below.) The Company may also in its sole and absolute discretion elect to finance its investments with borrowed funds.

17.          Custody, Management and Selection of Investments. The Company shall retain ownership, custody and management of all of the Company’s investments including Loans and properties. CFI, in its role as Manager shall have full authority to select, determine, assess, evaluate, execute, manage, service and authorize the Company’s investments.

18.          General Standards for Acquiring Properties. The Company will engage, from time to time on an opportunistic basis, in purchasing, acquiring, managing or selling interests in real property located across the United States. Properties may be acquired from individuals, entities, institutional investors, financial institutions, governmental agencies and other sellers of real property. At least part of the Company’s capital invested in acquiring properties will be directed towards purchasing properties at a discount to current (or projected) fair market value and reselling these properties for a profit. A major focus of the Company will be in acquiring properties in rehabilitation situations, when the appropriate opportunities arise.

Subject to the sole and absolute discretion of CFI to amend, modify, cancel, or revise any of the following at any time, the Company generally intends to purchase Properties based on the following criteria:

(a)          Loan-to-Value Ratio. The Loan-to-Value ratio for Properties will be the same as the target ratio for Loans as described above.

(b)          Location of Real Property Securing Loans. Properties will be located in the United States, with a primary focus in Pennsylvania, Maryland and New Jersey.

(c)          Fire and Casualty Insurance. Satisfactory fire and casualty insurance will be obtained for all properties and will name the Company as its loss payee. (See “Business Risks – Uninsured Losses” below.)

(d)          Title Insurance. Satisfactory title insurance coverage will be obtained for all Properties. The title insurance policy will name the Company as the insured and provide title insurance in an amount not less than the principal amount of the value of the property.

(e)          Environmental Reports. Environmental reports will not typically be ordered on Properties purchased or otherwise acquired by the Company. Notwithstanding the foregoing, if CFI, in its sole and absolute discretion, believes certain conditions exist that would pose a risk of environmental contamination, the Company may require an environmental report on the subject Property(ies).

(f)          Leverage. The Company may borrow funds to acquire Properties in the ordinary course of business. It may also require a line of credit to assure liquidity of its operations, such as to pay off a defaulted first mortgage to preserve the Company’s subordinate interest, or to fund a substantial loan when Investor funds are not yet sufficient to do so.

General Standards for Property Acquisition

The LLC will also engage in the following business: acquiring, managing, remodeling, developing, repairing and/or selling real property located throughout the United States with a primary focus in Pennsylvania, New Jersey and Maryland. Properties may be acquired from (without limitation) individuals, entities, institutional investors, financial institutions, governmental agencies and other sellers of real or personal property. Although the primary business of the Company is to fund Loans, the Company will also, as opportunities present themselves, engage in the foregoing business. Unless CFI decides in its sole and absolute discretion that it is in the best interests of the Fund to do otherwise, the LLC intends to generally acquire and purchase Properties based on the following criteria:

1.          Maximum Investment. The LLC may use the same standards as the Loan-to-Value Ratios set forth above to determine the maximum investment into a property. However, the LLC may use alternative guidelines for particular types of properties as follows:

Upon analysis in approximately twenty-four (24) months, CFI will re-evaluate the portfolio and purchase price to market value ratio maximums set by the LLC and may revise them at that time if it considers it to be in the best interests of the LLC. CFI will inform Members of the new Loan-to-Value ratios when and if CFI re-evaluates them.

2.          Fire and Casualty Insurance. Satisfactory fire and casualty insurance will be obtained for all properties and will name the LLC as its loss payee. (See “Business Risks – Uninsured Losses”).

3.          Title Insurance. Satisfactory title insurance coverage will be obtained for all properties. The title insurance policy will name the LLC as the insured and provide title insurance in an amount not less than the principal amount of the value of the property.

4.          Environmental Reports. Environmental reports will not typically be ordered on properties purchased or otherwise acquired by the LLC. Notwithstanding the foregoing, if CFI, in its sole and absolute discretion, believes certain conditions exist that would pose a risk of environmental contamination, the Company may require an environmental report on the subject Property.

It is presently anticipated that all LLC properties will be managed by CFI. CFI, at its sole and absolute discretion, may engage or partner with third party servicers to manage the acquisition, development, construction, leasing, management and sale of the various properties acquired by the LLC. CFI will oversee these third party servicers. These third party servicers will be compensated by the LLC. The LLC will not be responsible for any sub-servicers engaged by the third part servicers to assist in performing their servicing activities.

RISK FACTORS

The Company may attempt (in its sole and absolute discretion) to comply with requests for the early payment of the Notes if the financial position of the Company can accommodate it and the Company elects to do so (provided, that the Company is not under any obligation to permit an early redemption or withdrawal of the Notes requested by any Noteholder). Any investment in the Notes involves a significant degree of risk and is suitable only for investors who have NO NEED FOR LIQUIDITY in their investments. When analyzing this Offering, prospective investors should carefully consider each of the following risks.

INVESTMENT RISKS

No Registration: Limited Governmental Review

This Offering has not been registered with the U.S. Securities and Exchange Commission, or any State securities regulator or authority, nor is registration contemplated.

Limited Transferability of Interests

Although the Company may attempt to redeem Notes (when possible, in the Company’s sole and absolute discretion), there is no public market for the Notes and none is expected to develop in the future. Even if a potential buyer could be found, the transferability of these Notes is limited under Regulation A, as amended. Any sale or transfer of these Notes also requires the prior written consent of the Company. Investors must be capable of bearing the economic risks of this investment with the understanding that these Notes may not be liquidated by resale or redemption and should expect to hold their Notes as a long-term investment.

Size of the Offering

There is no assurance that the Company will obtain capital investments equal to the amount required to close the Offering. In addition, receipt of capital investments of less than the Maximum Offering Amount will reduce the ability of the Company to spread investment risks through diversification of its loan portfolio.

Speculative Nature of Investment

Investment in these Notes is speculative and, by investing, each Investor assumes the risk of losing the entire investment. The Company has limited operations as of the date of this Private Placement Memorandum and will be solely dependent upon the efforts of its officers and employees the loan and asset portfolio that is developed, all of which are subject to the risks described herein. Accordingly, only investors who are able to bear the loss of their entire investment and who otherwise meet the investor suitability standards should consider purchasing these Notes. (See “Investor Suitability” above.)

Investors Not Independently Represented

The Noteholders in the Company have not been represented by independent counsel with respect to this Offering. Attorneys assisting in the formation of the Company and the preparation of this Memorandum have represented only the Company and its principals and affiliates. (See “Conflicts of Interest” below.)

Adequacy of Working Capital Needed For Additional Financing

In the opinion of the Company, if the maximum number of Notes being offered is sold, the Company may have sufficient working capital to achieve its planned operations. However, there can be no assurance that even if the maximum number of Notes is sold that the Company would not be required to seek alternative or additional sources of financing. The Company is not restricted in the application of the funds as provided within this Memorandum under the caption “Use of Proceeds”.

Provisions in the Note

The Company has set the terms of the Note in a manner which is favorable to the Company and has not made an attempt to consider the favorability or suitability of such terms for any prospective investors.

Nature of Debt Obligations

The Notes represent debt obligations of the Company, and as such, would entail risks and benefits for the Noteholders that are customary for creditors, including (without limitation) risk of default and/or non-payment by the borrower. In the event of any liquidation or bankruptcy or similar event, Noteholders may receive less than the principal amount of their investment.

Noteholders will generally have limited to no control in the management and operation of the Company’s business and its decisions. Other individuals and constituencies (such as shareholders of the Company) may have greater control and rights (including, without limitation, approval or blocking rights with respect to business decisions of the Company) than Noteholders possess. Investors should understand that other participants in the Company may have interests that are substantially different than, and directly adverse to, the interests of Noteholders.

Projected Returns Not a Guarantee or Estimate

Any projected return or estimate for investments by the Company or its Loans is only a target and is in no way a financial projection, estimated result, guarantee, warranty, representation or promise of the Company. The Company and its management have no way of knowing or predicting whether such target return is realistic and achievable or whether such return will ever be realized for an investment in any particular Loan.

Conflicts of Interest

There are several areas in which the interests of various individuals and entities may conflict with each other. (See “Conflicts of Interest” below.)

Unidentified Assets

None of the specific assets in which the Company will invest in are identified at this time. Therefore, any potential investor is unable to evaluate the Loans portfolio to determine whether to invest in the Company. However, the general business goals of the Company are to make Loans as further described herein. The Company may later have specific, identifiable portfolio data which Noteholders may review upon their prior written request to the Company.

Investment Profile and Mix May Change

The Company reserves the right, in its sole and absolute discretion, to modify, change or revise its typical investment profile and the mix of Loans that it invests or otherwise participates in, and accordingly, Noteholders have no guarantee, and should not assume that the investment mix and profile of the Company will not change substantially over time.

BUSINESS RISKS

Reliance on Key Personnel

The key personnel of the Company (currently, the President) will make virtually all decisions with respect to the management of the Company including, without limitation, the determination as to which loans to make and the terms thereof. The Noteholders will not have a voice in the management decisions of the Company and can exercise only a limited (if any) amount of control over the Company. The Company gives no assurance that the Company will operate at a profit or positive cash flow. The Company is dependent to a substantial degree on the continued services of its key personnel. In the event of the death, incapacity or other termination of key personnel, the business and operations of the Company may be adversely affected. Furthermore, all investments related to specific Loans will be undertaken by the Company without the Noteholders having any ability to directly affect such transactions.

Competition

Because of the nature of the Company's business, the Company's profitability will depend to a large degree on the future availability of capital. In particular, the Company will compete with private lenders, institutional lenders and others engaged in the mortgage lending business, many of whom have greater financial resources and experience than the Company.

Key Personnel Not Required to Devote Full-Time to the Business of the Company

The Company’s key personnel and its officers and directors are not required to devote their respective individual capacities full time to the Company's affairs, but only such time as the affairs of the Company may reasonably require.

Competition with Affiliates of the Company

Though they currently have no intention to do so, there is no restriction preventing the Company or any of its affiliates, principals, officers, directors or management from competing with one another by investing in collateral liens or sponsoring the formation of other investment groups like the Company. The Company may make decisions that may at times favor persons other than the Company. Unless otherwise mandatorily required to the contrary by applicable law, the Company and its affiliates, principals and management are exonerated from any liability for investment opportunities given to other persons, including (without limitation) affiliates.

Investment Delays

There may be a delay between the time subscription funds are accepted from investors and the time when such funds are deposited into the Company and begin to participate in the investment yield offered herein.

Lack of Regulation

The management and investment practices of the Company are not supervised or regulated by any Federal or State legal or regulatory authority.

Tax and ERISA Risks

An investment in the Company involves certain tax risks of general application to all investors and certain other risks specifically applicable to Keogh accounts, Individual Retirement Accounts and other tax-exempt investors. (See “Income Tax Considerations” and “ERISA Considerations” below).

Loan Defaults and Foreclosures

The Company will invest in Loans and take the risk that borrowers will default on those loans and other risks that lenders typically face, some of which are detailed in this Offering. Loans may be made to borrowers who do not qualify for loans from more traditional sources of financing, such as (without limitation) banks and savings and loans associations. Loans may generally provide for a monthly payment from the borrower followed by a “balloon” payment at the loan’s maturity. Borrowers may be unable to pay such a balloon payment and are compelled to refinance the balloon amount into a new loan. Fluctuations in the interest rates, unavailability of mortgage funds, and a decrease in the value of the real property securing the loan could adversely affect the borrower’s ability to refinance their loans at maturity.

The Company will generally look to the underlying property securing the loan to determine whether to make the loan to the borrower and, to a lesser extent, the credit rating a borrower has. Nonetheless, borrowers will need to demonstrate adequate ability to meet its financial obligations under the terms of any loan which the Company originates or purchases.

To determine the fair market value of the property securing the loan, the Company will primarily rely on an appraisal, the Company’s opinion of value of the property, or other similar opinion. Appraisals are a judgment of an individual appraiser’s interpretation of a property’s value. Due to the differences in individual opinions, values may vary from one appraiser to another. Furthermore, the appraisal is merely the value of the real property at the time the loan is originated. Market fluctuations and other conditions could cause the value of real property to decline over time.

If the borrower defaults on the loan, the Company may take the deed in lieu of foreclosure or be forced to purchase the property at a foreclosure sale. If the Company cannot quickly sell the real property and the property does not produce significant income, the profitability and ability to repay the Company will be adversely affected.

Due to certain provisions of State law that may be applicable to all real estate loans, if real property security proves insufficient to repay amounts owing to the Company, it is unlikely that the Company will be able to recover any deficiency from the borrower.

Finally, the recovery of sums advanced by the Company in making or investing in mortgage loans and protecting its security may also be delayed or impaired by the operation of the federal bankruptcy laws or by irregularities in the manner in which the loan was made. Any borrower has the ability to delay a foreclosure sale for a period ranging from several months to several years by filing a petition in bankruptcy which automatically stays any actions to enforce the terms of the loan. It can be assumed that such delays and the costs associated therewith will reduce the profitability of the Company.

Possible Repeal of Usury Exemption

To the extent that any Loans are arranged by or through a mortgage lending license and are therefore generally exempt from the otherwise applicable state’s usury limitation, should this exemption be repealed, the Company may no longer be able to originate loans in excess of the usury limit, potentially reducing its return on investment or forcing it to limit its lending activities or otherwise burdening its profitability and cash flow.

Uninsured and Underinsured Losses

The Company intends to maintain comprehensive insurance coverage of the type and amount it believes is customarily obtained by any lender of real estate. There are, however, certain types of losses, generally of a catastrophic nature, such as earthquakes, war and floods, that may be uninsurable or not economically insurable from which the real estate properties may be at risk. In addition, because of coverage limits and deductibles, insurance coverage in the event of a substantial loss may not be sufficient to pay the full current market value or current replacement cost of the underlying investment. Inflation, changes in building codes and ordinances, environmental considerations and other factors also might make it unfeasible to use insurance proceeds to replace a property after it has been damaged or destroyed. Under such circumstances, the insurance proceeds received by the Company might not be adequate to restore its economic position with respect to its real estate properties. Additionally, the Company does not intend to require mortgage insurance on Loans, which would protect the Company from losses due to defaults by borrowers.

Fluctuations in Interest Rates

Mortgage interest rates are subject to abrupt and substantial fluctuations and the purchase of Notes are a relatively illiquid investment. If prevailing interest rates rise above the average interest rate being earned by Notes, the Noteholders may wish to liquidate their investment to take advantage of higher available returns but may be unable to do so due to restrictions on transfer and withdrawal.

Litigation Risks

The Company will act in good faith and use reasonable judgment in selecting borrowers and making, purchasing, and managing the Loans. However, as a lender the Company is exposed to the risk of litigation by a borrower, tenant or other counter-party for any warranted or unwarranted allegations regarding the terms of any transaction or the actions or representations of the Company in making, managing or foreclosing on Loans. It is impossible to foresee the allegations that a party will bring against the Company, but the Company will use its best efforts to avoid litigation if, in its sole and absolute discretion, it is in the best interests of the Company. If the Company is required to incur legal fees and costs to respond to any lawsuit, the costs and fees could have an adverse impact on the Company’s cash flow and profitability.

Participation with Other Parties

While the Company does not expect to participate in transactions with other parties, there is a possibility that it may do so. When participating in Loans with other lenders the Company may not have control over the determination of when and how to enforce a default, depending on the terms of any participation agreement with the other lenders or owners, other lenders or owners may have varied amounts of input into such decision-making process, including (without limitation) the ultimate decision-making power on if and when to enforce a default. There is no certainty as to who will be a lead lender or lead investor (as applicable) in a situation where the Company participates in ownership of a Loan with another entity.

Risks of Government Action

While the Company will use its best efforts to comply with all laws, including federal, state and local laws and regulations, there is a possibility of governmental action to enforce any alleged violations of (without limitation) mortgage lending laws which may result in legal fees and damage awards that would adversely affect the applicable entity.

Risks of Leveraging

The Company may borrow funds from any third party sources (including, but not limited to, lenders and investors) to fund investments in Loans. These additional sources of capital may be secured by Loans held by the Company. In order to obtain such additional capital, the Company may assign part or its entire asset portfolio to the lender or investor. Such money may bear interest at a variable rate, whereas the Company may be making fixed rate loans. Therefore, if prevailing interest rates rise, the cost of money could exceed the income earned from that money, thus reducing the Company’s profitability or causing losses.

Risks of Real Estate Ownership

There is no assurance that the Company’s owned properties will be profitable or that cash from operations will be available for distribution to the Noteholders. Because real estate, like many other types of long-term investments, historically has experienced significant fluctuations and cycles in value, specific market conditions may result in occasional or permanent reductions in the value of property interests. The marketability and value of the Properties will depend upon many factors beyond the control of the Company, including (without limitation):

Risks of Development, Renovation and Undeveloped Property

The Company anticipates that it will invest primarily in existing properties that require varying degrees of development. In addition, some properties may be under construction or under contract to be developed or redeveloped. Properties that involve development or redevelopment will be subject to the general real estate risks described above and will also be subject to additional risks, such as unanticipated delays or excess costs due to factors beyond the control of the Company. These factors may include (without limitation):

Delays in completing any development or renovation project will cause corresponding delays in the receipt of operating income and, consequently, the distribution of any cash flow by the Company with respect to such property.

Risks Associated With Buying Contaminated Properties

The Company may acquire or invest in properties with known environmental conditions for the purpose of remediating the contamination. Following completion of the remediation, such properties would generally be resold to a developer. Such investments would generally be made only in conjunction with an operating partner with specific expertise in such properties and only where the Company believes that the liabilities associated with owning an interest in such a property can be appropriately protected against through insurance, indemnification or otherwise.

Compliance with the Americans with Disabilities Act and Other Changes in Governmental Rules and Regulations

Under the Americans with Disabilities Act of 1990 (the "ADA"), all public properties are required to meet certain federal requirements related to access and use by disabled persons. Properties acquired by the Company or in which it makes a property investment may not be in compliance with the ADA. If a property is not in compliance with the ADA, then the Company may be required to make modifications to such property to bring it into compliance, or face the possibility of imposition, or an award, of damages to private litigants. In addition, changes in governmental rules and regulations or enforcement policies affecting the use or operation of the properties, including changes to building, fire and life-safety codes, may occur which could have adverse consequences to the Company.

CONFLICTS OF INTEREST

The following is a list of some of the important areas in which the interests of the Company and each of its principals, directors, officers and/or affiliates may conflict with one another. The Noteholders must rely on the general fiduciary standards (as and if applicable) and other duties which may apply to such principals, directors, officers and affiliates to prevent unfairness by any of the aforementioned in a transaction with consequences for the Noteholders. It is expected that numerous transactions will occur between the Company and its principals, directors, officers and/or affiliates, and no outside or independent review of these transactions will be performed. ALL PROSPECTIVE INVESTORS SHOULD UNDERSTAND THAT NOTEHOLDERS WILL HAVE ABSOLUTELY NO DIRECT INTEREST, CONTROL, VOTING RIGHTS OR INVOLEMENT IN THE BUSINESS, AFFAIRS OR GOVERNANCE OF THE COMPANY. EACH PROSPECTIVE INVESTOR SHOULD UNDERSTAND THAT SELF-DEALING AND AFFILIATE-AFFILIATE TRANSACTIONS WILL ROUTINELY OCCUR AS A RESULT OF THE MATTERS CONTEMPLATED HEREIN. ALL PROSPECTIVE INVESTORS ARE STRONGLY ENCOURAGED TO CONSULT THEIR OWN INDEPENDENT LEGAL COUNSEL TO REVIEW AND ADVISE THEM WITH RESPECT TO THIS OFFERING AND MEMORANDUM.

Loan Origination Fees

None of the compensation set forth under “Compensation” was determined through arm's-length negotiations. Any change in such fees may have a direct, adverse effect upon the fees that borrowers will pay to the Company, and thus, may reduce the overall profitability and cash flow of the Company. This conflict of interest will exist in connection with every loan the Company makes.

Loan Servicing by the Company

As set forth above under “Compensation”, the Company and/or its affiliates will receive compensation for servicing the Loans. The Company has reserved the right to retain other firms in addition to, or in lieu of, the Servicer to perform the various brokerage services, loan servicing and other activities in connection with the Loans. Such other firms may or may not be affiliated with the Company. Loan servicing firms not affiliated with the Company may or may not provide comparable services on terms more favorable to the Company.

Other Companies or Businesses

The Company and each of its principals, directors, officers or affiliates, may engage, for their own account or for the account of others, in other business ventures similar to that of the Company. Neither the Company nor any Noteholder shall be entitled to any interest therein or therefrom.

The Company may have conflicts of interest in allocating management time, services and functions between various existing companies, the Company and any future companies which it may organize as well as other business ventures in which it or its managers, principals, directors, officers and/or affiliates may be or become involved.

Purchase, Sale and/or Hypothecation of Loans

The Company and each of its principals, directors, officers or affiliates, may sell, buy or hypothecate loans (use loans as collateral for another loan) to each other, provided that such loans meet the underwriting criteria set forth above. The Company or any of its managers, principals, directors, officers and/or affiliates, may make a profit on the sale of an existing Loan to an affiliated individual or entity. There will be no independent review or assessment of the value of such Loans.

Conflict with Related Programs

The Company and its principals, directors, officers or affiliates, may join with other entities organized for similar purposes as partners, joint venturers or co-owners under some form of ownership in certain loans or in the ownership of real property. The interests such other individuals/entities may conflict and all such individuals/entities may not be able to resolve such conflicts in a manner that serves the best interests of the Company and/or Noteholders.

Competition with Affiliates

There is no restriction preventing the Company or any of its affiliates, officers, directors or management from competing with the Company by investing in collateral liens or sponsoring the formation of other investment groups like the Company to invest or otherwise participate in similar areas. Subject only to limitations mandatorily imposed by corporate law, the Company and its affiliates, officers, directors and/or management may freely compete with or against the Company.

Sale of Real Estate to Affiliates

In the event that the Company becomes the owner of any real property by reason of foreclosure, the first priority will be to arrange for the sale of the property for a price that will permit the recovery of the full amount of invested capital plus accrued but unpaid interest and other charges, or so much thereof as can reasonably be obtained in light of current market conditions. In order to facilitate such a sale, the Company may, but is not required to, arrange a sale to persons or entities affiliated with it or controlled by it, (e.g. to a limited liability company formed by the Company). The Company will be subject to conflicts of interest in arranging such sales since it will represent or have an interest in both parties to the transaction. There will not be any independent review by any outside parties of such transactions. No assurance can be given that the sale price for property would be fair, reasonable or negotiated at ‘arms-length’.

SOURCES OF INCOME TO THE COMPANY

The principal sources of the Company’s revenues are listed below. CFI will explore other sources of revenues as operations continue. Any and all of the Company’s revenues, including those set forth below, shall be used towards paying the Company’s obligations to the Noteholders. Any remaining income shall be paid to CFI as compensation for services rendered. Any income retained for purposes of a loss reserve shall be determined and established by CFI, at its sole and absolute discretion.

CFI will also earn interest income from loans originated by the Company or CFI. Borrowers pay interest to CFI on a monthly basis on the full amount of their indebtedness. The Company will generally attempt to charge borrowers a higher interest rate (“spread”) than the rates paid to Noteholders in this Offering. Additional sources of income to the Company will be from the potential purchase, rehabilitation and resale of Company owned properties. Opportunities arise to purchase and rehabilitate properties with good resale potential.

Any and all of the Company’s revenues, including those set forth above, shall be used towards paying the Company’s obligations to the Noteholders. Any remaining income shall be paid to CFI as compensation for services rendered. Any income retained for purposes of a loss reserve shall be determined and established by CFI, at its sole and absolute discretion.

KEY PERSONNEL

The Company is a wholly owned subsidiary of CFI. CFI’s chief executive officer and director is Jeffrey Cella. CFI’s senior vice president and director is Timothy Messerli. The Company will hire additional officers, directors and employees once sufficient resources have been acquired to support the costs for such positions, including, but not limited to, a loan officer. The loan officer will be critical to support the anticipated rapid growth of the Company and to provide a level of management depth. The role of the loan officer will be to help manage the daily flow of activities between prospects, wholesalers/brokers and existing borrowers and to provide a second level of oversight as well as generate additional business for CFI.

The following individuals comprise the officers and directors of the Company as of the date of this Offering Circular:

Jeffrey Cella

President and Chief Executive Officer of Conquest Funding, Inc., Parent Company of the LLC

Jeff has worked in the commercial lending business for over 30 years, most of those years as a commercial lender for various regional and national banking institutions. He has underwritten many types of commercial loans from small real estate loans to large multimillion dollar commercial and industrial projects. Jeff started his first private equity fund in 2011 with the Conquest Fund targeting the residential real estate investor looking for purchase and rehab loans. The fund has a solid track record of performance generating over $10 million in loans during that time and never missing an interest payment to any investor. Jeff was also a principal and a key member in starting three other private equity funds with a well-known real estate broker and investor, Donald Wenner of DLP Realty. Jeff served as Senior Vice President and Chief Financial Officer and was key in bringing the fund concept to Don and creating DLP Capital Advisors, a very successful fund management company. While Jeff enjoyed that process he was looking to do something a little different.

He has always believed that the ability to invest in private investments should be available to everyone, not just Accredited Investors. Upon discovering Regulation A, Jeff decided to create a new offering to invite everyone to participate in this exciting opportunity. He also wanted to widen the scope beyond purchase and rehab loans. Jeff has now created a new offering designed to attract not just the small real estate investor, but also commercial bridge financing opportunities. With all of Jeff’s years of experience in the commercial lending business he has developed a substantial number of investors, borrowers and loan brokers to quickly grow this new fund.

Jeff is a graduate of Kutztown University holds Bachelors of Science degree in Economics.

Jeff brought the same high level service, professionalism and integrity to the private equity business as he did with his banking career with a focus on outstanding service and attention to detail. In addition to his many years of lending experience, he is also a real estate investor and owns several single family and multi-family investment properties. He has the real life experience to understand the needs of the real estate investor while protecting the financial interests of the Fund’s investors.

Jeff is responsible for the day to day operations of the Company and is the senior loan officer of the Company. Jeff will utilize his extensive relationships with the financial community to seek additional staff members as the company grows.

Timothy Messerli

Senior Vice President and Director of Conquest Funding, Inc., Parent Company of the LLC

For several years, Tim had played a major role in the establishment and growth of the company and is co- owner of CFI. As Senior Vice President and Director of Field Operations for Conquest Funding, Inc., he has personally inspected most of the properties financed by CFI and will continue to be involved in the property inspection process.

Tim is a Fordham University graduate holding a Bachelor of Science Degree in Accounting.

Tim has an extensive background in management, construction management, finance, budgeting, strategic planning, sales and marketing and human resources. His background includes a diverse skill set ranging from Internal Auditor, National Bank of North America, New York, New York, Director of Operations with Bohlen-Reis Inc. General Contractor in Great Barrington, Massachusetts; Mortgage Consultant, IPI Skyscraper Mortgage Corp., Englewood Cliffs New Jersey; President of The MTR Group LLC, a business consulting company located in Allentown PA.

Tim’s knowledge of construction, extensive business and sales experience along with his attention to detail is a tremendous asset to CFI. His role going forward will involve all aspects of the business from overseeing the inspection process to working closely with borrowers, raising capital, marketing and developing the overall strategic vision of the company.

Managers / Directors / Executive Officers / Significant Employees Information

Compensation of Managers and Executive Officers

1.            The Company has no officers or directors. It is managed and wholly owned by Conquest Funding, Inc., a Pennsylvania corporation. The Company is a newly formed entity with no operating history. For these reasons, CFI has yet to receive any compensation in its capacity as Manager of the Company.

CFI’S ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company is a newly formed company and has a limited operating history. The Company’s current cash balance is $1,000.00 as of December 23, 2015. The cash balance is not sufficient to fund the limited levels of operations for any period of time. The Company has been utilizing and may utilize funds from the Parent Company, which has agreed to advance funds to allow the Company to operate its business including paying for offering costs, filing fees and professional fees. In order to execute the plan of operations, the Company will require varying amounts of capital based on the Loans and/or properties the Company intends to fund or acquire. The Company intends to continuously offer Notes to Investors on an as needed basis to operate is business plan. (See “Operational Plan” and “Lending Standards” above.)

CFI has chosen a unique structure for this fund believing in rewarding investors first. CFI will not charge any management fees for this fund and will not charge any compensation directly to the fund. Typically fund managers receive 1%, 2%, and even 3% right off the top for raising capital before any profit is generated with the capital raised. Because this fund is open to both accredited and non-accredited investors, we believe we have an even greater responsibility to all the investors to only be paid after the fund produces a profit. The fund will receive income from the loans it makes in the form of interest, fee and points and in some situations profit sharing in certain equity transactions. The only expenses the fund will incur are those associates with interest paid to the investors. CFI intends to retain some portion of the profit in the fund to create a loss reserve (the “Loan Loss Reserve”) to sustain the Company in the event the Company suffers a loss due to one or more loan defaults and it was unable to fully recover all the principal of the Loan. The exact amount of the Loan Loss Reserve will be determined by CFI from time to time based on the profitability of the Company. The excess profits of the Company will flow to the Parent Company.

Projection

Reg A Tier 1 allows issuers to raise capital from up to five hundred (500) non-accredited investors and two thousand (2000) Accredited Investors. This is an exciting development and CFI believes this will make it easier for the Company to raise funds from a broader investor base. The fundraising goal for the first year is Six Million Dollars ($6,000,000) with Ten Million Dollars ($10,000,000) by end of the second year and Fifteen Million ($15,000,000) by the end of our third year. Based on these numbers our projections for the Offering will look like this assuming a sufficient number loans can be made with this capital.

Gross Income

Gross Income is made up of interest generated from making loans, points charged on the loans, plus fees charged for appraisals and inspections. We believe market interest rates for these types of loans will range between nine percent (9%) and fifteen percent (15%) depending on various factors, such as the borrower’s credit history, experience, financial condition, along with the amount of money the borrower is putting into the transaction. We used an average annual loan rate of twelve and one half percent (12.5%) in this model. Loan origination fees (“Points”) charged on a loan can range from one percent (1%) to ten percent (10%) of the Loan amount. On average, the Company intends to charge two and eight tenths percent (2.8%), which is average in our market. The appraisal fees are the cost we incur and in turn charge the borrower to obtain a third party appraisal on a property. The inspection fees are paid by the borrower and cost one hundred fifty dollars ($150) per inspection. We typically will have three (3) to four (4) inspections on an average project and these fees are paid to cover our cost of performing inspections.

Expenses

CFI believes based on past experience and with the mix of investment options ranging from five percent (5%) up to ten percent (10%) annual return, the average cost of funds will be approximately nine percent (9%). We also believe based on loan demand in our market that the Company will find more than enough qualified borrowers to place all the funds we raise. Capital will be raised based on an as needed basis, and will depend on the demand for loans. All other expenses for salaries, operations, advertising, audits, etc. will be paid by CFI.

Equity Loan Loss Reserve

CFI intends to retain some portion of the profit in the fund to create an equity Loan Loss Reserve so in the event the fund would sustain a loss due to one or more loan defaults and it was unable to fully recover all the principal of the loan, the Loan Loss Reserve will help to insulate the Noteholders from loss. The exact amount will be determined by CFI from time to time based on the profitability of the fund, however we did use an average of five percent (5%) of gross profit in the projection to show how this will impact the fund’s performance. This is not a true expense as it is not actually paid out, but more just a bookkeeping entry to retain part of the profits increasing the equity of the fund.

Excess profits of the Company

The excess profits of the Company will flow from the Company to CFI. The Company will not incur any other expenses as all other expenses related to the operations of the lending business and management of the Company are paid through CFI.

Operational Plan

Marketing & Sales

Phase I – The marketing and sales will initially be handled by the principals and those staff members they hire as needed. Both Jeffrey Cella and Timothy Messerli have extensive contacts in the local business community with loan brokers, bankers, real estate agents, real estate wholesalers, property managers, investors, networking groups etc. and will tap those resources first. CFI will be actively looking for borrowers and investors at the same time with a simple message of providing great value to our investors and borrowers through quick response times, creative solutions, and understanding the people behind the projects. CFI will also use a web based marketing effort and utilizing the resources and client base from local investment advisors. Phase II will be a larger campaign through direct mail, email, public events, radio spots and printed media to generate a larger awareness that this investment in available to both accredited and non-accredited investors.

Investor and Borrower operations

CFI plans to use a third party servicing company to manage our investor and borrower information and record keeping. The service provider will calculate and make interest payments to investors, collect and process loan payments from borrowers, provide various reporting for monthly and year-end statements and provide additional areas of support where needed. CFI is in discussions with companies providing these services to the private lending industry.

Jeff will be primarily responsible for investor relations and borrower underwriting and loan approval, loan documentation and settlements. Tim’s primary function is asset protection in the field, making sure the properties fit our guidelines, the borrower’s rehab estimates are reasonable and the projects are getting completed in a reasonable time frame. He will also be the onsite inspector for many of these properties providing his insight and knowledge regarding each property we take as collateral. Tim will also coordinate the use of other professional personnel such as architects, engineers, safety inspectors, environmental experts for larger commercial transactions where we may need these services. Tim will actively engaged in developing investors and borrowers as part of our overall marketing strategy.

We anticipate the hiring of an administrative support person and a part time internal accountant within the first 12 months of operations. Again these expenses are all paid for through CFI and not directly from the Company.

LEGAL PROCEEDINGS

Neither the Company nor any of its directors or officers, are now, or within the past five (5) years have been, involved in any material litigation or arbitration.

INCOME TAX CONSIDERATIONS

Federal Income Tax Aspects

The following discussion generally summarizes the material federal income tax consequences of an investment in the Company based upon the existing provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and applicable Treasury regulations thereunder, current administrative rulings and procedures and applicable judicial decisions. However, it is not intended to be a complete description of all tax consequences to prospective Investors with respect to their investment in the Company. No assurance can be given that the Internal Revenue Service (the “IRS”) will agree with the interpretation of the current federal income tax laws and regulations summarized below. In addition, the Company or the Investors may be subject to state and local taxes in jurisdictions in which the Company may be deemed to be doing business.

ACCORDINGLY, ALL PROSPECTIVE INVESTORS SHOULD INDEPENDENTLY SATISFY THEMSELVES REGARDING THE POTENTIAL FEDERAL AND STATE TAX CONSEQUENCES OF PARTICIPATION IN THE COMPANY AND ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS, ATTORNEYS OR ACCOUNTANTS IN CONNECTION WITH ANY INTEREST IN THE COMPANY. EACH PROSPECTIVE INVESTOR/SHAREHOLDER SHOULD SEEK, AND RELY UPON, THE ADVICE OF THEIR OWN TAX ADVISORS IN EVALUATING THE SUITABILITY OF AN INVESTMENT IN THE COMPANY IN LIGHT OF THEIR PARTICULAR INVESTMENT AND TAX SITUATION.

Tax Law Subject to Change

Frequent and substantial changes have been made, and will likely continue to be made, to the federal and state income tax laws. The changes made to the tax laws by legislation are pervasive, and in many cases, have yet to be interpreted by the IRS or the courts.

State and Local Taxes

A description or analysis of the state and local tax consequences of an investment in the Company is beyond the scope of this discussion. Prospective Noteholders are advised to consult their own tax counsel and advisors regarding these consequences and the preparation of any state or local tax returns that an Investor may be required to file.

IRS Audits

Returns filed by the Company are subject to audit by the IRS. The IRS devotes considerable attention to the proper application of the tax laws to corporations. An audit of the Company’s return may lead to adjustments which adversely affect the federal income tax treatment of Notes and cause Noteholders to be liable for tax deficiencies, interest thereon and penalties for underpayment. An audit of the Company’s tax return could also lead to an audit of their individual tax return that may not otherwise have occurred, and to the adjustment of items unrelated to the Company. Prospective investors should make their determination to invest based on the economic considerations of the Company rather than any anticipated tax benefits. Furthermore, the IRS has taken the position in Temp. Reg. 1.163-9T that any interest on income taxes owed by an individual is personal interest, subject to limitations on deduction, regardless of the nature of the activity that produced the income that was the source of the tax.

Understatement Penalties

The Company will be subject to a substantial understatement penalty in the event that it understates its income tax. The IRS imposes a penalty of 20% on any substantial understatement of income tax. Furthermore, the IRS can charge interest on underpayments of income tax exceeding One Hundred Thousand ($100,000) for any tax year owing by certain corporations at a rate that is higher than the normal interest rate. The Company strongly advises prospective investors to consult with their own tax advisor to be sure that they fully evaluate the proposed tax treatment of Company as described herein.

Accounting and Reports

Annual reports concerning the LLC’s business affairs, including the LLC’s annual income tax return, will be provided to Noteholders who request them in writing. CFI may, at its sole and absolute discretion, designate any person to provide tax and accounting advice to the LLC, at any time and for any reason.

CFI presently intends to maintain the LLC’s books and records on the accrual basis for bookkeeping and accounting purposes, and also intends to use the accrual basis method of reporting income and losses for federal income tax purposes. CFI reserves the right to change such methods of accounting upon written notice to Noteholders. After the LLC reaches One Million Dollars ($1,000,000) in assets under management, CFI further intends, at its sole and absolute discretion, to obtain audited financial statements to be distributed to the Noteholders on an annual basis.

ERISA CONSIDERATIONS

The following is a discussion of how certain requirements of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and the Code relating to Employee Benefit Plans and certain Other Benefit Arrangements (each as defined below) may affect an investment in the Notes. It is not, however, a complete or comprehensive discussion of all employee benefits aspects of such an investment. If the prospective investors are trustees or other fiduciaries of an Employee Benefit Plan or Other Benefit Arrangement, before purchasing Units, they should consult with their own independent legal counsel to assure that the investment does not violate any of the applicable requirements of ERISA or the Code, including, without limitation, the ERISA fiduciary rules and the prohibited transaction requirements of ERISA and the Code.

ERISA Fiduciary Duties

Under ERISA, persons who serve as trustees or other fiduciaries of an Employee Benefit Plan have certain duties, obligations and responsibilities with respect to the participants and beneficiaries of such plans. Among the ERISA fiduciary duties are the duty to invest the assets of the plan prudently, and the duty to diversify the investment of plan assets so as to minimize the risk of large losses. An “Employee Benefit Plan” is a plan subject to ERISA that is an employee pension benefit plan (such as a defined benefit pension plan or a section 401(k) or 403(b) plan) or any employee welfare benefit plan (such as an employee group health plan).

Prohibited Transaction Requirements

Section 406 of ERISA and Section 4975 of the Code proscribe certain dealings between Employee Benefit Plans or Other Benefit Arrangements, on the one hand, and “parties-in interest” or “disqualified persons” with respect to those plans or arrangements on the other. An “Other Benefit Arrangement” is a benefit arrangement described in Section 4975(e)(1) of the Code (such as a self-directed individual retirement account (“IRA”), other than an Employee Benefit Plan.

Prohibited transactions include, directly or indirectly, any of the following transactions between an Employee Benefit Plan or Other Benefit Arrangement and a party in interest or disqualified person:

(a)          sales or exchanges of property;

(b)          lending of money or other extension of credit;

(c)          furnishing of goods, services or facilities; and

(d)          transfers to, or use by or for the benefit of, a party in interest or disqualified person of any assets of the Employee Benefit Plan or Other Benefit Arrangement.

In addition, prohibited transactions include any transaction where a trustee or other fiduciary of an Employee Benefit Plan or Other Benefit Arrangement:

(a)          deals with plan assets for his own account,

(b)          acts on the behalf of parties whose interests are adverse to the interest of the plan, or

(c)          receives consideration for his own personal account from any party dealing with the plan with respect to plan assets.

The terms “party in interest” under ERISA and “disqualified person” under the Code have similar definitions. The terms include persons who have particular relationships with respect to an Employee Benefit Plan or Other Benefit Arrangement, such as:

(a)          fiduciaries;

(b)          persons rendering services of any nature to the plan;

(c)          employers any of whose employees are participants in the plan, as well as owners of 50% or more of the equity interests of such employers;

(d)          spouses, lineal ascendants, lineal descendants, and spouses of such ascendants or descendants of any of the above persons;

(e)          employees, officers, directors and 10% or more owners of such fiduciaries, service providers, employers or owners;

(f)          entities in which any of the above-described parties hold interests of 50% or more; and

(g)          10% or more joint venturers or partners of certain of the parties described above.

Certain transactions between Employee Benefit Plans or Other Benefit Arrangements and parties in interest or disqualified persons that would otherwise be prohibited transactions are exempt from the prohibited transaction rules due to the application of certain statutory or regulatory exemptions. In addition, the United States Department of Labor (the “DOL”) has issued class exemptions and individual exemptions for certain types of transactions. Violations of the prohibited transaction rules may require the prohibited transactions to be rescinded and will cause the parties in interest or disqualified persons to be subject to excise taxes under Section 4975 of the Code.

Investments in the Company

If a prospective investor is a fiduciary of an Employee Benefit Plan, the investor must act prudently and ensure that the plan’s assets are adequately diversified to satisfy the ERISA fiduciary duty requirements. Whether an investment in the Company is prudent and whether an Employee Benefit Plan’s investments are adequately diversified must be determined by the plan’s fiduciaries in light of all of the relevant facts and circumstances. A fiduciary should consider, among other factors, the limited marketability of the Notes.

Prospective investors also should be aware that under certain circumstances the DOL may view the underlying assets of the Company as “plan assets” for purposes of the ERISA fiduciary rules and the ERISA and Internal Revenue Code prohibited transaction rules. DOL regulations indicate that Company assets will not be considered plan assets if less than 25% of the value of the Notes is held by Employee Benefit Plans and Other Benefit Arrangements.

The Company anticipates that if any investor is an Employee Benefit Plan subject to ERISA, the Company will limit the investments by all Employee Benefit Plans and Other Benefit Arrangements to ensure that the 25% limit is not exceeded. Because the 25% limit is determined after every subscription or redemption, the Company has the authority to require the redemption of all or some of the Notes held by any Investor that is an Employee Benefit Plan or Other Benefit Arrangement if the continued holding of such Notes, in the sole opinion of the Company, could result in the Company being subject to the ERISA fiduciary rules.

If there are no Employee Benefit Plan investors in the Company, the Company anticipates that investments by Other Benefit Arrangements (such as self-directed IRAs) may exceed the 25% limit. This may cause the underlying assets of the Company to be considered plan assets for purposes of the Code prohibited transaction rules. In such a case, the Other Benefit Arrangement investors must ensure that their investments do not constitute prohibited transactions under Section 4975 of the Code. Such investors should consult with independent legal counsel on these issues.

Special Limitations

The discussion of the ERISA fiduciary aspects and the ERISA and Code prohibited transaction rules contained in this Memorandum is not intended as a substitute for careful planning. The applicability of ERISA fiduciary rules and the ERISA or Code prohibited transaction rules to Investors may vary from one Investor to another, depending upon that Investor’s situation. Accordingly, prospective investors should consult with their own attorneys, accountants and other personal advisors as to the effect of ERISA and the Code on their situation of a purchase and ownership of the Notes and as to potential changes in the applicable law.

LEGAL MATTERS

The Company has retained Geraci Law Firm of Irvine, California to advise it in connection with the preparation of this Offering, the Promissory Note, the Subscription Agreement and any other documents related thereto. Geraci Law Firm has not been retained to represent the interests of any Investors or Noteholders in connection with this Offering. All investors that are evaluating or purchasing Promissory Notes should retain their own independent legal counsel to review this Offering, the Memorandum, the Promissory Note, the Subscription Agreement and any other documents and matters related whatsoever to this Offering, and to advise them accordingly.

ADDITIONAL INFORMATION AND UNDERTAKINGS

The Company undertakes to make available to each prospective investor every opportunity to obtain any additional information from the Company necessary to verify the accuracy of the information contained in this Memorandum, to the extent that the Company possesses such information or can acquire it without unreasonable effort or expense. This additional information includes, without limitation, all the organizational documents of the Company, recent financial statements for the Company and all other documents or instruments relating to the operation and business of the Company and material to this offering and the transactions contemplated and described in this Memorandum.

SIGNATURES

Pursuant to the requirements of Regulation A, as amended, the Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this Offering Circular and the correlating Offering Statement to be signed on its behalf, by the undersigned, thereunto duly authorized, in the city of Allentown, Pennsylvania.

CF Fund II, LLC

CF Fund II, LLC

November 30, 2015

Audited Financial Statement

CF Fund II, LLC

Table of Contents

November 30, 2015

Independent Auditors’ Report

To the Member

CF Fund II, LLC

Allentown, Pennsylvania

Report on the Financial Statement

We have audited the accompanying balance sheet of CF Fund II, LLC, a Pennsylvania limited liability company, as of November 30, 2015, the end of the initial accounting period, and the related notes.

Management’s Responsibility for the Financial Statement

Management is responsible for the preparation and fair presentation of this financial statement in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statement that is free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to CF Fund II, LLC’s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of CF Fund II, LLC’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

To the Member

CF Fund II, LLC

Allentown, Pennsylvania

Opinion

In our opinion, the balance sheet referred to above presents fairly, in all material respects, the financial position of CF Fund II, LLC as of November 30, 2015 in accordance with accounting principles generally accepted in the United States of America.

Matter of Emphasis

The accompanying financial statement has been prepared assuming that CF Fund II, LLC will continue as a going concern. As discussed in Note 2 to the financial statement, CF Fund II, LLC’s ability to commence operations will depend on its ability to obtain investor financing and secure loan investments, which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to this matter are also described in Note 1. The balance sheet does not include any adjustments that might result from the outcome of this uncertainty.

CF Fund II, LLC

Balance Sheet

November 30, 2015

See Notes to Financial Statement

CF Fund II, LLC

Notes to Financial Statement

November 30, 2015

Organization

CF Fund II, LLC (the “Company”), a Pennsylvania limited liability company and wholly-owned subsidiary of Conquest Funding, Inc. (“CFI”), was formed on August 20, 2015. The Company was formed primarily to fund loans with interest rates ranging from 9% to 15%, that are underwritten by CFI. The loans will be secured by real property. As opportunities arise, the Company will also purchase real property to develop, repair, remodel, rent and/or sell. Operations will be conducted throughout the United States, but primarily in Pennsylvania, Maryland and New Jersey. The Company has not commenced principal operations nor generated revenue as of November 30, 2015. The Company’s activities since inception have consisted primarily of formation activities and preparations to raise debt capital through the issuance of promissory notes (“Notes”) that will vary in duration from 6 to 36 months and will be repaid at interest rates ranging from 5% to 10% with a balloon payment at maturity. Notes issued through the Company will not be charged a commission, but Notes issued through independent brokers/dealers will be charged a commission of up to 8%. The Company is dependent upon capital resources for the commencement of its planned principal operations and is subject to significant risks and uncertainties, including failing to secure funding to operationalize the Company’s planned operations.

General Company Provisions

The Company is managed by CFI, the Company’s sole and managing member. The rights, duties and powers of the managing member are governed by the Company operating agreement.

The managing member, acting alone, has the power and authority to act for and bind the Company.

Term and Offering of the Company

The Company will continue in perpetuity unless the managing member chooses to dissolve it.

CF Fund II, LLC

Notes to Financial Statement

November 30, 2015

Management’s Plan to Achieve Profitability

As of November 30, 2015, the Company did not generate any revenue nor incur any operating expenses. Management is in the process of seeking debt funding and commencing operations.

Basis of Presentation and Use of Estimates

The Company’s financial statements are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. These require the use of estimates and assumptions that affect the assets reported in the financial statements, as well as amounts included in the notes thereto, including discussion and disclosure of contingent liabilities. Although the Company uses its best estimates and judgments, actual results could differ from these estimates as future confirming events occur.

Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The Company determines the fair values of its assets and liabilities based on a fair value hierarchy that includes 3 levels of inputs that may be used to measure fair value. The 3 levels are as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 inputs are those other than quoted prices that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs reflect the Company’s own assumptions about the inferences that market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances and may include the Company’s own data.

Fair value measurements are further discussed in Note 4.

CF Fund II, LLC

Notes to Financial Statement

November 30, 2015

Management Fees

The Company will charge borrowers a loan origination fee up to 10% of the original loan amount depending on market conditions; loan extension and modification fees will be charged at rates of 1% to 3%; and loan processing fees will be charged at prevailing rates. The Company will also charge late payment fees; default interest; prepayment penalties; and other fees.

Income Taxes

The Company, with the consent of its member, has elected to be a partnership under the Internal Revenue Code and a similar section of the state code. The members of a partnership are taxed on their proportionate shares of the Company’s taxable income. As a partnership, the Company is also not subject to Pennsylvania corporate income tax. Therefore, no provision or liability for federal or Pennsylvania income taxes has been included in these financial statements.

The Company’s income tax returns are subject to review and examination by federal, state and local governmental authorities. As of November 30, 2015, no income tax returns have been filed with federal, state and local governmental authorities.

The Company is currently in the process of securing investor financing and commencing operations. However, there can be no assurance that the Company will successfully be able to generate debt financing or find appropriate existing loan investments. Failure to secure debt financing or secure existing loan investments could adversely affect the Company’s ability to achieve it business objective and continue as a going concern.

The Company maintains funds in a financial institution that is a member of the Federal Deposit Insurance Corporation. As such, funds are insured based on the Federal Reserve limit. The Company has not experienced any losses to date, and management believes it is not exposed to any significant credit risk on the current account balance. At times, cash balances may exceed insured amounts.

CF Fund II, LLC

Notes to Financial Statement

November 30, 2015

Due to its short term nature, the carrying value of cash approximates its fair value at November 30, 2015.

In the normal course of business, the Company may become a party to litigation matters involving claims against it. At November 30, 2015, there are no current matters that would have a material effect on the Company’s financial position or results of operations.

The Company has evaluated subsequent events through December 23, 2015, the date the financial statement was available to be issued, and there were no events to report.

CF Fund II, LLC

Notes to Financial Statement

November 30, 2015

Organization

CF Fund II, LLC (the “Company”), a Pennsylvania limited liability company and wholly-owned subsidiary of Conquest Funding, Inc. (“CFI”), was formed on August 20, 2015. The Company was formed primarily to fund loans with interest rates ranging from 9% to 15%, that are underwritten by CFI. The loans will be secured by real property. As opportunities arise, the Company will also purchase real property to develop, repair, remodel, rent and/or sell. Operations will be conducted throughout the United States, but primarily in Pennsylvania, Maryland and New Jersey. The Company has not commenced principal operations nor generated revenue as of November 30, 2015. The Company’s activities since inception have consisted primarily of formation activities and preparations to raise debt capital through the issuance of promissory notes (“Notes”) that will vary in duration from 6 to 36 months and will be repaid at interest rates ranging from 5% to 10% with a balloon payment at maturity. Notes issued through the Company will not be charged a commission, but Notes issued through independent brokers/dealers will be charged a commission of up to 8%. The Company will not be responsible for the repayment of the Notes, rather their repayment is singularly dependent on borrower payments. The Company is dependent upon capital resources for the commencement of its planned principal operations and is subject to significant risks and uncertainties, including failing to secure funding to operationalize the Company’s planned operations.

General Company Provisions

The Company is managed by CFI, the Company’s sole and managing member. The rights, duties and powers of the managing member are governed by the Company operating agreement.

The managing member, acting alone, has the power and authority to act for and bind the Company.

Term and Offering of the Company

The Company will continue in perpetuity unless the managing member chooses to dissolve it.

CF Fund II, LLC

Notes to Financial Statement

November 30, 2015

Management’s Plan to Achieve Profitability

As of November 30, 2015, the Company did not generate any revenue nor incur any operating expenses. Management is in the process of seeking debt funding and commencing operations.

Basis of Presentation and Use of Estimates

The Company’s financial statements are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. These require the use of estimates and assumptions that affect the assets reported in the financial statements, as well as amounts included in the notes thereto, including discussion and disclosure of contingent liabilities. Although the Company uses its best estimates and judgments, actual results could differ from these estimates as future confirming events occur.

Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The Company determines the fair values of its assets and liabilities based on a fair value hierarchy that includes 3 levels of inputs that may be used to measure fair value. The 3 levels are as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 inputs are those other than quoted prices that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs reflect the Company’s own assumptions about the inferences that market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances and may include the Company’s own data.

Fair value measurements are further discussed in Note 4.

CF Fund II, LLC

Notes to Financial Statement

November 30, 2015

Management Fees

The Company will charge borrowers a loan origination fee up to 10% of the original loan amount depending on market conditions; a loan servicing fee of 4% will be charged to service loans; loan extension and modification fees will be charged at rates of 1% to 3%; and loan processing fees will be charged at prevailing rates. The Company will also charge late payment fees; default interest; prepayment penalties; and other fees. CFI will administer all of the aforementioned services and receive 100% of the related payments.

Income Taxes

The Company, with the consent of its member, has elected to be a partnership under the Internal Revenue Code and a similar section of the state code. The members of a partnership are taxed on their proportionate shares of the Company’s taxable income. As a partnership, the Company is also not subject to Pennsylvania corporate income tax. Therefore, no provision or liability for federal or Pennsylvania income taxes has been included in these financial statements.

The Company’s income tax returns are subject to review and examination by federal, state and local governmental authorities. As of November 30, 2015, no income tax returns have been filed with federal, state and local governmental authorities.

The Company is currently in the process of securing investor financing and commencing operations. However, there can be no assurance that the Company will successfully be able to generate debt financing or find appropriate existing loan investments. Failure to secure debt financing or secure existing loan investments could adversely affect the Company’s ability to achieve it business objective and continue as a going concern.

The Company maintains funds in a financial institution that is a member of the Federal Deposit Insurance Corporation. As such, funds are insured based on the Federal Reserve limit. The Company has not experienced any losses to date, and management believes it is not exposed to any significant credit risk on the current account balance. At times, cash balances may exceed insured amounts.

CF Fund II, LLC

Notes to Financial Statement

November 30, 2015

Due to its short term nature, the carrying value of cash approximates its fair value at November 30, 2015.

In the normal course of business, the Company may become a party to litigation matters involving claims against it. At November 30, 2015, there are no current matters that would have a material effect on the Company’s financial position or results of operations.

The Company has evaluated subsequent events through December 18, 2015, the date the financial statement was available to be issued, and there were no events to report.

December 18, 2015

Ms. Jeffrey A. Cella

CF Fund II, LLC

3440 Lehigh Street, Box 163

Allentown, Pennsylvania 18103

Dear Jeff:

Enclosed please find a PDF copy of the Auditors’ Report and Audited Financial Statement of CF Fund II, LLC as of November 30, 2015.

Thank you for allowing Spiegel Accountancy Corp. to be of service. Please call if you have any questions or if we can be of service in any other manner.

Sincerely,

Henry Chavez, CPA

Senior Audit Manager

Conquest Funding, Inc.

Balance Sheet

As of September 30, 2015

Conquest Funding, Inc.

Balance Sheet

As of September 30, 2015

Conquest Funding, Inc.

Balance Sheet

As of September 30, 2015

Conquest Funding, Inc.

Balance Sheet

As of September 30, 2015

-4-

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

of

CF FUND II, LLC
A Pennsylvania limited liability company

This Limited Liability Company Operating Agreement (the “Agreement”) of CF FUND II, LLC, a Pennsylvania limited liability company (the “LLC”), is among each of the initial Members of the LLC listed on the attached Exhibit A (the “Initial Members”), and each of the additional Persons who become Members in accordance with the provisions of this Agreement.

RECITALS

The LLC is a limited liability company formed under the Pennsylvania Limited Liability Company Law of 1994, 15 PA. C.S. §8901 et. seq. The parties to this Agreement are the Initial Members and those additional Persons who are subsequently admitted as Members in accordance with the provisions of this Agreement. The parties intend by this Agreement to define their rights and obligations with respect to the LLC’s governance and financial affairs and to adopt regulations and procedures for the conduct of the LLC’s activities. Accordingly, for good and valuable consideration, the receipt and sufficiency of which is mutually acknowledged, the parties agree as follows:

ARTICLE 1: DEFINITIONS

1.1         Scope. For purposes of this Agreement, unless the language or context clearly indicates that a different meaning is expressed or intended, all capitalized terms used herein have the meanings specified in this Article 1.

1.2         Defined Terms.

(a)          “Act” means the Pennsylvania Limited Liability Company Law of 1994, 15 PA. C.S. §8901 et. Seq.

(b)          “Affiliate,” with respect to a Person, means (1) a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the Affiliate, (2) a Person who owns or controls at least ten percent (10%) of the outstanding voting interests of the Affiliate, (3) a Person who is an officer, director, manager or general partner of the Affiliate, or (4) a Person who is an officer, director, manager, general partner, trustee or owner of at least ten percent (10%) of the outstanding voting interests of an Affiliate described in clauses (1) through (3) of this sentence.

(c)          “Agreement” means this Agreement, including any subsequent amendments thereto.

(d)          “Articles” means the Articles of Organization filed with the Secretary of State to organize the LLC as a limited liability company, including any subsequent amendments thereto.

(e)          “Bankruptcy” means the filing of a petition seeking liquidation, reorganization, arrangement, readjustment, protection, relief or composition in any state or federal bankruptcy, insolvency, reorganization or receivership proceeding.

(f)          “Capital Account” of a Member means the capital account maintained for the Member in accordance with Article 4 hereof.

(g)          “Code” means the Internal Revenue Code of 1986, as amended from time to time.

(h)          “Contribution” means anything of value that a Member contributes to the LLC as a prerequisite for, or in connection with, membership including (without limitation) any combination of cash, property, services rendered, a promissory note or any other obligation to contribute cash or property or render services.

(i)          “Dissociation” means a complete termination of a Member’s membership in the LLC due to an event described in Article 3 hereof.

(j)          “Distribution” means the LLC’s direct or indirect transfer of money or other property to a Member with respect to a Unit.

(k)          “Effective Date” means the date on which the LLC’s existence as a limited liability company begins, as prescribed by the Act.

(l)          “Entity” means an association, relationship or artificial person through or by means of which an enterprise or activity may be lawfully conducted, including, without limitation, a partnership, trust, limited liability company, corporation, joint venture, cooperative or association.

(m)          “Family,” with respect to a Member, means any individual(s) who are related to the Member by blood, marriage or adoption. For the purposes of this definition, an individual is related to the Member by marriage if the person is related by blood or adoption to the Member’s current spouse.

(n)          “Manager” means a Person who is vested with authority to manage the LLC in accordance with Article 5 hereof.

(o)          “Member” means any Initial Member or any Person who is admitted as an additional or a substitute Member after the Effective Date, in accordance with Article 3 hereof.

(p)          “Permitted Transferee,” with respect to a Member, means another Member, a member of the Member’s Family, or a trust for the benefit of the Member or a member of the Member’s Family.

(q)          “Person” means a natural person or an Entity.

(r)          “Profit,” as to a positive amount, and “Loss,” as to a negative amount, mean, for a Taxable Year, the LLC’s income or loss for the Taxable Year, as determined in accordance with accounting principles appropriate to the LLC’s method of accounting and consistently applied.

(s)          “Regulations” means proposed, temporary or final regulations promulgated under the Code by the U.S. Department of the Treasury, as amended from time to time.

(t)          “Taxable Year” means the LLC’s taxable year as determined in Article 6 hereof.

(u)          “Transfer,” as a noun, means a transaction or event by which ownership of any Unit is changed or encumbered, including, without limitation, a sale, exchange, abandonment, gift, pledge or foreclosure. “Transfer,” as a verb, means to affect a Transfer.

(v)         “Transferee” means a Person who acquires any Unit by Transfer from a Member or another Transferee not admitted as a Member in accordance with Article 3 hereof.

(w)          “Unit” means a Member’s percentage interest in the LLC, which consists of the member’s right to share in profits, receive Distributions, participate in the LLC’s governance and approve the LLC’s acts under Article 5.7 hereof, participate in the designation and removal of the Manager and receive information pertaining to the LLC’s affairs. Units do not represent any fixed or absolute percentage interest representing ownership in the LLC, but instead Units represent an interest in the LLC and the amount of any Member’s actual percentage interest representing ownership in the LLC shall generally be determined by the number of Units that such Member owns divided by the total number of Units outstanding (it being understood that such total number of Units outstanding may fluctuate and change from time to time). The Units of the initial Member(s) are set forth herein. Changes in Units after the Effective Date, including, but not limited to, those changes necessitated by the admission and Dissociation of Members, will be reflected in the LLC’s records. The allocation of Units as reflected in the LLC’s records from time to time is presumed to be correct for purposes of this Agreement and the Act.

ARTICLE 2: THE LLC

2.1         Status. The LLC is a limited liability company organized in the State of Pennsylvania under the Act.

2.2         Name. The name of the LLC is CF FUND II, LLC.

2.3         Term. The LLC’s existence as a limited liability company will commence on the Effective Date and continue until dissolved herein pursuant to Article 7 below, unless sooner dissolved or terminated under the Act or as described herein.

2.4         Purpose. The purpose of the LLC is to engage in any lawful act or activity for which a limited liability company may be organized under the Act.

2.5         Principal Place of Business. The LLC’s principal place of business is located at: 3440 Lehigh St. Box 163, Allentown, PA 18103.

2.6         Registered Agent and Registered Office. The LLC’s registered office in the State of Pennsylvania is located at: 3440 Lehigh St. Box 163, Allentown, PA 18103, and its registered agent at that location is Conquest Funding, Inc., a Pennsylvania corporation. The LLC may change its registered agent or registered office at any time.

ARTICLE 3: MEMBERSHIP

3.1         Identification.

(a)          Members. The Initial Members are listed on the attached Exhibit A.

(b)          Additional and Substitute Members. The LLC may admit additional or substitute Members upon an affirmative vote of a majority of the outstanding Units. The Manager will not permit any Person to become a Member until such Person has agreed to be bound by all the provisions of this Agreement as of the date of the proposed admission.

(c)          Rights of Additional or Substitute Members. A Person admitted as an additional or substitute Member has all the rights and powers, and is subject to all the restrictions and obligations of a Member under this Agreement and the Act.

3.2        Restrictions on Transfer.

(a)          Restrictions on Transfer. A Member may Transfer his, her or its Units only in compliance with this Article 3. Restrictions have been placed upon the ability of all Members to resell or otherwise dispose of any Units obtained or acquired hereunder including, without limitation, the following:

(1)         Any Units offered for sale by a Member will be offered first to all Members (on a pro rata basis, based on the number of Units held by such Member) at the then fair market value of the selling Member’s Units. Any remaining Units not purchased by any Members within thirty (30) calendar days of being offered to the Members may then be offered for sale to any third party if such offer(s) and sale(s) comply with the remainder of this Section 3.2(a) in its entirety.

(2)         No Member may resell or otherwise transfer any Units without the satisfaction of certain conditions designed to comply with applicable tax and securities laws, including (without limitation) the requirement that certain legal opinions be provided to the Members and the Manager with respect to such matters at the expense of the Member requesting such transfer. The transferee must meet any investor qualifications as is set forth by the Manager. Furthermore, if the Pennsylvania Commissioner imposes a transfer restriction on the Units, then Units may not be sold or transferred without the prior written consent of such Commissioner except as permitted in the Commissioner’s Rules.

(3)         The Units have not been registered with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon exemptions provided for therein. Units may not be sold or otherwise transferred without registration under the Securities Act or pursuant to an exemption therefrom. In addition, no sales or transfers may be made to in violation or contravention of the Securities Act or any other applicable federal or state securities laws, rules or regulations.

(4)         A legend will be placed upon all instruments evidencing ownership of Units in the LLC stating that the Units have not been registered under the Securities Act, and setting forth the foregoing limitations on resale. Notations regarding these limitations shall be made in the appropriate records of the LLC with respect to all Units offered hereby. The foregoing steps will also be taken in connection with the issuance of any new instruments for any Units that are presented for transfer, to the extent the Manager deems appropriate.

(5)         The LLC will charge a reasonable transfer fee (to reimburse the LLC for administrative costs associated with transfers) per transfer of ownership. If a Member transfers Units to more than one person, except Transferees who will hold title together, the transfer to each person will be considered a separate transfer.

(b)          Null and Void. An attempted Transfer of all or a portion of any Units that is not in compliance with this Article 3 in its entirety will be null and void. A Transferee may not become a substitute Member without the express written consent of Members holding more than fifty percent (50.0%) of the total Units outstanding. Such consent may be withheld for any reason (or no reason). In the event that such consent is granted, the Transfer and the transferee must comply with all the provisions of this Agreement and all applicable law. No Units may be transferred if, in the sole and absolute discretion of the Manager, such a Transfer would jeopardize the availability of exemptions from registration under federal securities laws, the tax status of the LLC or cause termination of the LLC for federal income tax purposes.

(c)          Permitted Transfers. A Member may at any time Transfer one or more Units to a Permitted Transferee if, as of the date the Transfer takes effect, the LLC is reasonably satisfied that all of the following conditions are met:

(1)         the Transferee is a person with the same investor and Member qualifications as the original Member;

(2)         the Transfer, alone or in combination with other Transfers, will not result in the LLC’s termination for federal income tax purposes or a change in the tax status of the LLC;

(3)         the Transfer is the subject of an effective registration under, or exempt from the registration requirements of, applicable state and federal securities laws and regulations;

(4)         the LLC receives from the Transferee the information and agreements reasonably required to permit it to file federal and state income tax returns and reports; and

(5)         the LLC receives payment from the Transferee of a reasonable transfer fee for each Transferee. Where Transferees hold title together, as joint tenants, tenants in common, partners or otherwise, a Transfer to them shall only incur one transfer fee.

(d)          Transferor’s Membership Status. If a Member Transfers less than all of his, her, or its Units, the Member’s rights with respect to the transferred portion of the Unit, including the right to vote or otherwise participate in the LLC’s governance and the right to receive Distributions, will terminate as of the effective date of the Transfer. However, the Member will remain liable for any obligation with respect to the transferred portion that existed prior to the effective date of the Transfer, including (without limitation) any costs or damages resulting from the Member’s breach of this Agreement. If the Member Transfers all of his, her or its Units, the Transfer will constitute an event of Dissociation.

(e)          Transferee’s Status.

(1)         Admission as a Member. A Member who Transfers one or more Units has no power to confer on the Transferee the status of a Member. A Transferee may be admitted as a Member only in accordance with the provisions of this Article 3. A Transferee who wishes to become a Member must make an application in writing to the LLC and provide evidence, as requested by the LLC, of compliance with all conditions to admission, as set forth above. Prior to admission, each proposed member must execute and deliver a counterpart of this Agreement, as amended to date, or a separate written agreement to be bound hereby.

(2)         Rights of Non-Member Transferee. A Transferee who is not admitted as a Member in accordance with the provisions of this Article 3 (i) has no right to vote or otherwise participate in the LLC’s governance, (ii) is not entitled to receive information concerning the LLC’s affairs or inspect the LLC’s books and records, (iii) with respect to the transferred Units, is entitled to receive the Distributions to which the Member would have been entitled had the Transfer not occurred, and (iv) is subject to the restrictions imposed by this Article 3 to the same extent as a Member. Any provision of the Agreement permitting or requiring the Members to take action by vote or written approval of a specified percentage of the Units shall be deemed to mean only Units then owned by Members.

3.3        Expulsion of a Member. At any time there are more than two (2) Members, the LLC may expel a Member for cause. Cause for expulsion exists if the Member has materially breached or is unable to perform the Member’s material obligations under this Agreement. A Member’s expulsion from the LLC will be effective upon the Member’s receipt of written notice of the expulsion.

3.4        No Withdrawals. Except as expressly provided herein, no Member or Transferee may withdraw his, her or its Contribution to the LLC at any time nor may any Member compel the LLC to effectuate any redemption of his, her or its Units.

3.5        Dissociation. “Dissociation” from the LLC occurs upon a Member’s expulsion, transfer or redemption of all of the Member’s Units, withdrawal or resignation (an “Event of Dissociation”). Upon the occurrence of an Event of Dissociation: (a) the Member’s right to participate in the LLC’s governance, receive information concerning the LLC’s affairs and inspect the LLC’s books and records will terminate and (b) unless the Dissociation resulted from the Transfer of the Member’s Units, the Member will be entitled to receive the Distributions to which the Member would have been entitled as of the effective date of the Dissociation had the Dissociation not occurred. The Member will remain liable for any obligation to the LLC that existed prior to the effective date of the Dissociation, including any costs or damages from the Member’s breach of this Agreement. The Member will have no automatic right to any return of his, her or its capital (or redemption of his, her or its Units) prior to the termination of the LLC unless the LLC affirmatively elects (in its sole and absolute discretion) to return capital to a Member. The effect of such Dissociation on the remaining Members who do not sell or dissociate will be to increase their percentage share of the remaining assets of the LLC, and thus their proportionate share of its future earnings, losses and distributions. The reduction in the outstanding Units will also increase the relative voting power of remaining Members.

3.6        Verification of Units. Within thirty (30) days after receipt of a Member’s written request, the LLC will provide such Member with a statement evidencing his, her or its ownership of Units in the LLC. This verification will serve the sole purpose of verifying the Member’s interest in the LLC and shall not constitute a certificated security, negotiable instrument or other vehicle by which to effectuate a transfer of Units.

3.7        Manner of Action by Members.

      (a) Meetings.

(1)         Right to Call. The Manager, or any combination of Members holding in the aggregate more than twenty-five percent (25%) of the total outstanding Units, may call a meeting of Members by giving written notice to all Members not less than thirty (30), or more than sixty (60) days prior to the date of the meeting. The notice must specify the date, time and place of the meeting and the nature of any business to be transacted. A Member may waive notice of a meeting of Members orally, in writing, or by attendance at the meeting.

(2)         Time and Place. Unless otherwise specified in the notice of meeting, all meetings shall be held at 2:00 p.m. on a regular business day of the LLC, at the LLC’s principal place of business. No meeting may be held on a Sunday or legal holiday; at a time that is before 7:30 a.m. or after 9:00 p.m.; or at a place more than sixty (60) miles from the LLC’s principal place of business.

(3)         Proxy Voting. A Member may act at a meeting of Members through a Person authorized by signed proxy.

(4)         Quorum. Members whose aggregate holdings exceed a majority of the outstanding Units will constitute a quorum at a meeting of Members. No action may be taken in the absence of a quorum.

(5)         Required Vote. Except with respect to matters for which a greater minimum vote is required by the Act or this Agreement, the vote of Members present whose aggregate holdings exceed fifty percent (50%) of the outstanding Units will constitute the act of the Members at a meeting of Members.

(b)          Written Consent. The Members may act without a meeting by written consent describing the action and signed by Members whose aggregate holdings of the Units equal or exceed the minimum that would be necessary to take the action at a meeting at which all Members were present.

3.8        Limitation on Individual Authority. A Member who is not also the Manager has no authority to bind the LLC. A Member whose unauthorized act obligates the LLC to a third party will indemnify the LLC for any costs or damages the LLC incurs as a result of the unauthorized act.

3.9        Negation of Fiduciary Duties. A Member who is not also the Manager owes no fiduciary duties to the LLC or to the other Members solely by reason of being a Member.

3.10      Resignation of a Member. A Member may resign from the LLC at any time by giving written notice to the LLC at least sixty (60) days prior to the effective date of resignation.

ARTICLE 4: FINANCE

4.1         Contributions; Issuance of Units.

(a)          Members. Each Initial Member will contribute capital, assets or other property to the LLC, as separately agreed upon with the Manager, in consideration of the Units set forth next to each Member’s name on Exhibit A attached to this Agreement.

(b)          Additional Members. No additional Members shall be admitted except with the express written consent of the Manager and also the Members holding a majority of the LLC’s outstanding Units.

(c)          Contributions Not Interest Bearing. A Member is not entitled to interest or other compensation with respect to any cash or property the Member contributes to the LLC.

4.2         Allocation of Profit and Loss. After giving effect to special allocations, if any, the LLC’s Profit or Loss for a Taxable Year, including the Taxable Year in which the LLC is dissolved, will be allocated among the Members in proportion to their Units (as a percentage of all outstanding Units) during the applicable tax reporting period.

4.3         Tax Allocations. For federal income tax purposes, unless the Code otherwise requires, each item of the LLC’s income, gain, loss or deduction will be allocated to the Members in proportion to their allocations of the LLC’s Profit or Loss.

4.4         Capital Accounts.

(a)          General Maintenance. The LLC will establish and maintain a Capital Account for each Member. A Member’s Capital Account balance (“Capital Account Balance”) will be:

(1)   increased by: (i) the amount of any money the Member contributes to the LLC’s capital, and (ii) the Member’s share of the LLC’s Profits and any separately stated items of income or gain; and

(2)   decreased by: (i) the amount of any money the LLC distributes to the Member, and (ii) the Member’s share of the LLC’s Losses and any separately stated items of deduction or loss.

(b)          Adjustments for Acquisitions and Redemptions. The LLC shall adjust a Member’s capital account to reflect profit or loss the LLC would have realized had the LLC liquidated its assets at fair market value on the date of the acquisition or redemption.

(c)          Transfer of Capital Account. A Transferee of Units succeeds to the portion of the transferor’s Capital Account that corresponds to the portion of the Unit that is the subject of the Transfer.

(d)          Compliance with Code. The requirements of this Article 4 are intended and will be construed to ensure that the allocations of the LLC’s income, gain, losses, deductions and credits have substantial economic effect under the Regulations promulgated under Section 704(b) of the Code.

4.5.         Distributions. Distributions will be made in the sole discretion of the Manager (to the extent that the Manager elects to make a distribution) to Members on a pro-rata basis (based on the proportionate number of Units held by each Member) within ninety (90) calendar days from the date that the Manager declares any distribution.

ARTICLE 5: MANAGEMENT

5.1         Representative Management. The LLC will be managed by one Manager. By execution of this Agreement, and without prejudice to the right of the Members to remove the Manager as set forth in this Article 5, the Initial Members and each Person hereafter admitted as a Member, other than Transferees, shall be deemed to have elected such Manager. The initial Manager shall be Conquest Funding, Inc., a Pennsylvania corporation, an individual, whose address is 3440 Lehigh St. Box 163, Allentown, PA 18103.

5.2         Time Devoted to Business. The Manager will devote to the LLC’s activities the amount of time reasonably necessary to discharge the Manager’s responsibilities.

5.3         Powers and Authority.

(a)          General Scope. Except for matters on which the Members’ approval is required by the Act or this Agreement, the Manager has full power, authority and discretion to manage and direct the LLC’s business, affairs and properties, including the specific powers referred to in paragraph (b), below, but subject to the limitations of Section 5.7 below.

(b)          Specific Powers.

(1)         The Manager is authorized on the LLC’s behalf to make all decisions as to (i) the development, sale, lease or other disposition of the LLC’s assets; (ii) the purchase or other acquisition of other assets of all kinds; (iii) the management of all or any part of the LLC’s assets and business; (iv) the borrowing of money and the granting of security interests in the LLC’s assets (including, but not limited to, loans from Members); (v) the prepayment, refinancing or extension of any mortgage affecting the LLC’s assets; (vi) the compromise or release of any of the LLC’s claims or debts; (vii) the employment of Persons for the operation and management of the LLC’s business; (viii) all elections available to the LLC under any federal or state tax law or regulation; and/or (ix) the development, commercialization, sales, marketing and exploitation of the assets, technology and property of the LLC.

(2)         The Manager on the LLC’s behalf may execute and deliver (i) any and all contracts, conveyances, assignments, leases, subleases, franchise agreements, licensing agreements, management contracts and maintenance contracts covering or affecting the LLC’s assets; (ii) any and all checks, drafts and other orders for the payment of the LLC’s funds; (iii) any and all promissory notes, mortgages, deeds of trust, security agreements and other similar documents; (iv) any and all articles, certificates and reports pertaining to the LLC’s organization, qualification and dissolution; (v) any and all tax returns and reports; and/or (vi) any all other instruments of any kind or character relating to the LLC’s affairs.

5.4         Duties of Manager.

(a)          Fiduciary Duty. The Manager shall have the fiduciary responsibility for the safekeeping and use of all funds and assets of the LLC, whether or not in the Manager’s possession or control. Except as expressly permitted herein, or by subsequent approval of the Members, the Manager shall not employ, or permit another to employ LLC funds or assets in any manner except for the exclusive benefit of the LLC.

(b)          Standard of Care.

(1)         Exculpation. The Manager will not be liable to the LLC or any Member for an act or omission done in good faith to promote the LLC’s business interests, unless the act or omission constitutes gross negligence or willful misconduct.

(2)         Justifiable Reliance. The Manager may rely on the LLC’s records maintained in good faith and on information, opinions, reports or statements received from any Person pertaining to matters the Manager reasonably believes to be within the Person’s expertise or competence.

(c)          Reimbursement of Business Expenses. The LLC shall pay its own general administrative and operating expenses. It shall reimburse the Manager for any expenses incurred by the Manager that are properly considered ordinary and reasonable business expenses of the LLC, including without limiting the generality of the foregoing, accounting and legal fees related to the LLC’s business, employment costs and other ordinary and reasonable business expenses.

5.5         Indemnification of Manager. Except as limited by applicable law, the LLC shall indemnify the Manager for any and all expenses, losses, liabilities and damages the Manager actually and reasonably incurs in connection with the defense or settlement of any action arising out of or relating to the conduct of the LLC’s activities, except an action with respect to which the Manager is finally adjudged to be liable for breach of a fiduciary duty owed to the LLC or the Members under the Act or this Agreement. The LLC shall advance the costs and expenses of defending actions against the Manager arising out of or relating to the management of the LLC, provided that the LLC first receives the written undertaking of the Manager to reimburse the LLC if ultimately the Manager is finally judicially determined not to be entitled to indemnification hereunder.

5.6         Tenure.

(a)          Term. The Manager will serve until the earlier of (1) the Manager’s resignation; (2) the Manager’s removal; (3) as to a Manager who is a natural person, the Manager’s death or adjudication of incompetency; and (4) as to a Manager that is an Entity, the Manager’s dissolution. In any such event, Members representing a majority of the Units outstanding shall promptly elect a successor as Manager; provided, however if the then Manager desires to appoint an Affiliate as the new Manager, then such Affiliate may become the Manager without Member approval.

(b)          Resignation. The Manager at any time may resign for any reason (or no reason) by written notice delivered to the Members at least thirty (30) days prior to the effective date of the resignation.

(c)          Removal. The Members may remove the Manager, upon the written approval of a majority of the outstanding Units, but only if (i) the Manager commits an act of gross negligence or willful misconduct which materially adversely damages the LLC, or (ii) the Manager enters Bankruptcy, and such proceeding is not dismissed within ninety (90) days of its initial filing. Prior to such removal being effective, the Members must provide the Manager with thirty (30) days’ written notice of their intention to remove the Manager pursuant to the foregoing. The notice to the Manager shall contain a detailed description of the acts and omissions of the Manager that constitute the basis for the proposed removal of the Manager.

5.7         Limitations on Authority.

5.7.1         Members’ Approval. Notwithstanding anything to the contrary in this Agreement or the Act, without the approval of the Members who collectively own the majority of the outstanding Units, the Manager may not do or bind the LLC to do any of the following:

(a)          Sell or otherwise dispose of all or substantially all of the LLC’s business and/or assets, whether as part of a single transaction or plan or in multiple transactions, except in the orderly liquidation and winding up of the LLC’s business upon its duly authorized dissolution;

(b)          Merge or combine the LLC with another entity; or

(c)          Confess any judgment against the LLC.

5.7.2         Members’ Unanimous Approval. Notwithstanding anything to the contrary in this Agreement or the Act, without the Members’ unanimous approval, the Manager may not do or bind the LLC to do any of the following:

(a)          Undertake any act that would cause a Member to incur personal liability for the LLC’s obligations; or

(b)          Undertake any other act that by this Agreement requires the Members’ unanimous approval.

5.8           Compensation. The Manager and its Affiliates shall not be entitled to compensation for services rendered to the LLC, except that Mission Oaks Investment Company (an Affiliate of the Manager) shall receive a servicing fee of $400.00 per month payable from the LLC for its servicing/management work. The Manager shall also be permitted to obtain reimbursement from the LLC for all customary and reasonable expenses incurred in connection with the duties and obligations of the Manager hereunder.

ARTICLE 6: RECORDS AND ACCOUNTING

6.1         Maintenance of Records.

(a)          Required Records. The LLC will maintain such books, records and other materials as are reasonably necessary to document and account for its activities, including (without limitation) those required to be maintained by the Act.

(b)           Member Access. A Member and the Member’s authorized representative will have reasonable access to, and may inspect and copy, all books, records and other materials pertaining to the LLC or its activities. The exercise of such rights will be at the requesting Member’s expense. Notwithstanding the foregoing, the inspection must occur at the LLC’s principal place of business and may only be conducted following ten (10) business days’ prior written notice to the LLC.

(c)          Confidentiality. No Member or Manager will disclose any information relating to the LLC or its activities to any unauthorized person or use any such information for his or her or any other Person’s personal gain.

6.2         Financial Accounting.

(a)          Accounting Method. The LLC will account for its financial transactions using the accrual method of accounting. The Manager may change this method of accounting following reasonable prior written notice thereof to the Members.

(b)          Taxable Year. The LLC’s Taxable Year is the LLC’s annual accounting period, as determined by the Manager in compliance with Sections 441, 444 and 706 of the Code.

6.3         Reports.

(a)          Members. As soon as reasonably practicable after the close of each Taxable Year, the LLC will prepare and send to the Members such reports and information as are reasonably necessary to (1) inform the Members of the results of the LLC’s operations for the Taxable Year, and (2) enable the Members to completely and accurately reflect their distributive Units of the LLC’s income, gains, deductions, losses and credits in their federal, state and local income tax returns for the appropriate year.

(b)          Periodic Reports. The LLC will complete and file any periodic reports required by the Act or the applicable law of any other jurisdiction in which the LLC is qualified to do business.

6.4         Tax Compliance.

(a)          Withholding. If the LLC is required by law or regulation to withhold and pay over to a governmental agency any part or all of a Distribution or allocation of Profit to a Member:

(1)         the amount withheld will be considered a Distribution to the Member; and

(2)         if the withholding requirement pertains to a Distribution in kind or an allocation of Profit, the LLC will pay the amount required to be withheld to the governmental agency and promptly take such action as it considers necessary or appropriate to recover a like amount from the Member, including offset against any Distributions to which the Member would otherwise be entitled.

(b)          Tax Matters Partner. The Manager, or a Person designated by the Manager, shall act as the “Tax Matters Partner” pursuant to Section 6231(a)(7) of the Code. The Tax Matters Partner will inform the Members of all administrative and judicial proceedings pertaining to the determination of the LLC’s tax items and will provide the Members with copies of all notices received from the U.S. Internal Revenue Service regarding the commencement of an LLC-level audit or a proposed adjustment of any of the LLC’s tax items. The Tax Matters Partner may extend the statute of limitations for assessment of tax deficiencies against the Members attributable to any adjustment of any tax item. The LLC will reimburse the Tax Matters Partner for reasonable expenses properly incurred while acting within the scope of the Tax Matters Partner’s authority.

ARTICLE 7: DISSOLUTION

7.1         Events of Dissolution. The LLC will dissolve upon the first of the following to occur: (a) the sale or other disposition of all or substantially all the assets of the LLC; (b) any event that makes the LLC ineligible to conduct its activities as a limited liability company under the Act; or (c) otherwise by operation of applicable law.

7.2         Effect of Dissolution.

(a)          Appointment of Liquidator. Upon the LLC’s dissolution, the Manager (unless unwilling or unable to serve as such) shall serve as liquidator, and as such will wind up and liquidate the LLC in an orderly, prudent and expeditious manner in accordance with the following provisions of this Article. While serving as liquidator, the Manager shall have the same authority, powers, duties and compensation as before dissolution, except that the liquidator shall not acquire any additional assets for the LLC, and shall use its best efforts to liquidate the LLC’s existing assets as rapidly as is consistent with receiving the fair market value thereof. If the Manager is unwilling or unable to serve as liquidator, or has resigned or been removed, the Members shall elect another person, who may be a Member, to serve as liquidator.

(b)          Distributions Upon Dissolution. All funds received by the LLC shall be applied to satisfy or provide for LLC debts and liabilities and the balance, if any, shall be distributed to Members on a pro-rata basis as is consistent with the provisions of this Agreement..

(c)          Time for Liquidation. The LLC will not immediately cease to exist upon the occurrence of an event causing its dissolution, but will continue until its affairs have been wound up. It is acknowledged and agreed that the assets of the LLC are illiquid, and will take time to sell. The liquidator shall liquidate the LLC’s assets as promptly as is consistent with obtaining the fair market value thereof, either by sale to third parties by auction to the highest bidder in a reasonably promoted auction (or other commercially reasonable suitable means, if necessary).

(d)           Final Accounting. The liquidator will make proper accountings, (1) to the end of the month in which the event of dissolution occurred, and (2) to the date on which the LLC is finally and completely liquidated.

(e)          Duties and Authority of Liquidator. The liquidator will make adequate provision for the discharge of all of the LLC’s debts, obligations and liabilities. The liquidator may sell, encumber or retain for distribution in kind any of the LLC’s assets. Any gain or loss recognized on the sale of assets will be allocated to the Members’ Capital Accounts in accordance with the provisions of Article 4 above. With respect to any asset the liquidator determines to retain for distribution in kind, the liquidator will allocate to the Members’ Capital Accounts the amount of gain or loss that would have been recognized had the asset been sold at its fair market value.

(f)          Final Distribution. The liquidator will distribute any assets remaining after the discharge or accommodation of the LLC’s debts, obligations and liabilities to the Members in proportion to their Capital Accounts. The liquidator will distribute any assets distributable in kind to the Members in undivided interests as tenants in common. A Member whose Capital Account is negative will have no liability to the LLC, the LLC’s creditors or any other Member with respect to the negative balance.

(g)          Required Filings. The liquidator will file with the appropriate Secretary of State such statements, certificates and other instruments, and take such other actions, as are reasonably necessary or appropriate to effectuate and confirm the cessation of the LLC’s existence.

ARTICLE 8: GENERAL PROVISIONS

8.1         Amendments. Except as otherwise provided herein, the Manager or any Member may propose, for consideration and action, an amendment to this Agreement or to the Articles. Except as otherwise stated herein, a proposed amendment will become effective at such time as it is approved by the Members holding a majority of the outstanding Units. Notwithstanding the foregoing, the Manager on behalf of the LLC will execute and file any amendment to the Articles required by the Act. If any such amendment results in inconsistencies between the Articles and this Agreement, this Agreement will be considered to have been amended in the specific areas necessary to eliminate such inconsistencies.

8.2         Power of Attorney. Each Member appoints the Manager, with full power of substitution, as the Member’s attorney-in-fact, to act in the Member’s name to execute and file (a) all certificates, applications, reports and other instruments necessary to qualify or maintain the LLC as a limited liability company in the states and foreign countries where the LLC conducts its activities, (b) all instruments that effect or confirm changes or modifications of the LLC or its status, including, without limitation, amendments to the Articles, and (c) all instruments of transfer necessary to effect the LLC’s dissolution and termination. The power of attorney granted by this Article is irrevocable, coupled with an interest and shall survive the death of the Member.

8.3         Binding Arbitration. ANY DISPUTE, CLAIM OR CONTROVERSY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE BREACH, TERMINATION, ENFORCEMENT, INTERPRETATION OR VALIDITY THEREOF, INCLUDING (WITHOUT LIMITATION) THE DETERMINATION OF THE SCOPE OR APPLICABILITY OF THIS AGREEMENT TO ARBITRATE, OR ANY OTHER DISPUTE, CLAIM OR CONTROVERSY ARISING OUT OF ANY INTERACTION BETWEEN THE LLC AND A MEMBER, SHALL BE BROUGHT WITHIN ONE YEAR OF ITS ACCRUAL AND BE DETERMINED BY ARBITRATION IN THE COUNTY OF ORANGE, STATE OF PENNSYLVANIA, BEFORE ONE ARBITRATOR. THE ARBITRATION SHALL BE ADMINISTERED BY JAMS PURSUANT TO ITS COMPREHENSIVE ARBITRATION RULES AND PROCEDURES (IF THE AMOUNT IN CONTROVERSY EXCEEDS $250,000) OR ITS STREAMLINED ARBITRATION RULES AND PROCEDURES (IF THE AMOUNT IN CONTROVERSY IS LESS THAN OR EQUAL TO $250,000). IF THE ARBITRATION IS A CLASS ARBITRATION, THE AGGREGATE AMOUNT, OF THE PURPORTED CLAIMS OF ALL PUTATIVE CLASS MEMBERS, SHALL BE USED TO DETERMINE WHICH RULES APPLY. JUDGMENT ON THE AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF. THIS CLAUSE SHALL NOT PRECLUDE PARTIES FROM SEEKING PROVISIONAL REMEDIES IN AID OF ARBITRATION FROM A COURT OF APPROPRIATE JURISDICTION. THE PREVAILING PARTY IN ANY DISPUTE, CLAIM OR CONTROVERSY HEREUNDER SHALL BE ENTITLED TO RECOVER ITS COSTS OF ARBITRATION AND REASONABLE ATTORNEYS’ FEES THEREOF.

8.4         Notices. Notices contemplated by this Agreement may be sent by any commercially reasonable means, including hand delivery, certified first class mail, facsimile, email or private courier. The notice must be prepaid and addressed as set forth in the LLC’s records. The notice will be effective on the date of confirmed receipt or, in the case of notice sent by certified first class mail, the fifth (5^th) calendar day after mailing.

8.5         Resolution of Inconsistencies. If there are inconsistencies between this Agreement and the Articles, the Articles will control. If there are inconsistencies between this Agreement and the Act, this Agreement will control, except to the extent that the inconsistencies relate to provisions of the Act that the Members cannot alter by agreement. Without limiting the generality of the foregoing, unless the language or context clearly indicates a different intent, the provisions of this Agreement pertaining to the LLC’s governance and financial affairs and the rights of the Members upon Dissociation and dissolution will supersede the provisions of the Act relating to the same matters.

8.6         Provisions Applicable to Transferees. As the context requires, but subject to the restrictions and limitations imposed by the provisions of this Agreement, anything herein pertaining to the rights and obligations of a Member also govern the rights and obligations of the Member’s Transferee.

8.7         Additional Instruments. Each Member will execute and deliver any document or statement necessary to give effect to the terms of this Agreement or to comply with any applicable law, rule or regulation governing the LLC’s formation and activities.

8.8         Computation of Time. In computing any period of time under this Agreement, the day of the act or event from which the specified period begins to run is not included. The last day of the period is included, unless it is a Saturday, Sunday or legal holiday, in which case the period will run until the end of the next day that is not a Saturday, Sunday or legal holiday. For purposes of this paragraph, a day shall be deemed to end at 5:00 p.m. in the time zone where LLC then maintains its principal place of business.

8.9         Entire Agreement. This Agreement and the Articles comprise the entire agreement among the parties with respect to the subject matter hereof.

8.10       Waiver. No right or remedy under this Agreement may be waived, except by an instrument in writing signed by the party sought to be charged with the waiver.

8.11       General Construction Principles. Words in any gender are deemed to include the other genders. The singular is deemed to include the plural and vice versa (as needed in order to give the Agreement its proper intended effect). The headings and underlined paragraph titles are for guidance only and have no significance in the interpretation of this Agreement. This Agreement shall be deemed to have been written and duly reviewed by each and all of the parties hereof. Each of the parties hereof has (i) been adequately represented by legal counsel or (ii) had adequate opportunity to consult with legal counsel and has affirmatively chosen to waive the right to do so.

8.12       Binding Effect. Subject to the provisions of this Agreement relating to the transferability of Units and the rights of Transferees, this Agreement is binding on and will inure to the benefit of each party and his, her or its respective and permitted heirs, executors, successors, legal representatives and assigns.

8.13       Governing Law. This Agreement shall be governed by the laws of the State of Pennsylvania, excluding its conflicts of law provisions.

8.14       Further Assurances. The parties hereto agree that they will cooperate with each other and will execute and deliver, or cause to be executed and delivered, all such other instruments, and will take all such other actions, as any party hereto may reasonably request from time to time in order to effectuate the provisions and purposes hereof.

8.15       Severability. If any provision of this Agreement shall be deemed invalid, unenforceable or illegal, then notwithstanding such invalidity, unenforceability or illegality, the remainder of this Agreement shall continue in full force and effect.

8.16       Counterparts; Facsimile. This Agreement may be executed in counterparts, each of which will be considered an original as to the party signing it. Original signatures transmitted via facsimile or electronic transmission shall have the same legal effect as the exchange of original signatures.

ARTICLE 9: REPRESENTATIONS AND WARRANTIES

Each Member, severally and not jointly, hereby represents and warrants to the Manager as follows with respect to such Member only:

(1) such Member is purchasing its respective Units for investment purposes only, and not with a view to re-selling such Units (and such Member acknowledges that its Units have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities law);

(2) such Member is an “accredited investor” as that term is defined in Regulation D, promulgated under the Securities Act;

(3) such Member has had an opportunity to review this Agreement and the investment in the LLC, including the tax consequences of participating in the LLC, with independent counsel and to request and obtain materials from, and ask questions of, representatives of the Manager regarding the LLC and its assets and operations;

(4) such Member believes that the acquisition of its Units is suitable for such Member based upon Member’s investment objectives and financial needs;

(5) such Member has adequate means for providing for Member’s current and long-term financial needs, has no need for liquidity of investment with respect to its Units, is in a financial position to hold its Units for an indefinite period of time, and is able to bear the economic risk of, and can withstand, a complete loss of its investment in the LLC;

(6) such Member has such knowledge and experience in financial and business matters that Member is capable of (a) requesting, reviewing and understanding the information Member has acquired regarding the LLC and its operations, management and control and (b) evaluating the merits and risks of an investment in the LLC and the merits and risks of the acquisition of its Units;

(7) such Member has a had prior substantive business dealings with the owners and management personnel of Manager and its Affiliates;

(8) such Member has obtained, to the extent Member deems necessary, Member’s own personal professional advice with respect to the risks inherent in the acquisition of the Units and the suitability of such acquisition in view of Member’s financial condition and investment needs; and

(9) such Member understands that: (a) an investment in its Units is speculative; (b) no federal or state agency has made any finding or determination as to the fairness of the investment or any recommendation or endorsement of the Units; (c) no assurance can be given that the investment objectives of the LLC will be achieved; (d) any forecast financial information furnished to Member are based on certain assumptions regarding future events, many of which may not occur and, therefore, actual results of operations will vary from projected results and such variations may be material; and (e) there are restrictions upon the transferability of the Units contained herein and no public market for the Units is expected to develop, and, accordingly, Member may not be able to dispose of its Units when desired (even upon an emergency).

[Signature Page to Operating Agreement Follows]

[Signature Page to Operating Agreement]

THE UNDERSIGNED MEMBER AGREES TO THE TERMS AND PROVISIONS OF THIS OPERATING AGREEMENT.

MEMBER

EXHIBIT “A”

INITIAL MEMBERS, CONTRIBUTIONS AND

OWNERSHIP OF UNITS AS OF THE EFFECTIVE DATE

CF FUND II, LLC

a Pennsylvania limited liability company

SUBSCRIPTION AGREEMENT AND

POWER OF ATTORNEY

THE PROMISSORY NOTES OF THE COMPANY SUBJECT TO THIS SUBSCRIPTION AGREEMENT ARE SECURITIES WHICH HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). OPERATING AGREEMENTTHE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SELLING LITERATURE. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THIS INVESTMENT INVOLVES A DEGREE OF RISK THAT MAY NOT BE SUITABLE FOR ALL PERSONS. ONLY THOSE INVESTORS WHO CAN BEAR THE LOSS OF A SIGNIFICANT PORTION OF THEIR INVESTMENT SHOULD PARTICIPATE IN THE INVESTMENT.

1.  SUBSCRIPTION.

AMOUNT OF INVESTMENT:                $____________________________________

(a)   The undersigned (“Purchaser”) hereby subscribes to become a holder (“Noteholder”) of promissory notes in CF FUND II, LLC, a Pennsylvania limited liability company (the “Company”), and to purchase through his, her or its investment the amount of promissory notes (“Promissory Notes”) as indicated above, all in accordance with the terms and conditions of this Subscription Agreement, the Promissory Notes, the Articles of Organization (the “Articles”) and Operating Agreement (“Operating Agreement”) of the Company, and the Offering Circular dated January 1, 2016 (the “Memorandum”).

(b)   The Purchaser acknowledges and agrees that this subscription cannot be withdrawn, terminated, or revoked. The Purchaser agrees to become a Noteholder and to be bound by all the terms and conditions of the Promissory Notes. This subscription shall be binding on the heirs, executors, administrators, successors and assigns of the Purchaser. This subscription is not transferable or assignable by the Purchaser, except as expressly provided in the terms and conditions of the actual Promissory Notes.

(c)   This subscription may be rejected as a whole or in part by the Company in its sole and absolute discretion. If this subscription is rejected, the Purchaser’s funds shall be returned to the extent of such rejection. This subscription shall be binding on the Company only upon its acceptance of the same.

(d)   Neither the execution nor the acceptance of this Subscription Agreement constitutes the Purchaser as a Noteholder, shareholder or secured creditor of the Company. This is an agreement only to purchase the Promissory Notes on a when issued basis; and the Purchaser will become a Noteholder (and not a shareholder or secured creditor) only after the Purchaser’s funds are duly transferred to the account of the Company and the Promissory Notes are issued thereupon to the Purchaser. Until such time, the Purchaser shall have only those rights as may be set forth in this Subscription Agreement.

(e)   The Purchaser’s rights and responsibilities will be governed by the terms and conditions of this Subscription Agreement, the Memorandum, the Promissory Notes, the Articles and Operating Agreement. The Company will rely upon the information provided in this Subscription Agreement to confirm that the Purchaser is an “Accredited Investor” as defined in Regulation D promulgated under the Act, or sophisticated non-Accredited Investors that will be allowed to purchase Promissory Notes.

2.  REPRESENTATIONS AND WARRANTIES BY THE PURCHASER. The Purchaser represents, warrants, and agrees as follows:

(a)   I have received and read the Memorandum and its Exhibits, the Articles and Operating Agreement, and the terms and conditions of the Promissory Notes, and I am thoroughly familiar with the proposed business, operations, properties and financial condition of the Company. I have relied solely upon the Memorandum and independent investigations made by me or my representative with respect to the investment in Promissory Notes. No oral or written representations beyond the Memorandum have been made or relied upon.

(b)   I have read and understand the Articles and Operating Agreement and understand how the Company functions as a corporate entity. By purchasing the Promissory Notes and executing this Subscription Agreement, I hereby agree to the terms and provisions of the Promissory Notes.

(c)   I understand that the Company has limited financial and operating history. I have been furnished with such financial and other information concerning the Company, its management, and its business, as I consider necessary in connection with the investment in Promissory Notes. I have been given the opportunity to discuss any questions and concerns with the Company.

(d)   I am purchasing Promissory Notes for my own account (or for a trust if I am a trustee), for investment purposes and not with a view or intention to resell or distribute the same. I have no present intention, agreement, or arrangement to divide my participation with others or to resell, assign, transfer, or otherwise dispose of all or part of the Promissory Notes.

(e)   I or my investment advisors have such knowledge and experience in financial and business matters that will enable me to utilize the information made available to evaluate the risks of the prospective investment and to make an informed investment decision. I have been advised to consult my own attorney concerning this investment and to consult with independent tax counsel regarding the tax considerations of participating in the Promissory Notes and the Company.

(f)   I have carefully reviewed and understand the risks of investing in the Promissory Notes, including (without limitation) those set forth in the Memorandum and the terms and conditions of the Promissory Notes. I have carefully evaluated my financial resources and investment position and acknowledge that I am able to bear the economic risks of this investment. I further acknowledge that my financial condition is such that I am not under any present necessity or constraint to dispose of the Promissory Notes to satisfy any existent or contemplated debt or undertaking. I have adequate means of providing for my current needs and possible contingencies, have no need for liquidity in my investment, and can afford to lose some or all of my investment.

(g)   I have been advised that the Promissory Notes have not been registered under the Securities Act of 1933, as amended (the "Act"), or qualified under any State Securities Laws (the "Law"), on the ground, among others, that no distribution or public offering of the Promissory Notes is to be effected and the Promissory Notes will be issued by the Company in connection with a transaction that does not involve any public offering within the meaning of section 4(2) of the Act or of the Law, under the respective rules and regulations of the Securities and Exchange Commission.

(h)   All information which I have furnished in this Subscription Agreement concerning myself, my financial position, and my knowledge of financial and business matters is correct, current, and complete.

3.  INVESTOR SUITABILITY STANDARDS. The Company intends to sell the Promissory Notes to qualified investors, including “accredited investors” and sophisticated non-accredited investors. The Company shall sell Promissory Notes to no more than five hundred (500) non-accredited investors and two thousand (2000) accredited investors. All investors who are not deemed “accredited” shall supply such information to the Company as the Company may deem necessary (in its sole and absolute discretion) to determine that the investor, or his, her or its purchaser representative, render the investor capable of evaluating risks of a proposed investment in the Promissory Notes. To qualify as an “accredited investor,” an investor must meet any of the following:

(a) Any bank as defined in section 3(a)(2) of the Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; any insurance company as defined in section 2(13) of the Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of that Act; any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000.00; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered adviser, or if the employee benefit plan has total assets in excess of $5,000,000.00 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

(b) Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940;

(c) Any organization described in section 501(c)(3) of the Internal Revenue Code, limited liability company, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

(d) Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer;

(e) Any natural person whose individual net worth, or joint net worth with that person's spouse, at the time of his purchase exceeds $1,000,000.00 (excluding the person’s primary residence);

(f) Any natural person who had an individual income in excess of $200,000.00 in each of the two most recent years or joint income with that person's spouse in excess of $300,000.00 in each of those years and has a reasonable expectation of reaching the same income level in the current year;

(g) Any trust, with total assets in excess of $5,000,000.00, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in § 230.506(b)(2)(ii); or

(h) Any entity in which all of the equity owners are accredited investors.

4.  AGREEMENT TO REFRAIN FROM RESALE. The Purchaser agrees not to pledge, hypothecate, sell, transfer, assign or otherwise dispose of any Promissory Notes, nor receive any consideration for Promissory Notes from any person, unless and until prior to any such action:

(a)   A registration statement on a form appropriate for the purpose under the Act with respect to the Promissory Notes proposed to be so disposed of shall be then effective and such disposition shall have been appropriately qualified in accordance with applicable securities laws; or

(b)   All of the following shall have occurred: (i) the Purchaser shall have furnished the Company with a detailed explanation of the proposed disposition, (ii) the Purchaser shall have furnished the Company with an opinion of the Purchaser's counsel in form and substance satisfactory to the Company to the effect that such disposition will not require registration of such Promissory Notes under the Act or qualification of such Promissory Notes under any other securities law, and (iii) counsel for the Company shall have concurred in such opinion and the Company shall have advised the Purchaser in writing of such concurrence.

5.  POWER OF ATTORNEY.

(a)   The Purchaser irrevocably constitutes and appoints the Company with full power of substitution as his/her true and lawful attorney-in-fact and agent, to execute, acknowledge, verify, swear to, deliver, record, and file, in the Purchaser’s name or his/her assignee’s name, place, and stead, all instruments, documents, and certificates that may from time to time be required by the laws of the United States of America, the State of Pennsylvania, and any other state in which the Company conducts or plans to conduct business, or any political subdivision or agency of the government, to effectuate, implement, and continue the valid existence of the Company, including, without limitation, the power of attorney and authority to execute, verify, swear to, acknowledge, deliver, record and file the following:

(i)        the Promissory Notes, the Operating Agreement, the Articles and all other instruments (including amendments thereto) that the Company deems appropriate to form, qualify or continue the Company as a limited liability company in the State of Pennsylvania and all other jurisdictions in which the Company conducts or plans to conduct business;

(ii)       all instruments that the Company deems appropriate to reflect any amendment to the Articles or Operating Agreement, or modification of the Company, made in accordance with the terms of the Articles or Operating Agreement;

(iii)      a fictitious business name certificate and such other certificates and instruments as may be necessary under the fictitious or assumed name statute from time to time in effect in the State of Pennsylvania and all other jurisdiction in which the Company conducts or plans to conduct business;

(iv)      all instruments relating to the admission of any additional Noteholders or other creditors, whether secured or unsecured; and

(v)       all conveyances and other instruments that the Company deems appropriate to reflect the dissolution and termination of the Company pursuant to the terms of the Articles and Operating Agreement.

(b)   The power of attorney granted is a special power of attorney and shall be deemed to be coupled with an interest, shall be irrevocable, shall survive the death, dissolution, bankruptcy, or legal disability of the Purchaser, and shall extend to the Purchaser’s heirs, successors, and assigns. The Purchaser agrees to be bound by any representations made by the Company acting in good faith under such power of attorney, and each Noteholder waives any and all defenses that may be available to contest, negate, or disaffirm any action of the Company taken in good faith under such power of attorney.

6.  MISCELLANEOUS.

(a)   CHOICE OF LAWS: This Subscription Agreement will be governed by and construed in accordance with the laws of the State of Pennsylvania, without giving effect to its choice of laws rules.

(b)   ENTIRE AGREEMENT: This Subscription Agreement constitutes the entire agreement between the parties and may be amended only by written agreement between all parties.

(c)   BINDING ARBITRATION: Any dispute, claim or controversy arising out of, relating to, in connection with or under this Subscription Agreement, or the breach or threatened breach thereof, will be resolved through confidential binding arbitration under the then prevailing rules of the American Arbitration Association in Allentown, Pennsylvania (or, if arbitration is unavailable in such venue, as close as physically possible to Allentown, Pennsylvania) and any party making a claim hereunder in whatever form hereby submits to jurisdiction and venue in that forum for any and all purposes. The decision of the arbitrator shall be final and judgment on any award thereupon may be entered in any court having jurisdiction thereof. This paragraph 6(c) shall not preclude either party from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction.

(d)   TERMINATION OF AGREEMENT: If this subscription is rejected by the Company, then this Subscription Agreement shall be null and void and of no further force and effect and no party shall have any rights against any other party hereunder and the Company shall promptly return the funds delivered with this Subscription Agreement.

(e)   TAXES. The discussion of the federal income tax considerations arising from investment in the Company, as set forth in the Memorandum, is general in nature and the federal income tax considerations to the Purchaser of investment in the Promissory Notes will depend on individual circumstances. The Memorandum does not discuss state income tax considerations, which may apply to all or substantially all Purchasers. There can be no assurance that the Internal Revenue Code or the Regulations under the Code will not be amended in a manner adverse to the interests of the Purchaser or the Company.

(f)   DULY AUTHORIZED. If the Purchaser is a limited liability company, partnership, trust, or other entity, the individual(s) signing in its name is(are) duly authorized to execute and deliver this Subscription Agreement on behalf of such entity, and the purchase of the Promissory Notes by such entity will not violate any law or agreement by which it is bound.

(g)   PROMISSORY NOTES WILL NOT BE TRANSFERRABLE. The Purchaser understands that the Promissory Notes will not be freely transferrable and that the Promissory Notes must be held indefinitely unless otherwise permitted by the Company or the Manager.

(h)   SUCCESSORS. The representations, warranties and agreements contained in this Subscription Agreement shall be binding on the Purchaser's successors, assigns, heirs and legal representatives and shall inure to the benefit of the respective successors and assigns of the Company and its directors and officers. If the Purchaser is more than one person, the obligations of all of them shall be joint and several, and the representations and warranties contained herein shall be deemed to be made by, and to be binding upon, each such person and his heirs, executors, administrators, successors, and assigns.

(i)   INDEMNIFICATION. The Purchaser shall indemnify and defend the Company and its directors and officers from and against any and all liability, damage, cost, or expense (including attorneys’ fees) arising out of or in connection with:

(i)          Any inaccuracy in, or breach of, any of the Purchaser’s declarations, representations, warranties or covenants set forth in this document or any other document or writing delivered to the Company;

(ii)         Any disposition by the Purchaser of any Promissory Notes in violation of this Agreement, the Articles or Operating Agreement, the terms and conditions of the Promissory Notes or any applicable law; or

(iii)        Any action, suit, proceeding or arbitration, whether threatened, pending or actual, alleging any of the foregoing.

7.  FORM OF OWNERSHIP. Please indicate the form in which you will hold title to your Promissory Notes. Please consider this election carefully. Once your subscription is accepted, a change in the form of title constitutes a transfer of the Promissory Notes and will therefore be restricted by the terms of the Promissory Notes and the Act. Purchaser should seek the advice of an attorney in deciding in which of the forms to take ownership of the Promissory Notes as different forms of ownership can have substantially varying gift tax, estate tax, income tax and other consequences.

8.  IDENTIFYING INFORMATION.

Individual purchaser(s):

Name of Purchaser: ____________________________________________________________

Social Security No.: __________ - _____ - __________ Date of Birth: ______/______/_______

Name of Co-Purchaser: _________________________________________________________

Social Security No.: __________ - _____ - __________ Date of Birth: ______/______/_______

Name of Co-Purchaser: _________________________________________________________

Social Security No.: __________ - _____ - __________ Date of Birth: ______/______/_______

Name of Co-Purchaser: _________________________________________________________

Social Security No.: __________ - _____ - __________ Date of Birth: ______/______/_______

Family Trust purchaser:

Exact name of Family Trust: ______________________________________________________

______________________________________________________________________________

Federal Tax Identification No. _____________________________________________________

Address (including City, State, and Zip)______________________________________________

______________________________________________________________________________

Corporate purchaser:

Name of Limited liability company:

____________________________________________________________

Federal Tax Identification No.______________________________________________________

State and date of inlimited liability company

_____________________________________________________

Partnership or other business entity purchaser:

Name of Partnership or other business entity: _________________________________________

______________________________________________________________________________

Federal Tax Identification No. _____________________________________________________

State and date of organization _____________________________________________________

For limited liability company, business trust, investment company, partnership or other business entity:

Fiscal year end:_______________________________________________________________

Principal place of business ______________________________________________________

Phone number of business ______________________________________________________

What is the entity’s net worth, on a consolidated basis, according to its most recent audited

financial statement? ___________________________________________________________

Company Pension or Profit Sharing Plan purchaser:

Exact Name of the Plan: _________________________________________________________

_____________________________________________________________________________

Name(s) of the Trustee(s): _______________________________________________________

_____________________________________________________________________________

Trustee’s State Residency: _______________________________________________________

Federal Tax Identification No. ____________________________________________________

State and date of organization ____________________________________________________

Describe and set forth the value of the assets of the Plan or Trust: ________________________

_____________________________________________________________________________

Please identify the person(s) with investment control over the Plan or Trust assets and that

person’s state of residence.

_____________________________________________________________________________

_____________________________________________________________________________

Please identify the person(s) responsible for the ministerial duties of administering the Plan or

Trust (the Trustee) and that person’s state of residence.

_____________________________________________________________________________

_____________________________________________________________________________

9.  SPECIFIC INFORMATION REQUIRED FROM ENTITIES.

(INDIVIDUALS: SKIP TO SECTION 11 BELOW)

ACCREDITED INVESTOR STATUS OF THE ENTITY

Please select a category for the entity:

_____ (1) A bank as defined in section 3(a)(2) of the Act, or a savings and loan association or other institution as defined in section 3(a)(5)(a) of the Act, whether acting in its individual or fiduciary capacity;

_____ (2) A broker or dealer registered pursuant to section 15 of the Act;

_____ (3) An insurance company as defined in section 2(13) of the Act;

_____ (4) An investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of that Act;

_____ (5) A Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958;

_____ (6) Any plan established and maintained by a State, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000;

_____ (7)* An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in section 3(21) thereof, which is either a bank, savings and loan association, insurance company or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

_____ (8) A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;

_____ (9) Any organization described in section 501(c)(3) of the Internal Revenue Code, limited liability company, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

_____ (10)** A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities of the Company being offered, whose purchase is directed by a person who has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of the prospective investment in the Company;

_____ (11)*** An entity in which all the equity owners are accredited investors.

*Note for Certain Employee Benefit Plans: If you are a self-directed plan that believes it is an "accredited investor" because investment decisions are made solely by persons that are accredited investors, please complete the information for individuals pursuant to Section 11 with respect to you and each such person participating in making the investment decision.
**Note for Trusts: If you are a trust that believes it is an "accredited investor", please complete the information for individuals pursuant to Section 11 with respect to you and each person participating in making the investment decision.

***Note for Certain Entities: If you are an entity that believes it is an "accredited investor" by virtue of the accredited investor status of each equity owner thereof, please complete the information for individuals pursuant to Section 11 with respect to you and each such equity owner.         

10.  FURTHER REPRESENTATIONS. Purchaser (whether an individual or entity) understands that the Company will be relying on the accuracy and completeness of the statements and responses contained in this Subscription Agreement. Purchaser represents and warrants to the Company as follows:

1.        My statements and responses contained in this Subscription Agreement are complete and correct and may be relied on by the Company for the purpose of complying with all applicable security laws and to determine whether I am a suitable investor.

2.        I will notify the Company immediately of any material change in any statement or response made in this Subscription Agreement before acceptance by the Company of this subscription.

3.        I have sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment, or I have consulted with Investment Advisors and other professional advisors who have sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of prospective investment.

4.        I am able to bear the economic risk of an investment in the Promissory Notes for an indefinite period of time and understand that an investment in the Promissory Notes is illiquid and may result in a complete loss of such investment.

5.        Purchaser understands and agrees that the Company is relying upon the truthfulness of the certification being made by Purchaser as to Purchaser’s status as an Accredited Investor for the reason checked in Section 9 above or Section 11 below. Purchaser further understands and agrees that the Company may request to be shown, in confidence, documentation reasonably satisfactory to the Company supporting the certification by the Purchaser as to the Purchaser’s status as an Accredited Investor. The Company reserves the right to refuse to accept any subscription as to which the Company is not satisfied (in its sole and absolute discretion) that the Purchaser is an Accredited Investor.

6.        Purchaser agrees and understands that in making this investment, Purchaser: (a) must have sufficient knowledge and experience in such financial and business matters to be capable of evaluating the merits and risks of a purchase of the Promissory Notes; or (b) must retain the services of an “Investment Advisor” (who may be an attorney, accountant, or other financial adviser unaffiliated with, and who is not compensated by, the Company or any affiliate or selling agent of the Company, directly or indirectly) for the purpose of aiding in the evaluation of this particular transaction.

11.  SPECIFIC INFORMATION REQUIRED FROM INDIVIDUALS.

ACCREDITED INVESTOR STATUS OF INDIVIDUAL

Please select a category for the individual:

_____ (1) Any natural person who had an individual income in excess of Two Hundred Thousand Dollars ($200,000) in each of the two most recent years or joint income with that person’s spouse in excess of Three Hundred Thousand Dollars ($300,000) in each of those years and who has a reasonable expectation of reaching the same income level in the current year;

_____ (2) Any natural person whose individual net worth or joint net worth, with that person’s spouse, at the time of their purchase exceeds One Million Dollars ($1,000,000.00) (excluding the person’s primary residence);

_____ (3) A director or executive officer of the Company

12.  INVESTMENT EXPERIENCE OF PURCHASER.

ALL PURCHASERS SHOULD COMPLETE THIS SECTION

If Purchaser is not an individual, please provide the following information about each officer, general partner, and/or other person who will participate in the decision to purchase the Promissory Notes.

Person No. 1:

Educational background (name of college attended, major, degree obtained, if any, and year):

_______________________________________________________________________

Investing courses attended (list the name of each, sponsor, and date of attendance):

_______________________________________________________________________

Any professional licenses or registrations, including bar admissions, accounting certifications, real estate brokerage licenses, and SEC or state broker/dealer registrations held:

________________________________________________________________________

Person No. 2:

Educational background (name of college attended, major, degree obtained, if any, and year):

_______________________________________________________________________

Investing courses attended (list the name of each, sponsor, and date of attendance):

_______________________________________________________________________

Any professional licenses or registrations, including bar admissions, accounting certifications, real estate brokerage licenses, and SEC or state broker/dealer registrations held:

________________________________________________________________________

Has Purchaser had the following investment experience? Check all that apply:

[Signature Page to Subscription Agreement follows]

[Signature Page to Subscription Agreement]

FOR GOOD AND VALID CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged, the Purchaser, intending to be legally bound, has executed this Subscription Agreement this ___________ day of _________________________, 20________.

BY PURCHASING PROMISSORY NOTES AND EXECUTING THIS SUBSCRIPTION AGREEMENT, EACH PURCHASER HEREBY AGREES, UPON ACCEPTANCE BY THE COMPANY, TO BE LEGALLY BOUND BY THE TERMS OF THE PROMISSORY NOTES.

ACCEPTANCE: (NOT VALID UNTIL ACCEPTED BY COMPANY)

ACCEPTANCE

The Company has accepted this Subscription Agreement as of this ___day of ________________, 20___, by the signature of a duly authorized representative.

PENNSYLVANIA DEPARTMENT OF STATE

BUREAU OF CORPORATIONS AND CHARITABLE ORGANIZATIONS

	Return document by mail to:
					Certificate of Organization
					Domestic Limited Liability Company
Name					DSCB:15-8913 (rev. 7/2015)
Address
City		State	Zip Code
					8913
	Return document by email to:

Read all instructions prior to completing. This form may be submitted online at https://www.corporations.pa.gov/.

Fee: $125

In compliance with the requirements of 15 Pa.C.S. § 8913 (relating to certificate of organization), the undersigned desiring to organize a limited liability company, hereby certifies that:

DSCB: 15-8913-2