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Midwest Holding enters loan agreement

Midwest Holding Inc. has entered into a loan, stock and note purchase agreement with Xenith Holdings LLC.

Under the agreement, Xenith will initially loan $600,000 to Midwest after receiving approval from the Nebraska Department of Insurance. The loan will be repayable upon maturity in 10 years with cash interest of 4% per annum payable quarterly and accrued interest of another 4% per annum payable upon maturity.

The first $500,000 of the loan will be convertible, at the lender's choosing, into about 24.3 million of Midwest's common shares. The remaining $100,000 will also be convertible at the same rate if Midwest has adequate voting common stock available.

Xenith will also initially buy 1.5 million shares of Midwest's newly created class C preferred stock for a total of $1.5 million. The preferred stock will be convertible, at the lender’s choosing, into about 72.9 million of Midwest's common shares.

After the sale and issuance of the $600,000 notes and the preferred stock, the lender may loan up to an additional $22.9 million to Midwest. Any loans made under this election will also be convertible into Midwest's voting common stock.