FILED IN MY OFFICE DISTRICT COURT CLERK 6/10/2013 2:11:42 PM KENNON CROWFIURST STATE OF NEW MEXICO COUNTY OF CHAVES FIFTH

JUDICIAL DISTRICT COURT

NEW MEXICO MILITARY INSTITUTE, Plaintiff, V. NMMI ALUMNI ASSOCIATION, INC, a New Mexico non-profit corporation, Defendant. Case No.: CDY D-504-CV-2013-00339

COMPLAINT FOR RECEIVERSHIP, CONSTRUCTIVE TRUST, MANDATORY INJUNCTION, AND ACCOUNTING COMES NOW Plaintiff, the New Mexico Military Institute, by and through its counsel, Hinkle, Hensley, Shanor & Martin, L.L.P. (Richard E. Olson and Parker El. Poise) and hereby files this Complaint for Receivership, Constructive Trust, Mandatory Injunction, and

Accounting and in support thereof would show this Court as follows:

I. Introduction This case is about an unfortunate series of events arising as a result of an absolute and longstanding failure of the NMMI Alumni Association, Inc. (the "Association"), a New Mexico Non-Profit Corporation, to properly account, or account in any fashion whatsoever, for financial transactions and comply with contractual provisions to prepare, submit, and obtain approval for annual budgets that has caused the New Mexico Military Institute ("NMMI" or "the Institute"), a

Complaint for Receivership, Constructive Trust, Mandcrtoq Injunction, and Accounting

State educational institution, to terminate its relationship with the Alumni Association. The Association has acted over the years as NMMI's primary alumni outreach facility and has, as a consequence, an agency relationship with NMMI which, as a consequence of the Association's continued failures to properly account, has been breached by the Association. As a for instance, the Association has, for a period of well over a year, failed to generate or provide the most basic monthly accounting statements showing the status of its financial affairs, despite being responsible for in excess of $5 million in monies held for the benefit of NMMI. The Association is no longer able to carry out its purpose, and the Association's Board of Directors is currently unable to manage the corporate affairs in accordance with the corporation's governing documents. Accordingly, Plaintiff seeks this Court's intervention for the imposition of a receivership and constructive trust over funds pledged to benefit NIVLMI, the issuance of a mandatory injunction freezing the Association's accounts until a receiver has been appointed, for the entry of an order requiring the Association to desist using any of the Institute's intellectual property rights, and for the entry of an order requiring the Association to account to the Institute for funds received while acting as an agent of the Institute. IL Parties

I.

NMIVIT is a state educational institution as defined by Article XII, Section 11 of

the New Mexico Constitution with its principal office in Chaves County, New Mexico. 2. The Association is a New Mexico non-profit corporation with its principal office

in Chaves County, New Mexico.

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DJ. Jurisdiction and Venue 3. 4. The Court has personal and subject matter jurisdiction over the parties and claims. Venue is proper in this Court pursuant to NMSA 1978, 38-3-1 by virtue of the

fact that the principal office of each party is located in Chaves County, New Mexico. IV. Statement of Facts A. The Association's Corporate Documents 5. The Association is a New Mexico Non-Profit Corporation classified under the

Internal Revenue Code as a 501(c)(3) tax exempt organization. See 26 U.S.C. 501(c)(3). 6. purpose is: a. to promote the interest and welfare of the New Mexico Military Institute located at Roswell, New Mexico; b. to afford a permanent means of contact between the New Mexico Military Institute and its alumni; and, c. to create, establish and maintain scholarships and to collect and administer trust funds and endowments for the use and benefit of the New Mexico Military Institute Alumni Association and to do generally any and all things which may be deemed advisable, necessary or desirable in the interest of the New Mexico Military Institute, its cadets, faculty, and alumni. See Association's Articles of Incorporation Art. III "Purpose" (emphasis added). [Ex. 1, p.1] 7. is to: Furthermore, the Association's By-Laws provide that the Association's purpose The Association's Articles of Incorporation provide that the Association's

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a. to promote the interest and welfare of the NMMI; b. to be the gateway that fosters lifelong connections between its Alumni and NMMI; c. to promote the distinctive values (duty, honor, achievement) of NMMI; d. to provide avenues for Alumni to interact with each other and with

NMIVIL
e. to help establish and maintain scholarships, in conjunction with the New Mexico Military Institute Foundation, for deserving cadets to attend

MIMI;
f. to operate in a manner that is connected with and is responsive to the positive needs of NIWVII.

See Association's Amended By-Laws of the NMMI Alumni Association, Inc. (a Non-Profit Corporation) Article III "Purpose" (emphasis added) [Ex. 2]
8. Additionally, the Association's Articles of Incorporation provide that, upon

dissolution, "the Board of Directors shall, after paying or making provision for the payment of all the liabilities of the Corporation, dispose of the assets of the Corporation to the New Mexico Military Institute, Roswell, New Mexico. " "Dissolution" (emphasis added) [Ex I, p.4] 9. Thus, it is clear that the Association's principal and authorized purpose is to serve

See Articles of Incorporation Art. IX

and support the New Mexico Military Institute. 10. The Association's sole purpose was to serve as the Institute's alumni resource.

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11.

The Association solicited funds on behalf and for the benefit of the Institute and

served as the Institute's agent with regard to solicitation of funds and alumni affairs. 12. Alumni and others have made numerous and substantial monetary contributions to

the Association on the condition, both express and implied, that those funds directly benefit NMMI. 13. Association. Accordingly, NMMI is the intended beneficiary of the funds maintained by the

B. The Association's Assets

14. Upon information and belief, the Association maintains three separate accounts. a. A "Permanently Restricted" account. Donated funds are often received with restrictions and must be applied in accordance with donor's intent,

e.g. on condition that they fund NMMI cadet scholarships or support

NMMI programs. b. A "Temporarily Restricted" account. The temporarily restricted funds have been contributed to the Association for a specific purpose and are applied to that specific purpose (e.g. to help fund NMMI's annual Trail Ride). c. An "Unrestricted" account. These monies were donated to the Association without restrictive conditions or are funds from the Association selling placards and engravings for flagpoles, benches, and bricks on NMMI

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property, and a very small portion of this account comes from membership dues. (the "Accounts"). 15. The majority of the funds held by the Association are restricted and are required

to be used to benefit the Institute in some way. 16. The Association solicits tax deductible donations from alumni and friends and

then distributes those funds in accordance with the donor's intent, which, unless indicated otherwise by the donor, ultimately are to be distributed or utilized in a fashion that benefits the Institute. 17. Some funds now held by the Association are a result of annual membership dues;

however, the Association only has 241 annual dues paying members, and at $50.00 per annual membership this equates to roughly $12,050.00 per year. The other 2,141 members are considered Life Members and have paid a one-time $750.00 fee to become members for life and as a result such dues are not reoccurring. Thus, in total, the Association has roughly 2,382 members, in comparison to the Institute's 20,000 plus alumni. 18. Historically, the Association has been unable to be financially self sustaining.

All overhead expense is provided by the Institute (including phones, computers, and office space) and a large portion of its annual budget comes from funds distributed to the Association from the New Mexico Military Institute Foundation, Inc.'

The Foundation has provided over S500,000.00 to the Association since 1995 in order to keep the Association solvent.

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C. Financial Management of the Association 19. In 2009, then Association Executive Secretary, Mr. Reggie Franklin, began

questioning the Association's financial bookkeeping and had serious concerns with regard to the Association's ability to fund current expenditures. 20. After Mr. Franklin conveyed his concerns to the Association's Board of

Directors, Dr. Randy Brown, then President of the Association's Board of Directors, was so concerned about the ability of the Association to care for the monies entrusted to it that he directed that the scholarship fund be moved to the NMMI Foundation for better oversight and management. 21. Additionally, the Alumni Association Board of Directors hired Tardy & Co. P.C.

to complete an internal review of the corporation's financial affairs ("the Tardy Report"). 2 22. The Tardy Report identified the Association's primary function "to develop

between alumni and the Institute, a strong relationship that supports the educational goals, enhances the life-time experience of the alumni and supports the mission of the Institute." See

Tardy Report p.2.

23. The Tardy Report also indentified that "there was potentially some confusion

over the use and the allocation of certain funds earnings... [and] a certain process for allocation to funds was followed that was not understood and/or agreed to by the Board and may be contrary to the original intent of the donor's gifts." Tardy Report p.7.

Available at http://www.nmmi.eduiregents/documentsfrardy%2OReport.pdf

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24.

Furtheimore, "all programs did not have specific budgets" and "the Association

was working without an approved budget for the year." Tardy Report p. 7. 25. Most alarmingly; however, was the fmding that "with continued losses in

investment accounts, it has become clearer that the Association has been operating on cash transfers from the Alumni Endowment fund which are eroding the corpus. These transfers have been occurring for several years and continuance of the practice without determining ways to increase funding from other sources for the group could put the Association's existence in jeopardy." Tardy Report p. 7-8. 26. The Tardy Report concluded that "based on representations made by Board

members and review of financial documents, proper fiscal management of the Association has been lacking." Tardy Report p.9. 27. These findings proved very troubling for the Institute as the Association was the

Institute's alumni resource and had used the Institute's good name and offices in soliciting funds intended to benefit the Institute. 28. A change in Association operations occurred in July 2010 when Mr. Franklin

resigned as the Association's Executive Secretary and the Association then hited Mr. Lee Jones. 29. In September of 2010, MG Jerry W. Grizzle wrote to Dr. Randy Brown and

requested to meet with the Association's Executive Committee with the NMMI Board of Regents and the New Mexico Military Institute Foundation, Inc. (the "Foundation") regarding the Association's compliance with its agreements under which the Association operated in its relationships with the Institute and the Foundation.

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30.

Representatives from the Institute met with Association Board members to

address various issues, including financial solvency and compliance with agreements between the entities, which resulted in an agreement by the Association to correct deficiencies. 31. However, notwithstanding this agreement and the serious shortcomings noted in

the Tardy Report no adequate curative actions were implemented by the Association to correct or improve the Tardy Report's noted deficiencies. 32. As a result of Board inaction, Dr. Randy Brown resigned from his position and

membership on the Board. 33. Mr. John Phinizy then took over as the Association's Board President and

immediately increased staff, in contravention of the Tardy Report's recommendation, and also directed that the management of the endowed scholarships be transferred back to the Association from the Foundation. 34. The Association then terminated Mr. Jones and hired Mr. David Romero as the

Association's Executive Secretary. 35. At that point, all meaningful action to correct or improve the Association's

position relative to the Tardy Report's recommendations ceased. 36. After Homecoming in 2011, Mr. Jock Brownfield was elected as the

Association's Board President. 37. Again, Institute representatives met with Association representatives to address

the continuing issues related to financial discrepancies and the Association's inability to maintain compliance with its agreements with NMMI.

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38.

Mr. Brownfield and the Association committed to address and correct the various

mismanagement issues. 39. In January of 2012, without knowledge of the Association Board, David Romero

attempted to transfer the management of the scholarship fund to a third party accounting firm, May-Taylor and Co., but May -Taylor refused to accept the responsibility. 40. However, May-Taylor did attempt to establish a new set of accounting

procedures and books for the Association, but repeated subsequent requests for variances from the Association made bookkeeping entries convoluted and difficult and left May-Taylor with the limited ability to only perform minimal operational entries. 41. In July 2012, the Association Board did not renew Mr. Romero's employment

contract and hired Mr. James Lowe to serve as the Association's Executive Secretary, now titled Executive Director. 42. Mr. Lowe immediately began to investigate the Association's operations and

tried to ascertain its true financial solvency. 43. 44. Mr. Lowe quickly realized the state of the Association's financial disrepair. In August of 2012, Mr. Lowe discovered that the Association had not been

keeping monthly financial statements since March 2012. As a result, the Association had no year-end financial statement for the fiscal year ending June 30, 2012. 45. In October of 2012, unprepared to file a year-end tax return, the Association's

auditor requested an extension from the IRS, which was granted until February 15, 2013, but the Association did not meet the February 15, 2013 deadline and requested another extension.

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46.

In December of 2012, May-Taylor finally completed a year-end financial

statement for the fiscal year ending June 30, 2012, but because May-Taylor's statement was based upon incomplete information provided by the Association, the statement had numerous errors. 47, By January of 2013, the Association produced another inaccurate year-end

financial statement and had only recreated monthly statements through July and August of 2012. 48. In January of 2013, the Association met with Foundation and Institute

representatives to develop a fiscal year 2013 budget, which was required to be submitted by the Association almost a year prior in April of 2012. 49. During that process, further incorrect revenue and expense entries were

discovered, again affecting the June 30, 2012 year-end financial statement. 50. By February of 2013 the Association still had no monthly financial statements

for September 2012, October 2012, November 2012, December 2012 or January 2013. 51. On February 11, 2013, the Association's Executive Director, Mr. Jim Lowe,

submitted a report to the Association's Board outlining the grim situation. 52. At that point, the Institute was compelled to take further and more far reaching

steps to protect its interests and to ensure the protection of the assets maintained by the Association.

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D. The Memorandum of Agreement and Its Termination 53. As a state "agency" the legislature requires that "[p]rior to [NMMI] accepting

property or funds that have been transferred to an agency by an organization, the agency and the organization shall enter into a written agreement..." NMSA 1978, 6-5A-1(B). 3 54. Thus, in order to accomplish the purpose of the Association, to clarify the rights

and responsibilities between the two entities, and to insure compliance with state statute, the Association and NMMI entered into Memorandum of Agreement ("MOA" or "Agreement"), the most recent and controlling document having been executed on March 30, 2012. [Ex. 3] 55. The IVIOA provides that the Association is permitted to use, with prior written

approval, the name "New Mexico Military Institute" as well as other trademarks or logos, in connection with activities in support of the Institute. MOA Article ifi. 3.1(C). [Ex. 3, p. 5] 56. Furthermore, the Association is to organize, maintain, and update an "alumni

database" on behalf of the Institute to serve as a primary records repository and single point of information relating to alumni of the Institute. MOA Article. IL 2.1(g). [Ex. 3, p. 3] 57. Under the MOA, in order to maintain its relationship with the Institute and

competently serve and support NMMI, the Association is required to:

"Agency" is defined as, inter alio, "any public institution of higher education or public post-secondary educational institution..." NMSA 1978, 6-5A-1(A)(I). "Organization" is defined as "an organization that has been granted exemption from the federal income tax by the United States commissioner of internal revenue as an organization described in Section 501(c) of the Internal Revenue Code of 1986, as amended or renumbered, and whose principal and authorized purpose is to complement, contribute to and support or aid the function of or forward the purposes of a single agency through financial support or contribution of services, goods, data or information that help or aid the agency in carrying out its statutory purpose and goals, including, but not limited to, the provision of scholarships to students of educational institutions and the provision of grants to supplement ongoing research or to provide funds for research and programs being carried out by an agency." Thus, NMM1 is clearly an " agency" and the Association is clearly an "organization as defined by this subsection.
3

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a. "maintain a financial accounting system considered adequate under customarily and currently accepted governmental accounting standards, or such other standards as may be required by law, in staff coordination with the Institute and its internal and external auditors;" b. "cause its financial operations to be audited annually in accordance with generally accepted governmental auditing standards by an independent professional auditor approved by the Institute..." c. "cause a copy of the annual audit.., to be furnished to the Institute..."

See MOA Article H. 2.1 "Undertakings of the Association," subsections (1-n) [Ex 3, p. 4]
58. Thus, the Association is required to keep acceptable financial accounting records

and to provide them to the Institute to ensure compliance with the MOA. 59. As of February of 2013, the Association had not completed any of the above

financial accounting requirements for the preceding fiscal year of 2012 (including the preparation of a 2012 budget), nor had the Association formulated a fiscal year 2013 budget, despite being seven months into the new fiscal year. 60. Due to the Association's numerous, and seemingly insurmountable, difficulties

in managing its own affairs and its complete failure to fulfill its obligations set forth under the MOA, on February 21 ,2013, the Institute elected to terminate the relationship between the two entities. [Ex. 4]

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61.

Under the MOA, either party may terminate the Agreement upon at least 60 days

written notice. See MOA Article TV.4.5 [Ex. 3, p.6] A defaulting party may then have 30 days to cure. Id. 62. In the event the Association were unable to cure, the Association would no

longer be provided working space on NMMI campus, would lose access to the alumni database, would no longer be permitted to use the name "New Mexico Military Institute" in its corporate title or be permitted to use any of the Institute's intellectual property rights, including logos and trademarks. See MOA Article TV.4.5 [Ex. 3, p.6] 63. The Association was unable to cure its financial deficiencies within the requisite

30 day cure period. 64. As a result of the Association's failure to cure it defaults, on April 22, 2013, the

Institute delivered its final notice of termination of the MOA to the Association, terminating the relationship between the two entities. [Ex. 5] 65. Thereupon, the entities began negotiations regarding a suitable plan to provide

support and services to NMMI alumni. 66. As a result of seemingly productive ongoing negotiations between the parties and

the Association's willingness to work in coordination with the Institute to develop more specifically a plan for the dissolution of the Association and the distribution of Association's assets, the Institute did not fully effectuate the MOA's tennination provision and continued to provide working space and personnel support to the Association.

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67.

On May 4, 2013, in accordance with the parties' negotiations, the Association's

Board of Directors held a special meeting to adopt a resolution to recommend the dissolution of the corporation which would be submitted to the Association membership at-large for an affii ming vote and to begin the process of transferring the Association's assets to the Foundation and to agree to a forbearance document tendered by the Institute that would stay the Institute's enforcement of the MOA termination provisions so that the Association could continue to have a working space in order to effectuate the necessary steps towards dissolution. 68. However, on May 4, 2013, by a vote of 5-3, the Association's Board of Directors

did not adopt a resolution for dissolution and rejected the terms of the forbearance document. 69. Without an acceptable form of forbearance, the Institute effected the MOA

termination provisions and requested that the Association move its property from the Institute campus. 70. campus. 71. The status of the funds in custody of the Association which are held for the On May 13, 2013, the Association removed most of its property from the NNLMI

benefit of the Institute are now uncertain, if not in jeopardy. 72. The Association, being the custodian for those funds, is inhibited in its ability to

administer the funds in accordance with donors' intent, as the relationship between the Institute and the Association is now severed, and, the integrity of the funds is, at a minimum, in question, as a result of the longstanding history of financial mismanagement by the Association.

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73.

In order to protect those funds, the Institute made demand upon the Association

to transfer the funds over to the Foundation for proper naaintenance. 74. In accordance with the Association's agreement, the Institute also made demand

for the Association to desist in using the Institute's name and intellectual property rights, including but not limited to trademarks, logos, and service marks. 75. 76. The Association made no response to the Institute's demand. However, on Tuesday, May 14, 2013, the Association's President called for a

special meeting of the Association's Board of Directors for Friday May 17, at 1:00 p.m. in order to devise a plan to transfer the restricted and permanently endowed funds over to the Foundation. 77. Unfortunately, the Association's Board of Directors became increasingly

divisive, with several members calling for resignations of other members and accusations of breach of various duties having been made. 78. In opposition to the official Board meeting called by the President, other Board

members called for a Board meeting to occur off campus on Thursday, May 16, 2013. 79. members. Six board members attended the Thursday meeting called by other board

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80.

Four board members attended the meeting called by the President of the

Association's Board of Directors the next day on Friday, May 17, 2013, which meeting was boycotted by five of the six Board members who attended the Thursday meeting. 4 81. Two splintered Board's were now acting independently of each other, seemingly

in contradiction of each other, putting the management of the already struggling corporation in complete jeopardy. 82. Thus, the status and safety of the funds in the custody of the Association for the

benefit of the Institute are in serious question. E. The Alliance Agreement 83. The Association had also entered into an agreement which was to govern the

relationship between the Institute, the Association and the NMM1 Foundation (the "Fourth Amended Alliance Agreement" or "Alliance Agreement"). 84. The Fourth Amended Alliance Agreement, effective July 1, 2012, outlines the

relationship between the entities to coordinate fundraising efforts with a goal of maximizing support for NMMI programs and projects while minimizing fundraising expenditures. Alliance Agreement attached hereto. [Ex. 6] 85. The goal was to allow the involved entities to work together to maximize the See

"Annual Fund" fundraising efforts. 86, Under the Alliance Agreement, "[a]nnual fund donations recorded and receipted

by the Association, other than membership fees, will be paid over to the Foundation, which
4

One Board member of the six that met on Thursday resigned in advance of the Friday meeting.

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shall treat such funds as restricted funds to be administered pursuant to the terms of this Agreement" Alliance Agreement Section 5.4. [Ex. 6, p. 8] 87. The Association, completely unaware of what funds it has received as a result of

its lack of accounting processes, has not paid over any funds to the Foundation. 88. Furthermore, the Foundation and the Association are required to develop and

craft budgets to be submitted to a committee designated by the parties to the Alliance Agreement ("Alliance Committee") annually for review and approval. 89. The Association is required to submit its annual budget to the Alliance

Committee on or before April 1 for review for the next fiscal year beginning the following July.

See Alliance Agreement Section 6.3. [Ex. 6, p. 10]

90. 91. Thus, the Association was required to submit its 2013 budget on April 1, 2012. However, to date, the Association has yet to create a budget for 2013, let alone

submit one to the Alliance Committee in a timely fashion. 92. The Association's inability to abide by its obligations under the Alliance

Agreement was a determining factor in the Board of Regents' decision to terminate its relationship with the Association. 93. Additionally, on May 22, 2013, the Institute terminated the Alliance Agreement

in accordance with the relevant provision. 94. As both governing documents, the MOA and the Alliance Agreement, between

the two entities are terminated, the relationship between the Institute and the Association is now severed.

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95.

The Institute now seeks this Court's intervention and assistance (i) to freeze the

Accounts in order to prevent waste or misuse by the Association, (ii) to order the Association to account to the Institute for the funds the Association received as the Institute's agent, (iii) to appoint a receiver to manage the Accounts until their final disposition is determined, (iv) to

i mpose a constructive trust to protect the funds in the Accounts retained by the Association, (v)
to order the transfer of the Association's funds to an entity capable of managing and distributing the funds in accordance with the donors' intent, and (vi) to enforce the MOA's provision revoking the Association's privilege to use the Institute's intellectual property rights, including logos and trademarks. V. Causes of Action 1. Claim for Receivership 96. Each of the preceding paragraphs numbered 1-95 are incorporated herein, the

same as if set forth in full. 97. The Institute seeks the appointment of a receiver over the Accounts in the

custody of the NMMI Alumni Association Inc. 98. 44-8-3, the Accounts retained by the Association are the Under NMSA 1978,

property that is subject to the receivership estate. 99. Upon information and belief, those Accounts are currently held by or invested in

accounts of Wells Fargo Bank. 100. Because those Accounts were solicited and obtained by the Association as an

agent for and on behalf of and to ultimately benefit the Institute, the New Mexico Military

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Institute is an "interested person" as it has an interest in the receivership estate. NMSA 1978, 44-8-3(C). 101. As the relationship between the Institute and the Association is terminated, the

Association cannot fulfill the conditions placed upon the monies the Association received. 102. As a result, the Court may appoint a receiver, as this is an action between or

among persons "owning or claiming an interest in the receivership estate," and also because "just cause exists, and 'irreparable harm may result from failure to appoint a receiver" NMSA 1978, 44-8-4(B)(2) and (B)(5). 103. The Institute respectfully requests a Court appoint a receiver to be determined. See

2. Claim for Constructive Trust

104.

Each of the preceding paragraphs numbered 1-103 are incorporated herein, the

same as if set forth in full. 105. Plaintiff respectfully requests the Court to impose a constructive trust over the

Accounts and all others funds intended to benefit the Institute. 106. Numerous solicitations were made and numerous donations were given to the NMMI Alumni Association, Inc. upon condition that they be used to benefit the Institute. 107. 108. The Institute is an intended beneficiary of funds retained by the Association. The Association would be unjustly enriched if it were allowed to retain funds

given by donors who received charitable deductions on the premise that the donations would benefit NMMI.

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109.

The condition of the Accounts in question must be fulfilled, and such funds must

be ordered transferred to a qualified entity in accordance with the requirement that they benefit the Institute. 110. Association. 111. Given the Association's Board's inability to act in accordance with its expressed Any other result would be inequitable and result in unjust enrichment to the

and implied obligations, the Court's intervention is necessary. 112. As a result, the Institute requests the Court impose a constructive trust over the

Association funds. 3. Claim for Mandatory Injunction 113. Each of the preceding paragraphs numbered 1-112 are incorporated herein, the

same as if set forth in full. 114. The Institute respectfully requests that the Court issue a preliminary and

permanent mandatory injunction, freezing the Association's Accounts until a receiver is appointed and prohibiting the Association from using NIvLMI logos, trademarks, and name in accordance with the relevant MOA provision. 115. Additionally, given the inability of the Association to transfer its funds to the

Institute absent an MOA, combined with the inability of the Board to meet as one Board to work towards a solution wherein the funds of the Association can be distributed in a fashion that meets the conditions on those funds, it is apparent that the Association cannot properly manage its own affairs and puts the future of the funds in peril.

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116.

As a result, the Institute respectfully requests this Court enter an injunction

ordering the transfer of the Association's assets to an entity (such as the Foundation) capable of managing and distributing the assets in accordance with the condition upon those funds that are intended to be of benefit to the Institute and its cadets. 4. Claim for an Accounting 117. Each of the preceding paragraphs numbered 1416 are incorporated herein, the

same as if set forth in full. 118. 119. Institute. 120. Institute. 121. As a result of the termination of the relationship between the parties, the As such, it was an agent of the Institute and has fiduciary obligations to the The Association served as the alumni relations aim of the Institute, The Association solicited and received funds from third parties to benefit the

Association now has a duty to account to the Institute for the funds it received which were, expressly or impliedly, for the benefit of the Institute and/or its cadets. VI. CONCLUSION WHEREFORE, Plaintiff respectfully requests that this Court grant a mandatory injunction (i) freezing the Association's Accounts to preclude waste and misuse of the corporate assets; (ii) prohibiting the Association from using NMMI logos, trademarks, and name, (iii) imposing a constructive trust on the funds in the custody of the Association's until the Court fully resolves the issues of entitlement to and management of said funds of the Association, (iv)

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appointing a receiver to handle the Accounts which are the subject funds of this dispute, (v) ordering the Association to account to the Institute for the funds it received while an agent for the Institute, (vi) ordering the Association to transfer all funds received for a charitable purpose to the Foundation or other appropriate custodian so that the condition of those funds may be met, (vii) and for such other and further relief that the Court deems just and proper. Respectfully submitted, HINKLE, HENSLEY, SHANOR & MARTIN, L.L.P. B Richard E. Olson [email protected] Parker B. Folse pfolse@hinklelawfirm. corn P.O. Box 10 Roswell, New Mexico 88203 Tel: (575) 622-6510 Fax: (575) 623-9332 Attorneys for the New Mexico Military Institute

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,RESTATED -/5.2 9-4

ARTICLES OF INCORPORAT ON OF ALUMNI ASSOCIATION, IN (A Non-Profit Cceponstion) Wo, the undorsignod, BOW of Dirsztors of the tiMMa ALUMNI ASSOCIAlION pursuant to Section 33-8-39 NMSA 1978 Comp, upon =EWA duly mado, seconded, and passed by a unottimeus vote, do ivreby mono sod arneral the Ankles of Incorporation of the NMMI Alumni Association which shall truporscdc the origirial Articles of hu;orporatIon ad all Antentimoras thereto.

tkRlICLE, I
NAME Msts name of the co/Isolation isNMMS Alumni Association, Inc.

ARTICLE U.
REGISTERED OFFICE Thc registered office of thy Corporation in thc Soto of New Mexico until olficnsise designated as provide:16y law shall be at Roswoll, New Mexico.

ARTICL4 In
PURPOSE This corporation is organised oxclusively for charitable purposes, including for such purposes the making of distributions to organizations that quail/
11.5 CUMpt organiratiena under

section 301(c)(3) of the Internal Revenue Code of t9136 (or any amendment thereto). The objcchr arid purpose3 for which the Corporation is formed ore Its follows to promote the intarcst and wilfaro of New Maxie* Military Institute located in Roswell, New Mexico; to afford a permanent MUM of contact between the New Mexico Military Instituk and its alumni; to

1. 1

mate, establish and maintain scholarship' and to collect and administer trust Rinds and eadownsang fbr the uso and benefit of New Mexico Military laititat0 Alumni Associatice and to do generally any and all things which may be deterrod advisable, necessary or *limbic la the interest of the New Mexico Military Institute, its cadets, faculty, and alumni. In carrying out the objects and purposes for which the Corporation is Armed and without in any partlaslar mulcting or ladling any of the objects and powers of the Corporsdoe, h Is hereby expressly cloclind and provided that the Corporation shall bar) power to take, hold and acquire by paean, gila, devise or bequest, real and personal property of whatsoever kind, nature or description, and whomsoever the nine may be situated, and to use and occupy such part of its properties, real or personal, as may be atecsauy or proper for the thrtharanco of its oblool to 3c11 or citiscrwiso dispose of all or any portion of My real or personal property acquired by the Corporatioo; to invest end reinvest the Parch and properties of the Corporation, whether acquired by gill, devise, becinest, purchase, sale, ions, credits or otherwise, in any kind of property, real,
personal or mixed, and every kind of investment specifically Including, but not by way of

limitation, bonds, debentures, stocks, preened or common, oil, gas or other mineral interests, lands and notes; to mortgage, hypothecate, pledge, or otherwise encumber any or all dike assets of the Corporation, including real and personal property and the income thtuefrom, as security for the performance of any undonakIng or obligation of the Corporation; to mako and perform contracts of every kind and description; and generally in carrying on its business or for the purpose of attaining any

a its objects or purposes the Corporation shall have the power to sell, melange,

transfisr, convey, haw, mortgage, hypothecate, pledge or otherwise =umber and dispose of any or all of the property of the Corporation; to borrow money and to executo r deliver and issue notes and other obligations and to execute and deliver mortgages, deeds of trust and other instruments of pledger and hypothecation to secure the same; to receive, hold and administer troll finds and

endowments for the 4.303 and purposes of said Corporation; and to do and perform all other things and exorcise any and all other powers which a co-pattnership, or natural person coirld do sad exercise or whkh now or hereafter may be authorized by law.

ARTICLE IV
LIMITATIONS ON LIABILITY The Corporation shall ban no capital stock or power to issue capital stock and shaR be strictly 4 401PPIVEt OCelpOrat:41 devoted Mid:Dainty to carrying out the objects and purposes for which to Corporation Is ibrmod and the Corporation studl not afford pecuniary gain, incidentally or otherwise, to its members, and there shall be no liability for the indebtedness oldie Corporation on the part of any member thereof; provided, however, that nothing herein contained stall be construed as limiting the right of; person holding a contractual indebtedness agabnt the Corporation to reach be income as well as any other assets of the Corporation VI the payment thereof, The Corporation shall Indemnify the Directora and Officers as provided by sections 538-26 NMSA 1978 Comp.

ARTICLE V
DURATION The time for which this Corporation shall exist shall be pc-Tomei A1L1C1..E Vi ORIGINAL INCORPORATORS The names and addresses of the original Incorporators were: Tom Hall, Jr Charles F. Smith, Charles Martin, Ted Hunt and Sam W. Agee all of Roswell, Now Mexico. 6=0a( DIRECTORS The affairs of the Corporation shall be administered by a Board of Directors emsisting of not less dna three (3) nor more than fifbxn (15) members and the present Directors shall continue
3

tur

u Diroctors until their summon ere duly elocted and qualify as provided by tho By-Lows of be Corporation, The Board of Directors shall have power to adopt By-Laws to govern the affairs of the Corporation, A copy of the By-Laws of the Corporation shitll be Med in the Ofko albs Stab Corporation Commission, together with all arnoulmards thereof u provided by law.

ARTICL,E YR/
TAX EXEMPT STATUS Nowt uf the net =ming ' s of lho Corporation shall bum to the bentifit of or be distmlnited to its mambas, mimeos, officers or other private personas comp; that the Corporation shall be authorized and empowered to pay reasonable compensation for services modeled and to =ice payments and distributions to 6u1hermos of tho purposes act forth hi ArdcloJEl thereof, No substantial pan of the activities shall be the carrying on of propaganda, or otherwise attempting, to influences legislatiou, and the Corporation ohail not participate hi, or intervene in (facludIng the publishing or distaution of intermits) Any political cronpaign on behalf of any candidate for public o co, Notwithatanding any other provision of these utiotes, the CorPoralka Shall not awry on any other activity not permitted to be carried on (a) by a corporation except on Federal
111001110 Tax =ler nation 601 (oX3) of tho Iambi Revenue Code of the 1986 (or any arrandment

theteto) or (b) by a corporation, contributions Co which are deductible undo' section 176(0(2) of the, Internal Revenue Code of 1956 (or any amendment tlion;to).

AKIICLEIX
DISSOLUTION Upon the dissolution of the Corporation, the Board of Directon shall, after paying or making provisions for the payment of all of the liabilitiss or dm Corporation, dispose of all ofthc
eSSOU of the Corporation to the NEW MEXICO MILITARY INSTITUTE, Roswell, New MeXIOD, but should it cot be in existence upon dissolution, the Board of Directors shall dispose of

all of the useti of tho Corpdratlon exclusively for the purposes of tho Corporation in tech runner, Cr to such organization or organizations organized and panted exclusively for charitabk
cducational

purposes u shall at ON time quallBy u an exempt orpoisation or orlivitotims u .nd6I

sootier' 501(c)3) of the Internal Revenue Code of 1986 tor the corresponding provisien of any future United States bnornal Revenue Lair), as the Board of Directors shall domain*, My of such use% nx so di:paved of shall tic disposed of by the District Court of thaeounty in which the principal office of the Cceporatioo Is then located, exclusively fl, r such purposes or to such orianization or organizations, as said Court emit determine, which aro organized and Tatted exclusively fcs such purposes.

Articles of hoorposation of the NM Al ritiopted by the Board of Directors on the 1993. ATTEST:

R. Britton, Secretary

AMENDED BY-LAWS OF THE NMMI ALUMNI ASSOCIATION, INC. (A NON-PROFIT CORPORATION) ARTICLE I NAME AND LOCATION The name of the Corporation is "NMMI Alumni Association, Inc. a non-profit Corporation, hereinafter called the "Association," Its principal office in the State of New Mexico shall be located at the NEW Mexico Military Institute, 101 West College Boulevard, Roswell, NM 88201. ARTICLE MISSION AND PURPOSE The objects and purposes for which the NMMI Alumni Association, Inc. (Association) ex:sts are to support and promote the interest and welfare of New Mexico Military institute (NMMI). In connection with the foregoing, the Association shall provide direct support to NM MI wt enever

possible; afford a permanent means of contact between NMMI and its Alumni; create, establish and maintain scholarship for NMMI Cadets; and conduct any and all operations which may be
deemed advisable, necessary or desirable in the interest of promoting loyalty to NNIMI, its Cadets, Faculty and Alumni. PURPOSE The objects and purposes for which the Association is formed are as follow:

* To promote the interest and welfare of the NMI * To be the gateway that fosters lifelong connections between its Alumni and MINI
* To promote the distinctive values (duty, honor, achievement) of NMMI * To provide avenues for Alumni to interact with each other and with NMMI

* To help establish and maintain scholarships, in conjunction with the New Mexico
Military Institute Foundation, for deserving Cadets to attend NMMI * To operate in a manner that is connected with and is responsive to the positive needs of NMMI

ARTICLE III
MEMBERSHIP

Section 1. Classes of membership A. Regular Membership. Any former member of the Corps of Cadets is eligible for membe -ship providing he/she completed two semesters at NMTvti and pays the annual membership fee set by the Board of Directors of the Association.

EXHIBIT

B. Life Membership. Life Membership will be provided for by the payment of an amount as prescribed by the Board of Directors of the Association. Each life member shall be given a life membership certificate.

C. Honorary Life Membership. In recognition of their continued devotion and activity for the
betterment and welfare of NMMI or the NMMI Alumni Association, the rules and regulations concerning the nomination and election of persons to the classification of Honorary Life Member of the Association are set forth in the Policy and Procedures Manual of the Association by the Membership Committee of the Board of Directors of the Association. D, Patron Membership. Any supporter of the Association who contributes an amount equal to or greater than the amount established by the Board of Directors each year for annual membership. This class of membership gives the Patron member all the privileges of a Regular member except the right to vote or become a Board member. E. Donor Membership. Donation to the Annual Fund in an amount equal to or greater than the amount established by the Board of Directors of the Association for a Regular member will suffice as dues, entitling the eligible, i.e. completion of two semesters at NMM1, alumnus to the privileges of membership. Section 2. Voting At all meetings of the members of the Association, each member shall be entitled to one vote. Only members shall be entitled to vote and any member may attend the Annual meeting, or an other meeting of the members. The members may vote in person, by mail or electronically, on an app..oved ballot. In the third quarter of the calendar year, an absentee ballot listing candidates for DIrecto's of the Association will be sent to all members eligible to vote. The number of persons present in persol at any meeting of the Association which shall have been duly called, even though such number be less than a majority of the membership thereof, shall constitute a quorum for the transaction of all busines3 which may come before such meeting, provided, however, that there shall be In attendance at any such meeting a majority of the members of the Board of Directors of the Association. At all meetings Df the Association, a majority of members of the Association present shall control. Section 3. Annual Meeting of Members of the Association The annual meeting of the members of the Association shall be held at a time and place designated by the President of the Board of Directors of the Association during the annual Homecoming activities at NMMI. Notice of each annual meeting of the members of the Association shall be given by mailing or emailing notice thereof to each member as shown by the records of the Association, at least fifteen (15) days prior to the time designated for holding said meeting. The purpose of the annual meeting shall be the election of Directors and the transaction of such other business as may regularly come before the meeting. Section 4. Special Meetings of the Members of the Association Special meetings of the members of the Association may be called by the President, or the

Board of Directors, or twenty (20) percent of the members of the Association, by mailing or emailing
notice of such special meeting at least fifteen (15) days prior to the time for holding said meeting to

each member of the Association shown by the books and records of the Association to be in good standing.

ARTICLE IV MANAGEMENT

Section 1. Structure and General Powers The business affairs of the Association shall be managed by a Board of Directors. After Homecoming 2012, the voting Directors will be reduced to eleven (11) consisting of the followinx (i) nine (9) general member Directors consisting of five (5) in-state Directors and four (4) out-of-sta:e Directors ; (ii) one (1) Foundation Trustee; and one (1) NMMI Regent. Section 2. Tenure and Qualification of Directors A. Term. Directors shall be elected to three year terms, staggered in such a manner so that approximately one-third of the Directors terms will expire each year. B. Qualifications 1. Three continuous years as a donor/member of the Association or if a Life member (all payments for Life Membership must be completed at least three years prior to runn ng for the board). A record of some type of involvement In Association activities (local chapter particiption, recruiting, Trail Ride, Foundation, Board of Regents, etc.)

2.

C. Application and Election Process 1. Application by General Members. Members, both in-state and out-of-state, who wish to run for election to the Association's Board of Directors must submit the following by June 30 of the year in which they choose to run for election: (a) a letter of intent to run; (b) a resume; (c) a biography; (d) a digital color photo; (e) two recommendations or references from an active Association member; and (f) a statement of any prior criminal activity (a background security check, at the applicant's expense, may be requested). 2. Application by Foundation Trustee and NMMI Regent Members. Each of the NMMI Foundation, Inc. and the NMMI Board of Regents will submit to the Association by June 30 at least two pre-selected candidates from the Board of Trustees and the Board of Regents, respectively, for election by the Association's membership to Its 8oarc of Directors. Recognizing that each submitted candidate currentlyserving on either the NMMI Foundation, Inc. Board of Trustees or the NIVIMi Board of Regents will have already beer

properly vetted and investigated by their respective organizations, such candidates are not required to submit an Application as required by Article IV, Section C (1) above.

D. Vetting Process. It shall be the responsibility of the Association's Executive Director to compile all candidate applications as set forth above for consideration by the Board of Directors at the July Bcard meeting. Only applications that are 100% complete and submitted by June 30 of a given election year will be considered by the Board, The entire Board of Directors will review any negative information received along with any explanatory statements from the candidate which should accompany it. E. Election. In the third quarter of the calendar year, an absentee ballot listing candidates for election to the Board of Directors of the Association will be sent to all members eligible to vote. Electicn of such Directors shall take place at the annual meeting of the members of the Association.

F. Term Limits No Association Board member may serve more than six consecutive years on the Board. No Association Board member may serve as President for more than two consecutive years. F. Employment. A sitting Board member must wait at least one year from the time they vacate their boa -d seat before being considered eligible to be hired by the Association. G In-State or Out-of-State Alumni Association Candidate or Board Member Defined, 1, General-Member Candidate Declaration. A general-member candidate for the Association Board of Directors must declare their intent to run as an In-State or Out-of-State, candidate at the time of the submission of their application to run for the Board of Directors, Cnce a candidate declares a residency status, a candidate cannot change their status before the election polls close. The In-State or Out-of-State status of the Foundation and Regent candidates submitted by their respective organizations will not be taken into consideration for election to the Association's Board; as a result, the Foundation and Regent member candidates require no such declaration of status. 2. Residency Defined. Residency is determined by a majority of the following factors; the candidate's actual place of residence; home ownership; legal residence; actual place of employment; where the candidate pays taxes; registers their vehicles; has their driver's license; business license{s); voter registration; declaration of legal state of residence in one's will; etc. 3. Status Defined. An In-State candidate for the Alumni Board, Directors must reside Nithin the geographical limits of the State of New Mexico on the date of the election to the Alumni Association Board. An Out-of-State candidate for the Alumni Board of Directors must reside outside the geographical limits of the State of New Mexico on the date of election to the Alumni Association Board. 4. Change of status at the time of the election. If a candidate changes residency status after their declaration but before the election polls close, that candidate must immediately inform the Alumni Association Executive Director, and will be automatically disqualffed for that election. If at the time of election, a candidate does not meet the criterion of their declared status as an In-State or Out of State candidate, that candidate would be disqualified from taking office. In such a case, the Board would certify and swear in the next
-

highest vote count recipient of the category of the disqualified candidate. If no other candidate qualifies, the Board will not certify anyone for that seat. If the candidate ices not inform the Executive Director immediately of the change of status, or at all, they will automatically be disqualified for that election, and if discovered after the candidate is sworn in, they must resign the seat Immediately. Such a candidate will be permanently barred from running for the Board In the future. 5. Maintaining status upon election. Following a valid, certified election and oath of cffice as an In-State or Out-of-State Board member, that member must maintain their In-Sta:e or Out-of-State status throughout their elected term. if during a Board member's term of office, they switch from in-State to Out-of-State, or vice-versa, that candidate maintains their seat only until the next election (regardless of how much time remains on thei term) at which time they must re-run for the Board under the proper status. Section 3. Regular Meetings of the Board of Directors. A regular meeting of the Board of Directors shall be held during each quarter and notice thereof shall be given to each member of the Board. Section 4. Special Meetings of the Board of Directors. A. Special meetings of the Board of Directors may be called by or at the request of the President or any three (3) Directors. The person or persons authorized to call special meetings of the Board of Directors may fix the time and place for holding any special meeting of the Board of Directors called by them. B. The President may call for a telephone/teleconference or video conference meeting when the following conditions have been met. 1, Every Board member has been notified in an appropriate amount of time with the date of the meeting, time and the order of business to be stated with at least forty-eight (4E) hours notice. 2. A quorum of the Board is present. 3. All Board members are in a location/position where they can mutually debate the m3tter that constituted the meeting. (teleconference or video conference room). 4. Minutes must be taken by the Secretary or a designated individual. 5. A person will be recognized and gain the floor in the same manner as they would at any other normal meeting of the Board of Directors. All other typical meeting procedures will be
.

6.

followed. If a vote is taken on a matter then it must be ratified at the next Regular Board Meeting.

C. The President may, if he/she deems It an emergency, call for a telephone or e-mail vote on any issue. All Board members shall have twenty-four (24) hours from the time first called or e-mailed by the Secretary, to respond and cast their vote. Section 5, Quorum. A majority of the Board of Directors In person shall constitute a quorum for the transaction of

business at any meeting of the Board of Directors of the Association. The action of the majority of the Directors at a meeting at which a quorum is present shall be the action of the Board of Directors.

Section 6. Vacancies. Any vacancy occurring in the Board of Directors may be filled by a majority vote of the Directors at any regular meeting of the Board in one of the following manners; A. The Board will leave the vacancy or vacancies open until the next October election cf directors, and the person or persons receiving the next most votes after the primary seats have been filled would fill the vacancy or vacancies for the remainder of the term or terms. If more than one additional vacancy, they will be filled in order of most votes to longest terms, OR B. The Board will appoint a qualified alumnus to the vacancy (Qualified Alumnus must comply with the same requirements as any Alumnus desiring to run for the Board as outlined in Article IV, Section 2, B and C) to the vacancy or vacancies to serve until the next October election of directors, and vacancy or vacancies filled as stipulated in A, above, OR C. The Board will appoint a qualified alumnus to the vacancy or vacancies for the rema nder of the vacated Board member or members term (Qualified Alumnus must comply with the same requirements as any Alumnus desiring to run for the Board as outlined in Artict IV, Section 2, B and C), OR D. The Board will leave the position or positions vacant for a period of time no greater . :han the duration of the vacated Board member or member's term. Section 7. Absence from Meetings. Any Director, who, without reasonable cause, fails to attend two (2) consecutive regular meetings of the Board, may be removed by majority vote of the Directors and that Director position shall be declared vacant. Section 8. Miscellaneous. A. All Association Board Members must be Alumni. B. All Board members must sign a confidentiality statement as well as a code of conduct statement, as contained in the Policy and Procedures Manual, at the beginning of each board year. Violations of the code of conduct will be grounds for action by the Board and due process for such violations Is outlined In the Policy and Procedures Manual. C. Only the duly elected Board members of the Association will be eligible to serve as President. The Foundation Trustee and the NMMI Regent serving on the Board are not eligible to serve as the President of the Board of Directors of the Association. A Board member serving in his/her first year as a member of the Board of Directors of the Association may not serve as President. ARTICLE V OFFICERS Section 1. Number. The officers of the Association shall be the President, Vice President, and Treasurer.

Section Z. Election and Term of Office.

The officers of the Association shall be elected annually by the Board of Directors follow ng the completion of the Board of Directors Election process. The officers so elected shall serve at the pleasure of the Board of Directors. Vacancies may be filled or new offices created and filled at any meeting of the Board of Directors. Each officer shall hold office until his successor shall have been duly elected and qualified or until his death or resignation. Section 3. Vacancies of an Officer of the Board of Directors. A vacancy in any office because of death, resignation, disqualification, or otherwise will be addressed by majority vote of the Board of Directors. The Directors will select an existing duly elected Board member to fill any vacancy. The Regent member and the Foundation member are not elig ble to hold an officer position on the Board of Directors and may not be appointed or voted to fill the position. The procedure outlined in Article IV, Section 6 will be followed to fill the resulting vacancy.

Section 4. President. The President shall be the principal executive officer of the Association and shall in gene 'al supervise and control all of the business and affairs of the Association. He/she must have served for at least one previous year as a Director before becoming eligible to serve as the President. He/she shall preside at all meetings of the Association and of the Board of Directors, until his/her successor is elected. He/she may sign with the Secretary, or any other officer dulyauthorized by the Board of Directors, certificates, deeds, mortgages, bonds, contracts, or other instruments which the Board of Directors has authorized to be executed, and in general shall perform all duties incident to the office of President of the Board of Directors and such other duties as may be prescribed by the Board of Cfrectors from time to time, including the appointment of members of the standing committees as called for in Article VII of these Sy-laws, or other such committees as designated by the President or recommended by the Board of Directors. Section 5. Vice-President. In the absence of the President, the Vice President shall act and be empowered to perform all of the duties assigned to the President. Section 6. Treasurer. If required by the Board of Directors, the Treasurer shall give a fidelity bond for the faithful discharge of his/her duties in such form and with such surety or sureties as the Board of Directors shall determine. The cost of this bond shall be paid for by the Association. He/she shall: A. Have charge and custody of and be responsible for all funds and securities of the Association; receive and give receipts for gifts and monies due and payable to the Association from any source whatsoever, and deposit all such monies or securities in the name of the Association in such banks or other institutions as may be designated by :he Board of Directors; B. In general perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him/her by the President or by the Board of Directors; C. All disbursements written and signed by the Treasurer In excess of FIVE THOUSAND znd NO/100 DOLLARS ($5,000.00) shall be countersigned by the President, a duly appointed board member, or a former board member with the concurrence and approval of the Alumni Board of Directors.

Section 7. Executive Director The Executive Director, who is not an officer of the Association and is non-voting, shall he responsible for the duties and responsibilities of Secretary: A. Keep the minutes of the meetings of the members of the Association and of the Board of Directors; B. See that all notices are duly given in accordance with the provisions of these By-Lay. s; C. Be custodian of the corporate records and of the Seal of the Corporation; D. Keep a register of the post office address of each member of the Association; E. Follow the guidelines as set out in the current "MEMORANDUM OF AGREEMENT", it' any, by and between the New Mexico Military Institute and the New Mexico Military Institute Alumni Association, Inc.; and F. In general perform all duties incident to the office of the Secretary and such other duties as from time to time may be assigned to him/her by the President or by the Board of Directors.

Section 8. Residency. The offices of the President and the Vice-President shall be filled by either an in-state or out-ofstate member, but both positions may not be held by out-of-state members for the same term. f the President is not an in-state member, then the Vice-President may, in consultation with the Presi lent, perform such duties as are necessary in conducting the business affairs of the Association when the President is absent from the state of New Mexico. If action is taken by the Vice-President without prior consultation with the President, then the President shall be informed of such action as soon as conveniently possible. ARTICLE VI SEAL The Board of Directors shall provide a corporate seal which shall be in the form of a circia and shall have inscribed thereon the name of the Corporation and the words "Corporate Seal," ARTICLE VII COMMITTEES Section 1. Executive Committee. A, General, There shall be an Executive Committee of the Board of Directors, which shall consist of the President, vice-President, Treasurer and the Immediate Past President of the Association, The President may include other members of the board at his/her discretion. The Executive Director will serve on the committee as an ex-officio member. The Exe cutive committee shall meet at the call of the President. B. Purpose. The powers of the Executive Committee shall be limited to those decisions necessitated by circumstances when it is not feasible to call a meeting of the Board of Directors. The Executive Committee shall keep the Superintendent and the Board of Regents of NivIMI advised as to the actions and general feeling of the Association on a contin basis. Minutes of the meetings of the Executive Committee will be kept and provided to the Board at the earliest time possible, but not later than the next quarterly meeting.

Section 2. Standing Committees. The President shall appoint a chairman and members of the following standing committns: A. NMMI Alumni Hall of Fame Committee. The NMMI Alumni Hall of Fame Committee shall receive all nominations for the NNIMI Alumni Hall of Fame, consider such nominations, and determine which of the recommendations should be recommended to the Board of Directors of the Association for approval or disapproval. B. Honorary Lifetime Membership. The NMMI Alumni Membership Committee in consonance with the Hail of Fame Committee will also consider nominations for the Honorary Life Member of the Association status to determine which of the nominations should be forwarded to the Board of Directors of the Association for approval. C. Membership Committee, The Membership committee shall be responsible for maintaining and increasing members of the Association, consider nominations for Honorary Lifetime Membership and forward it's recommendations to the Board of Directors for approval. D. Finance Committee. The Finance Committee shall be responsible for oversight and management of the Association's investment a nd financial requirements. It shall be chaired by the Treasurer. Section 3. Other Committees. The President shall appoint a chairman and members of any special committees with the purpose and length of service deemed necessary by the Board of Directors, The President may a so appoint, at his/her sole discretion, "Ad-Hoc" committees for special purposes which he/she feel!: necessary. Section 4. Committee Assignments. The President will appoint the members to the specific committees. Each Board member may request any specific committee assignment they desire. Any Director may serve on any committee in addition to the assigned committees so long as it does not interfere with their work on assigned committees, Section 5, Ex-officio Members of Committees. The President may appoint any member of the Alumni Association to serve as an ex-officio member of any committee of the Board, ARTICLE VIII FINANCIAL MANAGEMENT Section 1. Annual Audit. An Annual audit of the books and affairs of the Association shall be made by an established and recognized certified public accountant as set out in the Memorandum of Agreement between the Association and the Institute. The auditor shall be reviewed for change every three (3) years,

Section 2. Fiscal Year.

The fiscal year of the Association shall commence on July 1 and shall terminate on June 30 of each year. ARTICLE IX INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 1. Indemnification, The Corporation shall indemnify, to the full extent then permitted by applicable law, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a Director, Officer, Employee, or Agent of the Corporation; provided, however, that the Corporation shall indemnify any such agent (as opposed to any Director, Officer, or Employee) of the Corporation to an extent greater than that required by statute only if and to the extent that the Board of Directors may, in its discretion, so determine. Section 2. Other indemnification Provisions. The rights of indemnification provided by this Article (1) shall not be deemed exclusive of, or to In any way limit, any other rights to which any person who may be indemnified hereunder may be entitled; (2) shall continue as to a person who has ceased to be a Director, Officer, Employee or Agent; ar d (3) shall inure to the benefit of such person's heirs and legal representatives. Section 3. Insurance. The Corporation, by authorization of the Board of Directors, may purchase and maintain insurance on behalf of any person who is or was a Director, Officer, Employee or Agent of the Corporation, or who is or was serving at the request of the Corporation as a Director, Officer, Employee or Agent for any other Corporation, domestic or foreign, non-profit or for profit, partnership, joint venture, trust or other enterprise, against him and his status as such, whether or not the Corporation would have the power to indemnify him against such liability under this Article. Section 4. Advancement of Funds. The Board of Directors, whether a disinterested quorum exists or not, may advance to any individual who may be entitled to indemnification under this Article an amount sufficient to pay expenses incurred by such individual with respect to any claim, action, suit or proceeding listed in Section 1. Before the Corporation may make such an advance, however, the individual who Is to receive the advance must agree, in signed writing, to repay the Corporation the amount advanced the amount of indemnircatIon, if any, which the Board of Directors ultimately authorized to be paid to said individual. Section 5. Nepotism. Board members and members of their Immediate family may not be employed by the Association. Members of the immediate family of the Executive Director may not be employed by the Association. The term "immediate family" is defined as: husband and wife, father and mother, son and daughter, brother and sister,

Section 6. Validity. If any provisions or portions thereof of this Article shall be found, in any action, suit or proceeding, to be invalid or ineffective, the validity and effect of the remaining portions shall not be

ARTICLE X DISSOLUTION Upon the dissolution of the Corporation, the Board of Directors shall, after paying or making provision for the payment of all of the liabilities of the Corporation, dispose of all of the Corporation asset:;, to such organization or organizations organized and operated exclusively for charitable, educational, religious, or scientific purposes as shall at the time qualify as an exempt organization or organizations under Sec. 501(c)3 of the Internal Revenue Code of 1954 (or the corresponding provision of any 'uture United States Internal Revenue Law), as the Board of Directors shall determine, Any such assets lot so disposed of by the Directors in connection with the dissolution of the Corporation shall be dispmed of by the District Court of the county in which the principal office of the Corporation is then1ocatec, exclusively for such purposes or to such organization or organizations, as said Court shall determine, which are organized and operated exclusively for such purposes.

ARTICLE XI AMENDMENTS The By-Laws may be altered, amended or repealed and new By-Laws may be adopted at any revlar meeting of the Board of Directors of the Association or at any special meeting of the Board of Directors, by a majority vote of the Directors at the meeting. Written notice of any changes must be mailed or emailed to the Directors at least fifteen (15) days prior to any scheduled or special meeting where alterations, a dments or repeal and adoption of new By-Laws will take place.

Executive Director

MEMORANDUM OF AGREEMENT
THIS MEMORANDUM OF AGREEMENT (M0A) is made by and between NEW MEXICO MILITARY INSTITUTE and the NEW MEXICO MILITARY INSTITUTE ALUMNI ASSOCIATION, INC. Article I Definitions and Recitals 1.1 Definitions: As used in this Agreement, each of thc following terms shall have the respective meanings set forth in this paragraph. (a) "Alliance Agreement" shall mean the Third Amended Alliance Agreement, dated July 1, 2009, between the Association, Foundation, and the Board of Regents, and any subsequent revisions or amendments to such Agreement. (h) "Alumni" shall mean airy student that has graduated from either or both the high school and the junior college or who has completed one full year of attendance at the Institute. (c) "Articles" shall mean the Articles of Incorporation of the Association. (d) "Association" shall mean the New Mexico Military Institute Alumni Association,

(c) "Board of Directors" shall mean the Board of Directors of the Association. (1) "Board of Regents" shall Mean the Board of Regents Hie Institute.. (g) "Bylaws" shall mean the Bylaws of the Association. (h) "Chief of Staff' shall mean the person holding the office of Chief of Stall - for the Institute. (i) "Database" shall mean a repository of information identifying the Alumni of the Institute. (j) "Executive Secretary" shall mean the person holding the office of Executive Secretary of the Association. (k) "Foundation" shall mean New Mexico Military Institute Foundation, Inc. (I) "Institute" shall mean New Mexico Military Institute. (m)"Policy Manual" shall mean the policy manual atilt Association adopted by its Board of Directors. (n) "See. 501 (c) (3)" shall mean Section 504 (c) (3) of the Internal Revenue Code. (o) "Superintendent" shall mean the- Superintendent of the Institute.

follows:

E2 Recitals: The facts and circui sumees giving rise of this Agreement are as

(a) The Institute is a designated State Educational Institution under Sccticm 11 of Article XII oldie Constitution of New Mexico. (b) The Association is a nonprofit corporation organized and existing under the laws of the State of New Mexico. (c) The primary purpose of the Association is: (I) To promote the interest and welfare of the New Mexico Military institute (2) To he the gateway that fosters lifelong connections between its alumni and New Mexico Military Institute (3) To promote the distiuctive values (duty, honor, achievement) of New Mexico Military Institute (4) To provide avenues for alumni to interaet with each other and with the New Mexico Military Institute (5) To help establish and maintain scholarships, in conjunction with the New Mexico Military institute Foundation, for deserving cadets to attend New Mexico Military Institute (6) To operate in a mariner that is connected with and is responsive to the positive needs of Nev Mexico Military Institute (d) The Institute recognizes that the Association is a separate corporate entity. (e) The Institute and the Association each desire to enter into this Agreement, to be in compliance with NM Statute (i-5AL, and to more clearly define their working relationship and undertakings with respect to each other.

Article II. Undertakings of the Association 2,1 Affirmative Covenants: The Association agrees that, unless the Institute shall have otherwise consented in writing, during the term of this Agreement the Association will: (a) Maintain its existence as an exempt organization under Section 501 (c) (3). (h) Conduct its business according to the Articles, Bylaws and Policy Manual so long as such conduct is not inconsistent with the provisions of this MOA. (c) Abide by the terms and provisions of the Alliance Agreement, including, but not limited to, those sections and provisions regarding fundraising. (d) Maintain the composition of the membership of the Board of Directors in accordance with the Bylaws, unless it is determined that such composition would jeopardize the Association's status as an exempt organization under Section 501 (c) (3). (e) Employ as Executive Secretary a person selected by the Board of Directors, in conjunction with the Institute through the Board of Regents representative on the Alumni Board. (I) Organize its staff and retain such advisory and other professional services as it deems necessary to perfOrrn its primary purpose as stated in paragraph 1.2 (c), hereof. (g) Operating in connection with the Institute, serve as thc primary records repositor) , and single point of information relating to Alumni of the Institute. Such information shall be inemporated by the Association into a Database with accessibility for constant use by all authorized parties. In fulfilling these functions, the Association will update and maintain the information relating to the Institute's Alumni, on behalf of the Institute. It is fully understood by the Association and the Institute that the Database developed and maintained as a result of combining information related to cadet attendance at the Institute with information gathered by the Association relative to a former cadet's alumni status shall become the property of the Insti lute. (1) Information to be shared and incorporated into the Database shall include: a. the Alumnus' record of attendance at the Institute; b. that generated by subsequent contacts between an Alumnus and the Association. Intbrmation regarding an Alumnus made available to the institute or the Foundation will be provided to the Association for incorporation, as necessary, into the Database. c. that relating to donations by an Alumnus to the Association, and d. that relating to the life-time achievements of the Alumni of the Institute. (2) The information contained in the Database shall be easily retrievable and capable of generating lists, including mailing lists in the followingprimary categories: a. All dual (high school and junior college) graduates of the institute. b. Al] high school graduates. C. All junior college graduates. 3

d. All other categories of Alumni, to include Patrons and Friends. (3) The Database will be accessible by and available at all times to the Institute and the Foundation. (11) Operating in coordination with the Institute, produce and distribute to Alumni and Patrons, the following publications on a frequency basis as indicated: (1) Sally Port -- a magazine publication distributed on a quarterly basis to all current members of the Association and to all high school graduates and junior college graduates, whether or not members of the Association. The quarterly distribution will occur during the following months after the beginning of the Institute's academic year: October, January, 'April, and July. (2) Monthly c-news teller-- to all Alumni and Patrons no later than the 5s, working day of each month. (i) Operating in conjunction wiM the Institute, manage the Institutes Alumni 1-tall of Fame. Management shall include the nomination of potential inductees, in accordance with the criteria adopted by the Association and the Insulate. The nominations, with supporting documentation, will be forwarded by the Hall of Fame Committee of the Alumni Association to the Hall of Fame Committee of the Board of Regents through the Board. of Regents representative on the Alumni Board no later Man 60 days prior to the beginning of thc Homecoming activities. The final selection of those to be inducted into the Institute's Alumni Hall of Fame will be a coordinated effOrt made between the Alumni Association 13oard of Directors and The Institute. (j) Operating in connection with the Institute, plan and execute the annual Alumni Homecoming activities. The Institute shall have supervisory authority over the planning and execution of the overall event. The Association will use the Database to invite all Alumni to return to the Institute for Homecoming. (1c)Obtain and maintain such insurance and fidelity bonds as the Board of Directors may determine are appropriate to enable the Association to maintain its 501 (c) (3) status and to comply with the provisions of this agreement. (I) Maintain a financial accounting system considered adequate under customarily and currently accepted governmental accounting standards, or such other standards as may be required by law, in staff coordination with the Institute and its internal and external auditors. (m) Cause its financial operations to be audited annually in accordance with generally accepted governmental auditing standards by an independent professional auditor approved by the Institute. The Institute and the FOLUIdation are required by New Mexico statute to utilize, the same independent auditor for their annual audits. Although not required by statute, the Instimic and Foundation recommend that the Association utilize the sante audit firm. (n) Cause a copy of the annual audit, conducted in accordance with Article 2.1 (p), hereof, to be furnished to the Institute, with the understanding that such audit, exclusive of the names of Association donors and the amount of any donations, shall be a public record. The Association will maintain the working papers associated with such audit available for review by the Institute, upon its written request, for a period offline years post audit report date. Under no circumstances will the addresses or other personal information relative to Association donors, or the amount of their donations, become a matter of public 4 record.

Article ii 'Undertakings of "flic Institute 3.1 Affirmative Covenants: hi furtherance of the purpose of this Agreement and in consideration of the above described services and undertakings to he provided and performed by the Association, the Institute agrees that, during the term of this Agreement, it will: (a) Provide for the Association's use office and meeting space, together with the necessary utilities, repairs, property insurance (but not contents insurance), and maintenance and janitorial support services. (b) Recognize the Association as the Alumni Association for the Institute, and assist the Association to accomplish its mission by: (I) Providing to the Association Cadet attendance infomiation, as required; and (2) Providing to the Association any updated addresses, telephone numbers, or other information about a former Cadet which the Institute may receive; to be thereafter maintained and updated by the Association on behalf of the Institute. (c) With prior written approval, permit the Association to use, in connection with its activities in support of thc Institute, the -name "New Mexico Military institute," as well as other trademarks or logos of the Institute, so long as such use does not interfere with or conflict with existing agreements in place between the Institute and the Cadet Store. (d) Include the Executive Secretary, as a representative of the Board of Directors, in such staff meetings as may be necessary to insure a-frank exchange of information and ideas between the Association and the Institute. (e) Work with the Association, to ensure that the Homecoming event is the premier Alumni event during the academic year whose purpose is to encourage and maintain stronger ties between the Institute and its Alumni. The Institute and the Association will work together to coordinate Cadet affairs, responsibilities, and activities with the overall Homecoming activities,

(f) Coordinate all requests for the disbursement of thruls from the Association to the Institute through the Superintendent, or his designee, and assume total-responsibility for and hold harmless and indemnify the Association with respect to the proper application and use of funds disbursed to the Institute upon the request of the Superintendent, or his designee.

Article IV Miscellaneous 4.1 Approval of Documents: The Institute acknowledges that it has received and reviewed copies of the Articles and Bylaws and has found them acceptable. The Association agrees to provide the Institute any proposed amendments to or revisions of the Articles or Bylaws for consideration and comment through the Board of Regents representative on the Alumni Board.

4.2 Public Funds and Property: Except to the extent any specific conditions of the transfer provide otherwise, any funds or property transferred to the Institute by the Association shall be considered subject to all state laws and regulations governing the disbursement and administration of public funds and public property. 4.3 Status of Association: The institute and the Association recognize the desirability of maintaining a close working relationship. The Superintendent shall he responsible for coordinating communication 'between the Institute, the Foundation, the Association, and any other Institute offices or affiliated organizations, with regard to the development and implementation of all activities and projects through whioh. the Association alone, or in conjunction with the Foundation, can assist the Institute in achieving its goals anti objectives. 4.4 Notices: All notices required, or permitted to be given by this Agreement, shall be deemed to have been duly given when in writing and personally delivered to the President/Superintendent, in the case ofthe Institute, and to the Executive Secretary, in the case of the Association, or When mailed, first class postage prepaid, and the rest of the party to receive such notice as fellows: To Institute: President/Superintendent New Mexico Military Institute 101 West College Boulevard Roswell, New Mexico 88201-5173 To Association: Executive Secretary New Mexico Military Institute Alumni Association, inc. 101 West College Boulevard Roswell, New Mexico 88201

4.5 Term and Termination: This Agreement may be in force and effect upon execution hereof by the Institute and the Association, and may be 'terminated by either party effective upon written notice to the other party at least sixty (60) days in advance thereof: A singular period for cure (per contract breach) of thirty (30) days is understood by all parties to this agreement. The 30 day cure period will be considered as part of the 60 day termination period. Upon termination, the Association will no longer be provided working space or services as outlined in 3.1 (a), hereof, and will be required to move off premises at the end of the sixty (60) day notification period. In addition, all provisions of Section 3.1 (c), hereof, will be terminated and the Association will no longer he permitted to use the name "New Mexico Military Institute" in its corporate title or he permitted to use any of the Institute's intellectual property rights, to include trademarks, logos, and service marks. -Any items bearing the Institute's trademarks, logos, or service marks will be purchased by the Institute at the Association's cost- Immediately upon notification of the termination by either party, access to the Database by the Association shall be terminated. 6

4.6 Effect: Nothing in this Agreement shall be construed as subjecting the Association to the provisions of the Open Meetings Act or making its records (other than the annual audit referred to in paragraph 2.1 (p), public records within the purview of Sections 14-2-1 through 14-2-3 NMSA (1978). EXECUTED on behalf of each party as of the date indicated below: NEW MEXICO MILITARY INSTITUTE, ATTEST By 47) Date
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NEW EXICO MILITARY INSTITUTE

ROSWELL, NEW MEXICO 813201

21 February 2013

THRU: Mr. James D. Lowe Executive Director, New Mexico Military Institute Alumni Association 101 West College Blvd Roswell, NM 88201 TO: Mr. A. D. Brownfield, Jr. President NMMI Alumni Association Board of Directors 101 West College Blvd Roswell, NM 88201

Dear Mr. Brownfield: New Mexico Military Institute and the New Mexico Military Institute Alumni Association have entered into a series of Memorandums of Agreement (MOA), the latest, duly executed 3/30/12, designed to continue the relationship between the two entities under the facts and circumstances outlined in the agreement. The latest MOA more clearly defines the working relationship and understandings of the parties with respect to each other and was Implemented to be In compliance with NM Statute 6-5A-1: Definitions; requirements for governmental entities that receive funds or property from certain organizations. The Alumni Association was to maintain affirmatively a financial accounting system considered adequate under customarily and currently accepted governmental accounting standards as required by Article II, Section 2.1(l) of the MOA and cause a copy of the annual audit to be furnished to the Institute as a public record as required by section 2,1(n). These actions were to be timely and designed to ensure the financial viability and ongoing ability of the Alumni Association to meet their financial obligations. Failure on the part of the Alumni Association to comply with the affirmative covenants of the MOA places the relationship in jeopardy and impacts the development and implementation of any and all of the positive activities and projects occurring at the Institute which the Alumni Association, alone or in conjunction with the Foundation, was intended to support. Further, in accordance with Article II, Section 2.1 (c), the Alumni Association was to abide affirmatively by the terms and provisions of the Alliance Agreement including, but not limited to, those sections and provisions regarding fundraising. Consequently, the Institute seeks to terminate the MOA in accordance with section 4.5. This dated correspondence is to serve as the requisite 60 days written notice of termination and the specified 30 day period for cure. The Executive Committee of the Board of Directors of the NMMI Alumni Association have been informed by the Institute of the shortcomings and have been provided with numerous examples of

financial irregularities or questions. Further, the Institute has provided the Association more than adequate time to correct or cure the concerns prior to proceeding with this Notice of Termination. NMMI seeks to work in harmony with our Alumni and will endeavor to insure that communication and information about their school will not only continue in the future through the efforts of the NMMI Dispatches but will be amplified by the use of emails and other communication means.

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FOURTH AMplogr), ALLIANCE AGREEMENT

This Alliance Agreement (the "Alliance Agreement") is made and entered into by and between the New Mexico Military Institute, a New Mexico educational institution duly organized pursuant to Section II of Article XII of the Constitution of the State of New Mexico ("NMMI"), acting by and through its Board of Regents (the "Regents'); the New Mexico Military Institute Alumni Association, Inc., a New Mexico not-for-profit corporation (the "Association), acting by and through its Board of Directors (the "Directors"); and the New Mexico Military Institute Foundation, Inc., a New Mexico not-for-profit corporation (the "Foundation), acting by and through its Board of Trustees (the "Trustees"); effective for all purposes as of July 1, 2012. N/vIMI is an educational institution designated pursuant to the Constitution and laws of the State of New Mexico, with its educational facilities and campus in Roswell, Chaves County, New Mexico. NMMI exists to educate train, and prepare young men and women to be leaders capable of critical thinking and sound analysis, lenders who possess uncompromising character, and leaders able to meet challenging physical demands. The Regents are responsible for establishing policy and supervising NMMI's compliance with this policy by the Superintendent and his staff. The Association is a New Mexico not-for-profit corporation operating pursuant to the terms and provisions of its Articles of Incorporation, By-Laws and a Memorandum of Agreement dated March 30, 2012, by and between NMMI and the Association (the "Association MOA"). The primary purposes of the Association are: (1) To promote the interest and welfare of NM MI; (2) To be the gateway that fosters lifelong connections between its alumni and NMM1; (3) To promote the distinctive values (duty, honor, achievement) of NMMI; (4) To provide avenues for alumni to interact with each other and with NMMI; (5) To help establish and maintain scholarships, in conjunction with the Foundation, for deserving cadets to attend NMMI; and (6) To operate in a matter that is connected with and responsive to the positive needs of NMMI, The Foundation is a New Mexico not-for-profit corporation operating exclusively for the benefit of NMMI pursuant to the terms and Fourth Amended Alliance AgreementPage I

provisions of its Articles of Incorporation, By-Laws, and a Memorandum of Agreement dated July 6, 2012, by and between NMMI and the Foundation (the "Foundation MOA"), The Foundation's primary purpose is to obtain, retain and invest donations from private individuals and entities for the exclusive use and beneftt of NMMI, The Foundation operates through its Board of Trustees in accordance with the terms and provisions of its articles of incorporation and by-laws, and as specified by the Foundation MOA, NMIvII, the Foundation and the Association originally entered into an alliance, effective July 1, 1994, for fund raising purposes, so that future fund raising efforts by any of them would be centrally coordinated with a goal of maximizing support for NMMI programs and projects while providing adequate funds for operation of the Association and the Foundation and minimizing fundraising expenditures. The parties continue to believe that such an alliance is in the best interests of all parties and that the alliance originally established in 1994 should be continued and enhanced as set forth herein, In consideration of the agreements set forth herein, the parties to this Alliance Agreement ag-ree as follows:
ARTICLE 1 CONTINUATION OF THE ALLIANCE

the Association and the Alliance Continued. NMMI, 1.1 Foundation hereby agree to continue the alliance between them (the 'Alliance') to coordinate and maximize the effectiveness of all future fundraising efforts on behalf of NMMI, the Foundation and the Association. The Alliance is not a separate entity Nature of the Alliance. 1.2 for tax purposes, nor shall it be deemed to be a partnership or joint venture of any kind, Rather, the Alliance of NMMI, the Foundation and the Association is a mutual agreement between them governing several aspects of the relationships between the parties to this Allisnce Agreement, including without limitation fundraising activities and general matters requiring cooperation between the parties, The parties to the Alliance are the Parties to the Alliance. 1.3 Foundation, the Association and NMM1, No additional parties may be admitted to the Alliance without the express written consent and agreement of each of the Foundation, the Association and MIMI,
Fourth Amended Alliance AgreementPage 2

ARTICLE 2 FUNCTION OF THE ALLIANcE 2.1 Coordin I. of IN. in orts. The Alliance is intended to coordinate, enhance and maximize the results of all fund raising efforts which may be undertaken by NMMl, the Association or the Foundation, with the primary goal of maximizing the support to NMM1 programs and projects, while still providing adequate funding of necessary expenses of the Association and Foundation. The parties agree to share and provide mutual access to any database, giving history, and any other information relevant to fundraising efforts which are in the possession or control of a party to this Agreement, and to cooperate with and provide reasonable assistance to one another in the use of such information to further the purposes of this Agreement. 2.2 Mutual Benefit of Fund Raising Efforts. AU fund raising operations conducted by the Alliance shall benefit NMM1, the Association and the Foundation in accordance with the terms of this Alliance Agreement. 2.3 Coordination and Cooperation in other Apia. While the primary purpose of the Alliance is directed at fundraising efforts, it is the intent of this agreement that the Alliance will also assist in coordination of efforts and cooperation between the parties hereto in any other respects where the Alliance can assist and facilitate cooperation between the parties. In order to improve Reciprocal Board Representatives. 2.4 cooperation and communication between the Association, the Foundation, and NMM1 it is agreed that. the Association may appoint one person as a voting member of the Board of Trustees of the Foundation, the Foundation may nominate two persons as candidates for election to a "Foundation representative position" for election by the Alumni as a voting member to of the Board of Directors of the Association, arid the Board of Regents may nominate two persons as candidates for election to a "Regent representative position" for election by the Alumni as a voting member of the Board of Directors of the Association, and the Board of Regents shall appoint two current regents and one additional person who is not a current regent as voting members of the Board of Trustees of the Foundation. Each organization may adopt its own policies and procedures for nominating for election or appointing such individuals to the other boards, provided, however, that any individuals nominated as Fourth Amended Alliance AgreementPage 3

Foundation or Regent Representatives to the Board of Directors of the Association must be alumni or honorary alumni of NMMI and members of the Association. The Association and Foundation, respectively, agree to adopt necessary By-Law changes, if any, to implement this provision as soon as possible following the adoption of this Agreement. ARTICLE 3 THE ALLIANCE COMMITTEE 3.1 Creation of Alliance Committee. The Association, NMMI and the Foundation hereby create thc Alliance Committee to serve as the governing body of the Alliance. The Alliance Committee shall consist of the following persons: A. the President of the NMMI Board of Regents; B. C. the President of the NMMI Alumni Association; the Chairman of the Board of the Foundation; and

D. the Superintendent of NMMI, who shall be a non-voting ex officio member of the Alliance Committee. The person from time to time holding any of the offices described above in the Foundation, the Association or NMMI shall automatically become a member of the Alliance Committee, and serve as such so long as the person continues to hold the particular office. Such person's successor in office shall automatically become a member of the Alliance Committee. The Alliance Committee Purpose tg the All4ncp Committee. 3,2 is intended to provide overall policy direction for the fund raising efforts of the Alliance, The Alliance Committee is not intended to provide clayto-day supervision of fund raising operations or to be responsible for the conduct of fund raising operations on an operational basis; rather, it is intended to review and provide direction for overall plans, strategies and approaches relating to fund raising, The Alliance Committee shall operate as the board of directors of the Alliance. Alliance Committee Meetings. The Alliance Committee shall 3.3 meet at least two times per year. To the maximum extent possible, meetings shall be scheduled concurrently with otherwise scheduled meetings of the Trustees and the Directors, Additional meetings may he called by any two of the following: the Superintendent, the President of the Board of Regents, the Chairman of the Foundation, or the President Fourth Amended Alliance AgreementPage 4

of the Association. Unless an emergency exists, ten days written notice shall be given to all members of the Alliance Committee of any meeting of the committee. Notice may be delivered by physical delivery, U.S. Mail addressed to the office of each organization, or email to all parties.

Meetings shall be held at such locations as may be determined to be

most appropriate by the Alliance Committee.

3.4 Operation of the Alliance ,Committee. The President of the Board of Regents shall serve as the Chairman of the Alliance Committee. The Chair shall designate an appropriate person to take minutes of' the discussions and actions of the Alliance Committee meetings. The Committee shall conduct its meetings pursuant to an agenda adopted by the Alliance Committee members and a proposed agenda shall be furnished to the members of the Committee with the call of each meeting, 3.5 Member Partl I on via Telco f A member of the Alliance Committee may participate in a meeting by means of a conference telephone, internet, or other similar communications equipment when it is otherwise difficult or impossible for the member to attend the meeting in person. Provided, however, that the Chairman must be physically present at the meeting unless it B a meeting where all parties are attending by electronic communication. If the normally designated Chairman is attending by electronic means and others are physically present at the meeting, he or she will designate a member physically present at the meeting to chair the meeting. h Vote. All actions of the c 1. at omm t 3.6 Alliance Committee at a meeting shall be taken after a vote of the committee members, to be cast by the President of the Board of Regents, the Association President, and the Foundation Chairman, or their duly authorized representatives, respectively. All actions shall be taken based upon a majority vote, g.rrit :ten ouj_l_. ajComegitee_Acttmwlthqut aMeettiasbyibipim The Alliance Committee may take any action which could be Consent. taken at a meeting with all members present by unanimous written consent or approval of the voting members. Such consent or approval may be given by email to the other members of the committee or by any other written communication transmitted to the other members of the committee, whether transmitted by electronic or other means, 3.8 Quorum and _Pfoxles. The quorum for action by the Alliance Committee shall be two voting members present, either in person, via teleconferencing, or through representation. Representation shall be permitted, as follows:
Fourth Amended Alliance AgreementPage 5

A.

If the President of the Board of Regents is unable to attend any meeting, the President may appoint any other member of the Board of Regents as their representative to serve in his place at that committee meeting; If the Chairman of the Board of the Foundation is unab;.e to attend, the President of the Foundation may appoint a member of the Board of Trustees of the Foundation as the representative to serve at that committee meeting; and If the President of the Association is unable to attend, the President of the Association may appoint a member of the Board of Directors of the Association as the representative to serve at that meeting; and

B.

C.

D. If the Superintendent is unable to attend, the Superintendent may appoint a member of the NMMT staff to serve as the representative at that committee meeting. Any member of the Board of Regents, the Board of Trustees of the Foundation, or the Board of Directors of the Association so appointed as representatives may vote and exercise all other rights, and shall be subject to all of the duties of, the member of the Alliance Committee they are representing. The parties intend that the members actually attend all meetings of the Alliance Committee, and others shall attend as their representatives only in unavoidable circumstances, No other form of proxy voting will be allowed at an Alliance Committee meeting. It is the intent of this Agreement that actions by the Alliance Committee shall be taken at meetings where all three voting members arc present if possible. However, if a voting member of the Alliance Committee fails or refuses to participate in a meeting or designate a substitute representative as provided herein, after notice in accordance with this Agreement, the remaining two voting members of the Alliance Committee are authorized to take action on behalf of the Alliance Committee. 171 ate R s onsibitit for Fund Raisin The day to day 3.9 responsibility for fund raising strategies, designs, implementation and coordination rests with the Foundation Director of Development, working together with the Development Committee under guidelines approved by the Alliance Committee. The Regents shall be ultimately responsible for determining WM' policy concerning fundraising and in particular restrictions and/or conditions on gifts or requirements for the receipt of gifts to NMMI,

Fourth Amended Alliance AgreementPage 6

ARTICLE 4

DEVELOPMENT COMMITTEE Creation of Development Committee. The Foundation, NMMI and the Association hereby create the Development Committee, consisting of the Chief of Staff of NMMI, the Executive Secretary of the Association, the President of the Foundation, and the Foundation Director of Development. The Chairman of the Development Committee shall be the Foundation Director of Development.
4.2 Duty of Development Committee, The Development Comm:nee is charged with the implementation of fund raising programs approved by the Alliance Committee. This will include obtaining the necessary resources and staff, supervision of the staff, and reporting to the Alliance Committee. 4 .3 Development Committee Meetings. The Development Committee shall have such meetings as the members determine are necessary and appropriate. The Foundation Director of Development shall provide the agenda for Development Committee Meetings.
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4.1

4.4 Quorum and Proxies. The quorum for action by the Development Committee shall be at least 75% of its members present in person or by telephone. If a member of the Development Committee cannot attend a meeting, he or she may not designate another person to attend in his or her place. Provided, however, if the NMMI Chief of Staff chooses to designate another member of the NMM1 staff as the NMM1 representative to the committee, such substitution shall be permitted.

Development Committee Guidelines. The Development 4.5 Committee shall adopt such guidelines for its meetings as it deems appropriate.
ARTICLE 5

wyjmi ANNUAL FUND

The Alliance Establishrgent of the NMMI Annual Fund. 5,1 shall conduct and manage the NMMI Annual Fund (the "Fund" or 'Annual Fund") in accordance with this Agreement. During the term of the Alliance, the members of the Alliance will not conduct any general annual fund drive, or other fundraising activity, unless such activity is approved by the Alliance Committee, The naming of the Annual Fund shall be in the discretion of the Alliance Committee, and may include the

Fourth Amended Alliance AgreementPage 7

Sally Port Fund as the name of the entire annual fund or as a subsidiary fund for the benefit of the Association.

5.2 Solicitation of Annual kland Donations. The Alliance and its members shall solicit annual fund donations to the NMMI Annual Fund at such times, and in such manner, as are approved by the Alliance Committee, in consultation with the Development Committee, A minimum of one solicitation per year shall be made for the NMM1 Annual Fund. 5.3 Definition of NMMI Annual F nd Contributiogs, NMMI Annual Fund contributions shall include all unrestricted funds given to parties to the Alliance, that are not designated for an endowment or ether specific purpose. Membership fees, other than life memberships, but including existing pledges, shall be considered Annual Fund contributions, but shall be retained by the Association, Unrestricted gifts which are testamentary bequests, insurance proceeds or gifts pursuant to trusts or other estate planning instruments shall not be considered Annual Fund contributions, Annual Fund contributions shall be apportioned to purposes approved by the Alliance Committee from year to year as provided in this Agreement and disc!osed to donors as part of the Annual Fund campaign. 5.4 Use _of NMMI Annual Fund Contributions, All NMMI Annual Fund contributions for a given fiscal year shall be receipted and recorded (in a separate general ledger account) by the organizations receiving such funds. Annual Fund donations recorded and receipted by the Association, other than membership fees, will be paid over to the Foundation, which will treat such funds as restricted funds to be administered pursuant to the terms of this Agreement, Annual Fund receipts, net of direct costs described below, will be used by the Alliance as unrestricted funds to be distributed as follows:
A. The direct costs of the solicitation of the Annual Fund, including payment of the compensation to the Foundation Director of Development, if one is employed, shall be paid from the Fund, unless the entity paying such costs waives payment from the Fund. All funds contributed to the NMMI Annual Fund, regardess of designation, shall bear their proportionate share of such costs. B. All Annual Fund donations designated by the donor for distribution to a particular organization shall be distributed to such organization, deducting therefrom the proportionate share of the costs described in 5.4,A, and shall be taken into account in determining the distribution of other Annual Fund donations to that organization, Fourth Amended Alliance AgreementPage 8

C. All remaining Annual Fund donations shall be allocated to the purposes established for the Annual Rind by the Alliance Committee, including funding of the approved Association budget as provided in Paragraph 6,3 below, and shall be adjusted to the extent possible to take into account annual fund contributions designated for particular organizations to best achieve the goals of the Annual Fund as established each year.

5.5 Co trIbuti i : Desi , the 'ortor for aLegal: Qsgagizatk_ m If a donor specifically designates that an annual gift to
4 4 '

the Fund be given to the Association, Foundation or NMMI, such designation will be honored. To the extent possible, such designated funds shall be counted as part of the shares mentioned in paragraph 5,4 C. above, with all annual gifts directly to NMMI being counted as part of the Foundation share.
Donor Referral to Foundation Director of Development. NIVIMI, the Association and Foundation shall refer any potential donor of a contribution other than a NMMI Annual Fund contribution, or a contribution to an approved campaign or established gifting program, to the Foundation's Director of Development. Thereafter, the Association and Foundation will assist the Development Committee in achieving the potential donor's goals for the donation or donations,
5,6

any other contribution to NMMI, the Association or the Foundation shall

qualify the donor to receive any general publications of the Association or the Foundation for the year of the gift or gifts.

5.7

Benefits to Donors. Any NMMI Annual Fund contribution or

ARTICLE 6
BUDGET REVIEW AND COORDINATION BY THE ADIJAITE budgets with input from the Alliance each year, with a joint review of the budgets at an appropriate Alliance Committee Meeting, all in accordance with Paragraph 6.3 hereof. The Alliance input will include staffing issues, purchases of depreciable assets, new programs and percemage growth of normal operating accounts. Both the Foundation and the Association will then independently develop their proposed final budgets based upon input from the Alliance, and upon their vision, needs, projected income and other requirements of their respective by-laws, The Development Committee will be responsible for budget coordination prior Fourth Amended Alliance AgreementPage 9

6.1 Budget Cycle. The Foundation and Association will develop draft

to submission of all budget drafts to the Alliance. The Alliance review of the proposed final budgets will be accomplished prior to approval by the Directors and Trustees. Approval of the Alliance Committee is not required as a prerequisite to approval of budgets by the governing boards of any of the parties hereto, but Foundation funding of the Association budget is subject to such approval. 6.2 Coordination of Personnel and Expense. The Alliance Committee may make recommendations to the Association, NMMI and the Foundation concerning staffing needs, to avoid duplication of fund raising effort and expense, to the maximum extent feasible under the circumstances, The Development Committee shall work with the Association, the Foundation and NMMI to coordinate work, minimise staffing, reduce expenses, and operate fund raising programs as efficiently as possible. 6.3 Budget._ Process. Annually, on or before April 1, the Foundation and the Association shall present their respective annual operating budgets for review by the Alliance Committee. Such Budgets shall have been reviewed and approved by the Development Committee prio:7 to submission to the Alliance Committee. The budget development activity of each organization shall remain the responsibility of the fulltime primary employee or each organization and should also include the respective Boards or Board committees responsible- for budget development.
A. Regarding the Foundation and Association budgets, they shall be prepared absent any assumed level of assistance provided to the Association by thc Foundation. The Association shall budget only those revenues (e.g., endowment income, net Income from special events, membership fees, bricks, flagpoles, benches} that solely benefit the Association and expenses (e.g., staff salaries and benefits, legal fees, accounting fees) for which the Association is solely responsible. Special events, including Homecoming and Trail Ride, shall be budgeted as subsidiary ledgers, with a goal of making such activities revenue neutral or positive, The Parties recognize that developing the Association budget in this manner will most likely result in a projected annual operating deficit,

B. The Alliance Committee will meet as soon after submission of the budgets as member schedules permit to review the budgets and establish a fundraising goal for the annual fund. The Alliance Committee also shall approve an amount to be allocated by the Foundation from the Annual Fund to the Association, and, if deemed necessary a supplemental amount needed from the Fourth Amended Alliance AgreementPage 10

Foundation, to fully satisfy the Association's projected operating fund deficit, if any. Funds provided by the Foundation shall be only that amount necessary to balance the Association budget, net of whatever amount is actually received by the Association from

the Annual Fund. The Foundation Board of Trustees must

approve such commitment by the Foundation on. an annual basis. Should the Association produce revenue above that projected in the Association budget, or not incur the projected level of expenses, the amount committed to by the Foundation for supplemental support shall be adjusted accordingly. Should the Association's projected budget not reflect a deficit, the Foundation shall not be required to provide any support. The Development Committee will conduct a review every 90 days to determine what, if any, adjustments should be made, and, as required, any resulting payments will be made by the Foundation or any repayment of over-committed funds will be made by the Association. Provided, however, that the Development Committee cannot authorize payments in excess of that approved by the Alliance Committee and Foundation Board of Trustees. To simplify accounting procedures, payments to the Association from the Annual Fund and/or the Foundation shall be paid in equal monthly installments unless all parties to this Agreement appreve a different payment schedule. To the extent that Annual Funds have not been received sufficient to fund such monthly payments, the Foundation may use its funds, subject to appropriate reimbursement, to fund such cash flow requirements. C. A final review will be conducted by the Development Committee at the end of NMMI's fiscal year. Following such review, any monies required to be paid by the Foundation shall be paid. Conversely, should the Association produce revenue that exceeds its projections and-or reduce expenses to the extent that all Association expenses are met then any excess of Foundation funds, regardless of source, committed to or provided under the provisions of this agreement, shall be returned to the Foundation for application to the annual fund or to other Foundation accounts as the President, NMMl Foundation directs.

ARTICLE 7 TERM AND ANNUAL REVIEW

Fourth Amended Alliance AgreementPage II

Term of igliance, The Alliance shall continue to exist unless terminated by one or more of the parties in accordance with paragraph 7,3 of this Agreement.

7,1

MARBLE vi )artcp.S.slimitteil. On an annual basis, after the conclusion of each fiscal year, the Alliance Committee shall review the previous year's operation of, and performance by, the Alliance. The Alliance Committee shall make such recommendations to the Foundation, NMMI and the Association as the Alliance Committee deems appropriate regarding operations by the Alliance, continuation of the Alliance, and the scope of the Alliance. The results of such review, and recommendations by the Alliance Committee, shall be furnished to the Directors, the Trustees and the Regents, for such action as the Association, the Foundation or NMMT deems appropriate,
Termination of Alliance. At any time during the term of this Agreement, any party hereto may terminate the Alliance by giving written notice of intent to terminate to the other parties hereto, specifying a termination date no sooner than six months after the date of delivery of such notice. Provided, however, that if the termination date is a date
other than June 30, the provisions of Article 5 hereof pertaining to the conduct of the NMM1 Annual Fund, and the sharing of the expenses and revenues with respect thereto, shall survive such termination and remain in full force and effect until the next June 30 following the termination date. Upon any termination Effect of Terraingting of Alliance. 7.4 of the Alliance, NMMI, the Foundation and the Association will use their best efforts to unwind their joint operations so as to cause no ongoing harm to any of them. MI records of the Alliance will be maintained by NMMI after any such termination, and both the Foundation and the Association shall have such access thereto as they may deem appropriate; provided, however, that nothing herein shall make any records of either the Association or the Foundation records of the Alliance for any purpose. To the extent any parties hereunder are sharing office space, staff, equipment, computer programs, or services, the parties agree they will use their best efforts to allocate such among themselves in a mutually agreeable fashion, and in all events in accordance with the Association MOA and the Foundation MOA.

7.2

7.3

12/

Fourth Amended Alliance AgreementPage 12

ARTICLE S

AMENDMENI AND GOVERNING LAW

8.1 Amendment of Alliance Agreement. The Alliance Agreement may be amended only by a written instrument executed by the Association, NMMI and the Foundation, after such amendment has been approved by the Directors, the Regents and the TrUstees.

Governing Law. Relationships between the Foundation and NMMI shall be governed by the Foundation MOA and all applicable state and federal laws, Relationships between NMMI and the Association shall be governed by the Association MOA and applicable state and federal laws, The relationship among NMMI, the Foundation and the Association created by the Alliance Agreement shall be governed by the law of the State of New Mexico. Anything herein contained to the contrary notwithstanding, no part of this Alliance Agreement shall be construed as requiring either the Foundation or the Association to (a) violate any of the requirements of it's articles of incorporation or by-laws or conduct its business except in strict compliance with those articles of incorporation or by-laws or conduct its business except in strict compliance with those articles or bylaws; (b) violate policies established by the Trustees or the Directors; (c) violate any requirements of the Internal Revenue Code or the regulations there under; or (d) take any action which would .jeopardize their status as exempt organizations under thc InCernal Revenue Code. Wherever possible each provision of this Alliance Agreement shall be interpreted accordingly, and any provision hereof which is not so interpreted by a court of competent jurisdiction or any governmental agency having authority to do so shall be deemed to be void.

sa

ARTICLE 9

ADOPTION BY GOVERNING BOARDS This Alliance Agreement is hereby approved by the governing bodies of the Foundation, N10/11 and the Association as witnessed by the execution hereof by their officers. This Alliance Agreement was approved by the Board of Regents of New Mexico Military Institute on July 6, 2012.

Fourth Amended Alliance AgreementPage 13

NEW MEXICO MILITARY INSTITUTE BY: STEPHEN President, N

ERNOSTER oard of Regents

This Alliance Agreement was approved by the Board of Trustees of the New Mexico Military Institute Foundation, Inc. on July 6, 2012. NEW MEXICO MILITARY INSTITUTE FOUNDATION, INC. By: STEP ..EN L Lb0 Chairman, Board of Trustees

This Alliance Agreement was approved by the Board of Direetcrs of the New Mexico Military Institute Alumni Association, Inc. on 4.7.0- 3 , 2012. NEW MEXICO MILITARY INSTITUTE ALUMNI ASSOCIATION, INC.

By A. D. BROWNFIELD III President

Fourth Amended Alliance AgreementPage 14