Document:

Exhibit 10.4

 

MEMBERSHIP UNIT PURCHASE AGREEMENT

 

THIS MEMBERSHIP UNIT PURCHASE AGREEMENT (“Agreement”) is entered into by and between TWIN CITIES POWER, L.L.C., TWIN CITIES ENERGY, L.L.C. and CYGNUS PARTNERS, L.L.C., all Minnesota Limited Liability Companies (the “PURCHASERS”), and M. J. TUFTE (the “SELLER”) dated the 30th day of December 2011 and for accounting purposes this Agreement shall be determined to be effective January 1st, 2012.  The PURCHASERS and SELLER are jointly referred to as PARTIES (“PARTIES”).

 

WHEREAS, SELLER desires to sell, convey and issue, and PURCHASERS desire to purchase and redeem, a total of fifteen hundred forty (1,540) membership units from each of the PURCHASER companies (the “Purchased Units”) for the consideration and on the terms set forth in this Agreement.  The Purchased Units are represented by Exhibits “A,” “B” and “C” are attached hereto and incorporated herein by this reference.

 

WHEREAS, SELLER desires to assign, and PURCHASERS desire to accept such assignment of Financial Rights associated with the SELLER’s interests as of January 1st, 2012 and to retain all Governance Rights, pursuant to the terms and conditions of this Agreement subject to FERC approval to convey such Governance Rights to the PURCHASERS.

 

NOW, THEREFORE, in consideration of the covenants and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the SELLER and PURCHASERS, intending to be legally bound, hereby agree as follows:

 

1.             UNIT PURCHASE

 

1.1           INITIAL UNIT PURCHASE

 

Subject to the terms and conditions of this Agreement, SELLER hereby agrees to sell, issue and convey the Financial Rights to the Purchased Units, and PURCHASERS agree to purchase and redeem the Financial Rights to the Purchased Units from SELLER in accordance with the terms hereof.  The Purchased Units shall include all Financial Rights associated with the Purchase Units of the Company being purchased and redeemed.  The SELLER shall execute Assignments Separate from Certificates for the Purchase Units represented by Exhibit “D,” “E” and “F” which are attached hereto and incorporated herein by this reference.

 

1.2           PURCHASE PRICE

 

The purchase price to be paid by PURCHASERS to SELLER for the Purchased Units shall be One Hundred Thousand and no/100 Dollars ($100,000.00) (the “Purchase Price”).  The Purchase Price shall be paid by PURCHASERS to SELLER in cash, certified check or wire transfer.

 

 

1.3           UNIT ISSUANCE

 

Effective upon payment to SELLER of the Initial Payment, execution of the Promissory Note and execution of the Agreement, SELLER shall convey to PURCHASERS the Financial Rights to the Purchased Units subject to Federal Energy Regulatory Commission (“FERC”) approval at which time the SELLER will convey the Governance Rights to the PURCHASERS. Said issuance shall be promptly reflected in the required records of the Company upon FERC approval.

 

1.4           FURTHER TRANSFERS

 

SELLER agrees to transfer to PURCHASERS, free and clear of all liens and encumbrances, the entire rights in SELLER Interests not transferred pursuant to this Agreement as such time as FERC approval is obtained.

 

1.5           DISTRIBUTIONS

 

SELLER shall be entitled to any and all pro rata distributions from the PURCHASER companies through December 31, 2011 as a member of the PURCHASER companies, including, but not limited to, any future distributions to members of the PURCHASER companies for liabilities incurred, including, but not limited to tax liabilities, prior to December 31, 2011.

 

2.             REPRESENTATIONS AND WARRANTIES OF SELLER

 

SELLER represents and warrants to PURCHASERS as follows:

 

2.1           AUTHORITY; NO CONFLICT

 

(a)                          This Agreement constitutes the legal, valid, and binding obligation of SELLER, enforceable in accordance with its terms;

 

(b)                         SELLER has the full legal capacity, power and authority to enter into this Agreement and perform SELLER’s obligations hereunder;

 

(c)                          Neither the execution and delivery of this Agreement nor the consummation or performance of SELLER’s obligations under this Agreement will conflict with, or result in a violation of any laws, regulations, ordinances, or any contract or agreement to which SELLER is a party or by which SELLER is bound; and

 

(d)                         SELLER does not require the approval of third parties to consummate and perform SELLER’s obligations under this Agreement.

 

 

2.2           NO ENCUMBRANCES

 

The Purchased Units are, and shall be issued and conveyed to PURCHASERS, free and clear of all encumbrances, liens, or claims of other parties of any kind.

 

2.3           LITIGATION, ADVERSE CLAIMS AND RELATED MATTERS

 

There is no current, pending, or to the best of SELLER’s knowledge, threatened litigation proceeding, or investigation relating to the Purchased Units nor is there any judgment, order or decree which would prevent, impede, or make illegal the consummation of the transactions contemplated in this Agreement.  Notwithstanding the foregoing, SELLER acknowledges the existence of the HTS Note and corresponding covenants in favor of the HTS parties associated with the HTS note.

 

2.4           LAWS AND REGULATIONS

 

To the best of SELLER’s knowledge, PURCHASERS have complied, and are in compliance, with all applicable laws, statutes, orders, rules, regulations and requirements promulgated by governmental or other authorities relating to the PURCHASERS business.

 

2.5           NO REPRESENTATIONS

 

SELLER acknowledges that neither PURCHASERS, nor any officer, director, representative or agent of the PURCHASERS, has made any representation, warranty, or agreement with SELLER to induce SELLER to convey the Purchased Units as herein contemplated, except as specifically set forth in this Agreement. SELLER has determined that the Purchase Price herein specified represents fair consideration for the Purchased Units and has not relied on any representation by PURCHASERS in that regard.

 

2.6           CONSULTATION

 

SELLER acknowledges that SELLER has had the opportunity to consult with and to obtain advice from such legal, tax, and other advisers as SELLER has deemed appropriate and that the Agreement to convey the Purchased Units to PURCHASERS constitutes SELLER’s free and informed decision.

 

2.7           RESIGNATION

 

Seller shall execute a Resignation as manager/officer and Board of Governor member of each of the Purchased Companies as set forth on the attached Notice of Resignation which are attached hereto and incorporated herein and marked as Exhibits “H,” “I” and “J.”

 

2.8           INCOME, GAIN, LOSS OR DEDUCTION ALLOCATION

 

The SELLER agrees that the PURCHASERS shall not allocate any income, gain, loss or deduction to the SELLER after December 31st, 2011, except as may be necessary for any

 

 

member distributions made to SELLER after December 31, 2011 for tax liabilities for any time period prior to December 30 2011.  Rather all such allocations shall be made for the account of the PURCHASERS with respect to the SELLER’s Purchased Units.

 

3.             REPRESENTATIONS AND WARRANTIES OF PURCHASERS

 

PURCHASERS represent and warrants to the SELLER as follows:

 

3.1           AUTHORITY; NO CONFLICT

 

(a)                                  This Agreement constitutes the legal, valid, and binding obligation of the PURCHASERS, enforceable in accordance with its terms.

 

(b)                                 PURCHASERS have the full legal capacity, power and authority to enter into this Agreement and perform PURCHASERS obligations hereunder.

 

(c)                                  Neither the execution and delivery of this Agreement nor the consummation or performance of PURCHASERS obligations under this Agreement will conflict with, or result in a violation of any laws, regulations, ordinances, or any contract or agreement to which PURCHASERS are a party or by which PURCHASERS are bound.

 

(d)                                 PURCHASERS have received all necessary approvals of it members or other third parties to consummate and perform PURCHASERS obligations under this Agreement.

 

3.2           NO REPRESENTATIONS

 

PURCHASERS acknowledge that the SELLER has made no representation, warranty, or agreement with PURCHASERS to induce PURCHASERS to purchase and redeem the Purchased Units as herein contemplated, except as specifically set forth in this Agreement. PURCHASERS have determined that the Purchase Price represents fair consideration for the Purchased Units and has not relied on any representation by SELLER in that regard.

 

3.3           CONSULTATION

 

PURCHASERS acknowledges that he has had the opportunity to consult with and to obtain advice from such legal, tax, and other advisers as PURCHASERS have deemed appropriate and that their decision to purchase the Purchased Units constitutes their free and informed decision.

 

 

4.             DEFAULT AND TERMINATION

 

4.1           DEFAULT

 

A party shall be in default under the terms of the Agreement in the event such party fails to perform or comply with any material term, condition, obligation or covenant contained herein and such default shall continue for a period of thirty (30) days after written notice from the non-defaulting party.

 

4.2           REMEDIES

 

In the event of default, the non-defaulting party may elect to terminate this Agreement or to seek enforcement of the obligations of the defaulting party hereunder, damages and/or such other rights and remedies as are available at law or in equity. In addition, a party shall have the unilateral right to terminate this Agreement immediately in the event that the other party: (a) initiates any voluntary proceeding in bankruptcy; (b) is the subject of an involuntary proceeding in bankruptcy that is not dismissed within 60 days after initiation; (c) makes any general assignment for the benefit of its creditors; (d) makes any proposal to its creditors to take or attempt to take the benefit of any legislation relating to insolvency or bankruptcy; or (e) has a receiver, trustee, or liquidator appointed for all or a substantial portion of its property.

 

5.             SURVIVAL AND INDEMNIFICATION

 

5.1           SURVIVAL OF REPRESENTATIONS AND WARRANTIES

 

Each of the representations and warranties of the PARTIES contained in this Agreement shall survive the closing of the transactions contemplated hereby for a period of thirty-six (36) months, after which time no claim for an incorrect statement or representation, or for other breach of any warranty under this Agreement may be brought, and no litigation with respect thereto may be commenced, and no party shall have any liability or obligation with respect thereto, unless the indemnified party gave written notice to the indemnifying party specifying with particularity the incorrect statement or representation or breach of warranty claimed on or before the expiration of such period.

 

5.2           INDEMNIFICATION BY SELLER

 

Subject to Section 5.1, SELLER covenants and agrees to indemnify, defend and hold PURCHASERS, and its officers, directors, representatives and agents, harmless from, against and in respect to any and all losses, costs, expenses (including, without limitation, reasonable attorneys’ fees and disbursements of counsel) liabilities, damages, fines, penalties, charges, assessments, judgments, settlements, claims, causes of action and other obligations of any nature whatsoever that any of them may at any time, directly or indirectly, suffer, sustain, incur or become subject to, arising out of, based upon or resulting from or on account of each or all of the following:

 

(a)          The breach or falsity of any representation or warranty made by SELLER in this Agreement; or

 

 

(b)         The breach of any covenant or agreement made by SELLER in this Agreement, including the documents, instruments and agreements to be executed and/or delivered by SELLER pursuant hereto or thereto.

 

5.3           INDEMNIFICATION BY PURCHASERS

 

Subject to Section 5.1, PURCHASERS covenants and agrees to indemnify, defend and hold SELLER harmless from, against and in respect of any and all losses, costs, expenses (including, without limitation, reasonable attorneys’ fees and disbursements of counsel) liabilities, damages, fines, penalties, charges, assessments, judgments, settlements, claims, causes of action and other obligations of any nature whatsoever that any of them may at any time, directly or indirectly, suffer, sustain, incur or become subject to, arising out of, based upon or resulting from or on account of each or all of the following:

 

(a)                                  The breach or falsity of any representation or warranty made by PURCHASERS in this Agreement; or

 

(b)                                 The breach of any covenant or agreement made by PURCHASERS in this Agreement, including the documents, instrument and agreements to be executed and/or delivered by PURCHASERS pursuant hereto or thereto.

 

6.             GENERAL PROVISIONS

 

6.1           EXPENSES

 

Except as otherwise expressly provided in this Agreement, each party to this Agreement will bear its respective expenses incurred in connection with the preparation, execution, and performance of this Agreement.

 

6.2           FURTHER ASSURANCES

 

The PARTIES agree (a) to execute and deliver to each other such other documents, and (b) to do such other acts and things, all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement.

 

6.3           ENTIRE AGREEMENT AND MODIFICATION

 

This Agreement constitutes the entire Agreement by and between the PARTIES, and supersedes any other verbal or written representations, promises, agreements or understandings between the PARTIES and their respective agents or representatives. No representations, warranties, undertakings, or promises, whether written or oral, expressed or implied, have been made by SELLER or PURCHASERS, unless expressly stated in this Agreement or unless agreed upon in writing by the PARTIES hereto. This Agreement may be amended or modified only by a writing signed by the PARTIES.

 

 

6.4           TIME OF ESSENCE

 

Time is of the essence with respect to all obligations of SELLER and PURCHASERS under this Agreement. If any date designated in this Agreement falls on a Saturday, Sunday or legal holiday, such date shall automatically be extended until the next following business day.

 

6.5           CUMULATIVE RIGHTS AND WAIVER

 

The rights and remedies of the PARTIES to this Agreement are cumulative and not alternative. Neither the failure nor any delay by any party in exercising any right, power, or privilege under this Agreement or the documents referred to in this Agreement will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power, or privilege will preclude any other or further exercise of such right, power, or privilege.

 

6.6           NOTICES

 

Under this Agreement if any party is required to give notice to another party, such notice shall be deemed given if delivered by a recognized overnight delivery service, or mailed first class, postage prepaid, and addressed as follows (or as subsequently noticed to the other party):

 

If to SELLER:

 

M. J. TUFTE

1216 Cedar Lake Road

Minneapolis, Minnesota 55416

 

If to PURCHASERS:

 

TWIN CITIES POWER, LLC

16233 Kenyon Avenue, Suite 210

Lakeville, Minnesota 55044

 

TWIN CITIES ENERGY, LLC

16233 Kenyon Avenue, Suite 210

Lakeville, Minnesota 55044

 

CYGNUS PARTNERS, LLC

16233 Kenyon Avenue, Suite 210

Lakeville, Minnesota 55044

 

Attn:  Tim Krieger, President

 

 

Notices delivered by overnight delivery shall be deemed received upon the date of deposit with the delivery service, if such date is a business day.  Otherwise, the effective date for such notice shall be the first business day following deposit with the delivery service. Notices sent by mail shall be deemed received on the earlier of actual receipt or three business days after deposit in the U.S. mail as provided above.

 

6.7           APPLICABLE LAW

 

This Agreement shall be construed and enforced in any State or Federal court in Minnesota in accordance with the laws of the State of Minnesota, irrespective of the domiciles of the PARTIES, the state in which the Agreement was executed, or any other factors affecting choice of law. If any portion of this Agreement is unenforceable under Minnesota Law, the balance of the Agreement shall remain in full force and effect if enforcement of the remainder of the Agreement is reasonably practicable.

 

6.8           BINDING EFFECT; ASSIGNMENT RESTRICTED

 

This Agreement shall be binding upon and inure to the benefit of the PARTIES hereto and their respective successors, permitted assigns, and representatives. Neither party shall assign, transfer or convey any interest in this Agreement or, nor agree to do so, without the prior written consent of the other party.

 

6.9           INTREPRETATION

 

The rule of strict construction against the drafting party shall not apply to this Agreement.  SELLER and PURCHASERS acknowledge that this Agreement is the product of all of both of their respective efforts, that it expresses their agreement, and that it should not be interpreted in favor of or against either party merely because of their efforts in preparing it. Therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement. The invalidity of any or the provisions of this Agreement shall not affect or impair the validity or enforceability of the remainder or this Agreement.

 

6.10         COUNTERPARTS

 

This Agreement may be executed in counterparts, each of which shall for all purposes be deemed to be an original and all of which shall constitute the same instrument.

 

 

IN WITNESS WHEREOF, the PARTIES have executed and delivered this Agreement effective as of the date first written above.

 

	
SELLER:
    	
 
    	
PURCHASERS:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
TWIN CITIES POWER, LLC
    
	
/s/ Michael Tufte
    	
 
    	
 
    
	
M. J. TUFTE
    	
 
    	
/s/ Timothy Krieger
    
	
 
    	
 
    	
By: TIM KRIEGER
    
	
 
    	
 
    	
Its: President/Chief Manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
TWIN CITIES ENERGY, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/ Timothy Krieger
    
	
 
    	
 
    	
By: TIM KRIEGER
    
	
 
    	
 
    	
Its: President/Chief Manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
CYGNUS PARTNERS, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/ Timothy Krieger
    
	
 
    	
 
    	
By: TIM KRIEGER
    
	
 
    	
 
    	
Its: President/Chief Manager
    

 

 

January 6, 2012

 

Mr. Michael Tufte

Twin Cities Power Holdings, LLC

16233 Kenyon Avenue

Lakeville, MN 55044

 

Dear Michael:

 

This letter agreement clarifies and amends the Membership Unit Purchase Agreement, dated December 30, 2011, among you and the Purchasers named therein (the “Agreement”).

 

The parties recognize that, as of December 31, 2011, a reorganization took place whereby the Purchasers became subsidiaries of Twin Cities Power Holdings, LLC (“TCPH”) and your membership interests in the Purchasers were converted into a membership interest in TCPH.

 

Accordingly, we agree that references in the Agreement to your membership interests, Financial Rights and Governance Rights in the Purchasers shall be deemed to be references to your membership interest, Financial Rights and Governance Rights, respectively, in TCPH and references to the Purchasers shall be deemed to be references to TCPH.

 

TCPH shall replace the Purchasers as a party to the Agreement and all the obligations of the Purchasers are hereby assumed by TCPH.

 

The Assignments you executed shall be collectively deemed to be an assignment of your Financial Rights in TCPH.

 

If TCPH determines that FERC approval is not necessary for the transfer and assignment of your Governance Rights, your Governance Rights shall be automatically assigned to TCPH without any further action on your part.  TCPH will notify you of such transfer and assignment.  If FERC approval is required, your Governance Rights shall be automatically assigned to TCPH without any further action on your part once TCPH receives notice of such approval.

 

In all other respects, the Agreement shall remain in full force and effect.

 

 

If the foregoing accurately sets forth our mutual understanding and agreement, please execute this letter in the space provided below.

 

	
Twin Cities Power Holdings, LLC
    	
 
    	
Twin Cities Power, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By
    	
/s/ Timothy Krieger
    	
 
    	
By
    	
/s/ Timothy Krieger
    
	
 
    	
Tim Krieger, President
    	
 
    	
 
    	
Tim Krieger, President
    
	
 
    	
 
    	
 
    
	
Twin Cities Energy, LLC
    	
 
    	
Cygnus Partners, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By
    	
/s/ Keith Sperbeck
    	
 
    	
By
    	
/s/ Timothy Krieger
    
	
 
    	
Keith Sperbeck, President
    	
 
    	
 
    	
Tim Krieger, President
    
	
 
    	
 
    	
 
    
	
Agreed to and Accepted:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Michael J. Tufte
    	
 
    	
 
    
	
Michael J. TufteExhibit 10.23

 

CONSULTANT AND PROFESSIONAL SERVICES AGREEMENT

 

THIS CONSULTANT AND PROFESSIONAL SERVICES AGREEMENT, (“Agreement”), dated this 8th day of March 2012 and effective as of the 6th day of March 2012 by and among WILEY H. SHARP III (“CONSULTANT”) having an address at 4879 Devonshire Circle, Shorewood, Minnesota 55331 and TWIN CITIES POWER HOLDINGS, L.L.C., a Minnesota Limited Liability Company (“TWIN CITIES”), having a place of business at 16233 Kenyon Avenue, Suite 210, Lakeville, Minnesota 55044. CONSULTANT and TWIN CITIES are jointly referred to as PARTIES (“PARTIES”).

 

W I T N E S S E T H

 

WHEREAS, the CONSULTANT wishes to provide consulting services (the “Services”) to TWIN CITIES; and

 

WHEREAS, TWIN CITIES wishes to procure the Services from the CONSULTANT, for good and valuable consideration.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants hereinafter set forth, the PARTIES hereto agree as follows:

 

1.              SCOPE OF WORK.

 

A.            TWIN CITIES hereby retains and engages the CONSULTANT, commencing as of March 6, 2012 to serve as and in the capacity of the Vice President of Finance/Chief Financial Officer of TWIN CITIES with respect to all aspects of, and all matters pertaining to, the operation of TWIN CITIES.

 

B.            The CONSULTANT accepts such engagement and agrees to perform all such duties of an advisory or consultant nature that may be reasonably requested as the Vice President of Finance/Chief Financial Officer of TWIN CITIES. The CONSULTANT shall report and be responsible to the Chief Executive Officer of TWIN CITIES and shall devote his best efforts during such time as may be requested to render such services. The CONSULTANT shall be responsible for setting his own hours of work, but shall provide TWIN CITIES with at least 120 hours per month of services.

 

 

C.            The CONSULTANT shall supervise accounting functions and staff carrying out accounting functions in TWIN CITIES.

 

2.              TERM/TERMINATION. The Term of this Agreement shall be from March 6, 2012 through February 28, 2013 (the “Term”). The Agreement may be terminated by TWIN CITIES or CONSULTANT upon thirty (30) days written notice.

 

Upon completion of Services or upon any termination of this Agreement, the CONSULTANT agrees to turn over to TWIN CITIES all data, materials and work product held by the CONSULTANT respecting his work while at TWIN CITIES and any copies of such data and materials in the CONSULTANT’s possession, supplied to him in connection with this Agreement.

 

3.              COMPENSATION FOR SERVICES.

 

A.                  Compensation. TWIN CITIES agrees to pay the CONSULTANT for the Services performed the sum of Eleven Thousand and no/100 Dollars ($11,000.00) per month payable in arrears, in accordance with the standard payroll practices of TWIN CITIES.  In the event that the Acquisition Advisory Agreement with Altus Financial Group, LLC dated January 5th, 2012, as Amended, is terminated, then, and in that event the CONSULTANT’s compensation shall be increased to Fifteen Thousand and no/100 Dollars ($15,000.00) per month. The CONSULTANT shall submit a monthly invoice to the Chief Executive Officer of TWIN CITIES for the Services rendered and authorized expenses incurred.

 

B.                  Bonus. The CONSULTANT shall be entitled to a discretionary bonus as long at TWIN CITIES has sufficient profits to support management bonuses as determined by the Board of Governors.

 

4.              TRAVEL/REIMBURSABLE EXPENSES.

 

A.            All travel by the CONSULTANT to be reimbursed by TWIN CITIES must be necessary and cost effective and authorized in advance by TWIN CITIES.

 

B.            It is expected that all expenses associated with transportation and meals incurred by the CONSULTANT, while conducting activities on behalf of TWIN CITIES, will be at reasonable rates and that the CONSULTANT will exercise prudence in incurring such expenses.

 

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C.            TWIN CITIES will reimburse the CONSULTANT’s approved business expenses at cost.

 

5.              INDEPENDENT CONTRACTOR.

 

A.            The CONSULTANT shall perform all Services hereunder as an independent contractor; and nothing contained herein shall be deemed to create any association, partnership, joint venture or relationship of principal and agent or master and servant or employer and employee between the PARTIES hereto or any affiliates or subsidiaries thereof, or to provide either party with the right, power or authority, whether express or implied, to create any such duty or obligation on behalf of the other party.

 

B.            The CONSULTANT also agrees not to be treated, or seek to be treated, as an employee of TWIN CITIES for any purposes, including for the purposes of fringe benefits provided by TWIN CITIES, or for disability income, social security taxes and benefits, federal unemployment compensation taxes, state unemployment insurance benefits and federal income tax withholding at sources. The CONSULTANT hereby represents that the CONSULTANT has and at all times will maintain timely payments of all taxes due to the Internal Revenue Service and all other government agencies, including withholding and all other taxes.

 

C.            The CONSULTANT, while acting as the Vice President of Finance/Chief Financial Officer of TWIN CITIES, shall be provided with Directors and Officers insurance coverage and an Indemnification Agreement from TWIN CITIES.

 

6.              COMPLIANCE WITH LAWS. The CONSULTANT agrees to comply with all applicable federal, state, county and local laws, ordinances, regulations and codes in the performance of his obligations under this Agreement and payment of applicable taxes. The CONSULTANT further agrees to hold harmless and indemnify TWIN CITIES and its subsidiaries and affiliates against any loss or damage (including reasonable attorneys’ fees) that may be sustained by reason of (i) the failure of the CONSULTANT to comply with such laws, ordinances, regulations and codes; (ii) CONSULTANT’s gross negligence or willful misconduct; or (iii) CONSULTANT’s failure to follow TWIN CITIES’ corporate policies, including, without limitation, the Code of Conduct and

 

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Compliance Program or the legitimate instructions of the Chief Executive Officer or Board of Governors .

 

7.              CONFIDENTIAL INFORMATION.

 

A.            The CONSULTANT hereby agrees that all knowledge and information that he learns or gains from TWIN CITIES in the course of his engagement hereunder, which knowledge and/or information (whether presently existing or hereafter developed) is not publicly known and which was not known by the CONSULTANT without restriction prior to this engagement or any previous engagement or employment by TWIN CITIES, regardless of the form in which such information may be contained or communicated, is the exclusive, Confidential and Proprietary Information of TWIN CITIES, or in some cases, of its or their vendors or customers who have entrusted the same to TWIN CITIES (said knowledge and information hereinafter being referred to collectively as “Confidential and Proprietary Information”). In the event the CONSULTANT shall ever claim that the Confidential and Proprietary Information, or any portion thereof, was known to him prior to his engagement by TWIN CITIES he shall have the burden of showing such prior knowledge without restriction by tangible evidence.

 

B.            The CONSULTANT further agrees, subject to the exemptions set forth in Subparagraph C below, that:

 

(1)         He will retain, hold and safeguard the Confidential and Proprietary Information in strict confidence;

 

(2)         He will make no use whatsoever of the Confidential and Proprietary Information except for the sole and exclusive benefit of TWIN CITIES;

 

(3)         He will make no disclosure, directly or indirectly, of the Confidential and Proprietary Information to any third party without TWIN CITIES’ prior written consent thereto, except, however, such prior written consent shall not be required for disclosure to employees, agents or duly authorized representatives of TWIN CITIES as reasonably required by the CONSULTANT to enable them to perform the Services hereunder within the course and scope of the CONSULTANT’s performance hereunder;

 

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(4)         He will protect the Confidential and Proprietary Information against unauthorized use or disclosure by all reasonable means, including, by way of illustration and not limitation, maintaining documents and other materials containing such Confidential and Proprietary Information in secured files when not in use;

 

(5)         He will make no copies or reproductions of documents, software and other materials containing the Confidential and Proprietary Information without TWIN CITIES’ prior written consent, and then only to the minimum extent reasonably necessary for the CONSULTANT’s performance hereunder; and

 

C.            The obligations undertaken by the CONSULTANT hereunder shall not apply to any portion of the Confidential and Proprietary Information disclosed that:

 

(1)   Was known to the CONSULTANT without restriction prior to its disclosure by TWIN CITIES, provided that the CONSULTANT can document such prior knowledge;

 

(2)   Is published by TWIN CITIES or its customers or vendors, as the case may be, or otherwise becomes, other than by act or omission of the CONSULTANT, generally available to the public (such as, for example, by the independent and lawful publication thereof by third parties); or

 

(3)   Shall, by lawful means, be made available to the CONSULTANT for use by a third party.

 

D.    The CONSULTANT acknowledges that violation of this provision would cause irreparable harm to TWIN CITIES not adequately compensable by money damages. TWIN CITIES shall therefore be entitled, in addition to any other right it may have in law or equity, to an injunction without the posting of any bond or other security, enjoining and restraining the CONSULTANT from any such actual or threatened violation of this provision.

 

8.              TWIN CITIES COMPANIES CODE OF CONDUCT AND COMPLIANCE PROGRAM.  The CONSULTANT agrees to be bound by and comply with the Twin Cities Companies’ Code of Conduct and Compliance Program, as it may be amended from time to time. The CONSULTANT acknowledges and agrees that it is his responsibility to know the terms of the program as in force from time to time and where

 

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the CONSULTANT has any doubts to check with the Companies’ Compliance Officer and to conduct his duties in conformity with the Officer’s directives.

 

9.              TAXES.  TWIN CITIES shall not be responsible for any federal, state or local taxes based on the CONSULTANT’s net income or receipts, or such other taxes based on the CONSULTANT doing business.

 

10.       REPRESENTATIONS AND WARRANTIES. The CONSULTANT represents and warrants that the Services performed pursuant to this Agreement shall be performed in a professional manner.

 

11.       MANAGEMENT AND REVIEW MEETINGS.  The “Chief Executive Officer” of TWIN CITIES is responsible for monitoring the CONSULTANT’s work, for review and approval of invoice documentation and shall act as the agent for the purpose of any notices required or given under this Agreement. The address and telephone number of the Chief Executive Officer is:

 

	
TWIN   CITIES:
    	
 
    	
TWIN   CITIES POWER HOLDINGS, L.L.C.
    
	
Address:
    	
 
    	
16233   Kenyon Avenue
    
	
 
    	
 
    	
Lakeville,   Minnesota 55044
    
	
 
    	
 
    	
Tim   Krieger, President/Chief Manager
    
	
 
    	
 
    	
 
    
	
Telephone   Number:
    	
 
    	
952-431-0404
    

 

12.       WORK POLICY.

 

A.            The CONSULTANT agrees to observe the work rules, building security measures and holiday schedule of TWIN CITIES when on TWIN CITIES premises, which will be provided to the CONSULTANT upon request.

 

B.            The CONSULTANT further agrees to employ all reasonable efforts to meet TWIN CITIES’ assignment deadlines and documentation standards, as applicable. Unless otherwise agreed upon, the CONSULTANT shall meet with TWIN CITIES to discuss and review the progress of the current assignments on a regular basis.

 

13.       GENERAL PROVISIONS.

 

A.            Paragraph Headings.  Paragraph headings are for convenience only and shall not be a part of the Terms and Conditions of this Agreement.

 

B.            Waiver. Failure by either party at any time to enforce any obligation by the other party, to claim a breach of any term of this Agreement or to exercise any power

 

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agreed to hereunder will not be construed as a waiver of any right, power or obligation under this Agreement, will not affect any subsequent breach and will not prejudice either party in regard to any subsequent action.

 

C.            Severability. If any term or provision of this Agreement should be declared invalid by a court of competent jurisdiction, the remaining terms and provisions of this Agreement shall remain unimpaired and in full force and effect.

 

D.            Record Retention. The CONSULTANT agrees to maintain complete and accurate accounting records in accordance with sound accounting practices to substantiate the CONSULTANT’s charges hereunder. The CONSULTANT shall preserve such records for a period of not less than two (2) years after completion of the pertinent Services. TWIN CITIES shall have access to such records for purposes of audit and for bank regulatory purposes, either through its own representatives, its regulators or through an accounting firm selected and paid by TWIN CITIES. Any such review of the CONSULTANT’s records shall be conducted at reasonable time during normal business hours.

 

E.             Assignment. Neither party may assign any rights or obligations under this Agreement without the prior consent of the other party.

 

F.              Modification. No modification, waiver or amendment of any term or conditions of this Agreement shall be effective unless and until it shall be reduced to writing and signed by both of the PARTIES hereto or their legal representatives. All legally required amendments will automatically become part of this Agreement thirty (30) days after notification to both PARTIES.

 

G.            Survival. The provisions of this Agreement that by their nature and content are intended to survive the performance hereof, shall so survive the completion and termination of this Agreement.

 

H.           Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the substantive laws of the State of Minnesota.

 

I.                Complete Agreement. This Agreement constitutes the entire agreement of the PARTIES with respect to its subject matter and may not be modified in any way except by written agreement signed by both PARTIES. There are no other agreements either express or implied with regard to this subject matter.

 

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J.                Notices. All notices and other communications required or permitted under this Agreement will be in writing and will be hand delivered or sent by registered or certified first class mail, postage prepaid and will be effective upon delivery if hand delivered, or three (3) days after mailing if mailed to the address stated as follows:

 

	
To the COMPANY:
    	
 
    	
TWIN CITIES POWER HOLDINGS, L.L.C.
    
	
 
    	
 
    	
16233 Kenyon Avenue, Suite 210
    
	
 
    	
 
    	
Lakeville, Minnesota 55044
    
	
 
    	
 
    	
Attn: Tim Krieger
    
	
 
    	
 
    	
 
    
	
To the CONSULTANT:
    	
 
    	
WILEY H. SHARP III
    
	
 
    	
 
    	
4979 Devonshire Circle
    
	
 
    	
 
    	
Shorewood, Minnesota 55331
    

 

These addresses may be changed at anytime by like notice.

 

K.           Counterparts.  This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same Agreement.

 

IN WITNESS WHEREOF, the PARTIES hereto, through their duly authorized officers, have executed this Agreement as of the day and year first set forth below.

 

 

	
TWIN   CITIES:
    	
 
    	
CONSULTANT:
    
	
TWIN   CITIES POWER HOLDINGS, L.L.C.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/   Timothy Krieger
    	
 
    	
/s/   Wiley H. Sharp III
    
	
By:
    	
TIM   KRIEGER
    	
 
    	
By:   WILEY H. SHARP III
    
	
 
    	
Its: Chief Executive Officer
    	
 
    	
 
    

 

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