Document:

ex_101791.htm

Exhibit 10.2

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (the “Agreement”), is by and between Digital Power Corporation, a California corporation (the "Company"), and  ____________, a New York limited liability company (the "Holder"), and is made pursuant to that certain Securities Purchase Agreement between the Company and the Holder, dated as of the date hereof (the “Purchase Agreement”). All terms not defined herein shall have such meanings assigned to them in the Purchase Agreement. 

 

WHEREAS, pursuant to an understanding between the Company and the Purchaser on November 22, 2017, and pursuant to the terms of and in order to induce the Holder to enter into the Purchase Agreement, the Company and the Holder have agreed to enter into this Agreement.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the Company and the Holder hereby agree as follows:

 

1. Mandatory Registration. 

 

a.      No later than thirty (30) days after the Closing Date, the Company shall file a registration statement (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”) which seeks to register the Shares and the Underlying Shares (the "Registerable Securities") under the Securities Act of 1933 (the “1933 Act”). The Company will use its best efforts to cause such Registration Statement to be declared effective by the SEC within sixty (60) days after filing with the SEC. 

 

b.     To the extent the staff of the SEC does not permit all of the Registrable Securities to be registered on the Registration Statement pursuant to this Agreement, the Company shall (i) inform the Holder and use its best efforts to file amendments to the Registration Statement as required by the SEC and/or (ii) withdraw the Registration Statement and file a new registration statement (a “New Registration Statement”), in either case covering the maximum number of Registrable Securities permitted to be registered by the SEC, on Form S-3 or such other form available to register for resale the Registrable Securities as a secondary offering; provided, however, that prior to filing such amendment or New Registration Statement, the Company shall be obligated to use its best efforts to advocate with the SEC for the registration of all of the Registrable Securities in accordance with the SEC Guidance, including without limitation, the Manual of Publicly Available Telephone Interpretations D.29. Notwithstanding any other provision of this Agreement, if any publicly-available written or oral guidance, comments, requirements or requests of the SEC staff ( the “SEC Guidance”) sets forth a limitation of the number of Registrable Securities permitted to be registered on a particular registration statement as a secondary offering (and notwithstanding that the Company used best efforts to advocate with the SEC for the registration of all or a greater number of Registrable Securities), the number of Registrable Securities to be registered on such registration statement will be reduced to comply with the SEC Guidance. In the event the Company amends the Registration Statement as set forth herein, the Company will use its best efforts to file with the SEC, as promptly as allowed by SEC or SEC Guidance provided to the Company or to registrants of securities in general, one or more Registration Statements on Form S-3 or such other form available to register for resale for those Registrable Securities that were not registered for resale on the Registration Statement, as amended, or the New Registration Statement. For the avoidance of doubt, (1) the New Registration Statement shall be filed by the Company with the SEC no later than thirty (30) days after the SEC notifies the Company of the need to file such registration statement or the withdrawal of the First Registration Statement; and (2) the will use its best efforts to cause the New Registration Statement to be declared effective by the SEC within sixty (60) days after its initial filing with the SEC

 

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2. Cooperation with Company. The Holder will cooperate with the Company in all respects in connection with this Agreement, including, timely supplying all information reasonably requested by the Company and executing and returning all documents reasonably requested in connection with the registration and sale of the Registerable Securities, at no expense to the Holder.

 

3. Registration Procedures. If and whenever the Company is required by any of the provisions of this Agreement to use its best efforts to effect the registration of any of the Registerable Securities under the 1933 Act, the Company shall (except as otherwise provided in this Agreement), as expeditiously as possible:

 

a. prepare and file with the SEC a registration statement using its best efforts to cause such registration statement to become effective and remain effective until all the Registerable Securities are sold or become capable of being publicly sold without registration under the 1933 Act.

 

b. prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the 1933 Act with respect to the sale or other disposition of all securities covered by such registration statement whenever the Holder shall desire to sell or otherwise dispose of the same (including prospectus supplements with respect to the sales of securities from time to time in connection with a registration statement pursuant to Rule 415 of the SEC);

 

c. furnish to the Holder such numbers of copies of a summary prospectus or other prospectus, including a preliminary prospectus or any amendment or supplement to any prospectus, in conformity with the requirements of the 1933 Act, and such other documents, as the Holder may reasonably request in order to facilitate the public sale or other disposition of the securities owned by the Holder;

 

d. use its best efforts to register and qualify the securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions as the Holder shall reasonably request, and do any and all other acts and things which may be necessary or advisable to enable the Holder to consummate the public sale or other disposition in such jurisdiction of the securities owned by the Holder, except that the Company shall not for any such purpose be required to qualify to do business as a foreign corporation in any jurisdiction wherein it is not so qualified or to file therein any general consent to service of process;

 

e. use its best efforts to list such securities on any securities exchange on which any securities of the Company is then listed, if the listing of such securities is then permitted under the rules of such exchange;

 

f. reserved;

 

g. notify the Holder of Registerable Securities covered by such registration statement, at any time when a prospectus relating thereto covered by such registration statement is required to be delivered under the 1933 Act, of the happening of any event of which it has knowledge as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; and

 

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h. furnish, at the request of the Holder (i) an opinion, dated such date, of the counsel representing the Company for the purpose of such registration, addressed to the to the Holder, covering such legal matters with respect to the registration in respect of which such opinion is being given as the Holder may reasonably request and are customarily included in such an opinion and (ii) letters, dated, respectively, (1) the effective date of the registration statement and (2) the date such Registerable Securities are delivered to the Holder, for sale pursuant to such registration from a firm of independent certified public accountants of recognized standing reasonably selected by the Company, addressed to the to the Holder, covering such financial, statistical and accounting matters with respect to the registration in respect of which such letters are being given as the Holder may reasonably request and are customarily included in such letters.

 

4. Expenses. All expenses incurred in any registration of the Holder’s Registerable Securities under this Agreement shall be paid by the Company, including, without limitation, printing expenses, fees and disbursements of counsel for the Company, expenses of any audits to which the Company shall agree or which shall be necessary to comply with governmental requirements in connection with any such registration, all registration and filing fees for the Holder’s Registerable Securities under federal and State securities laws, and expenses of complying with the securities or blue sky laws of any jurisdictions; provided, however, the Company shall not be liable for (a) any stock transfer taxes incurred with respect to Registerable Securities sold to the Holder or (b) the fees and expenses of counsel for any Holder, provided that the Company will pay the costs and expenses of Company counsel when the Company's counsel is representing any or all selling security holders.

 

5. Indemnification. In the event any Registerable Securities are included in a registration statement pursuant to this Agreement:

 

a. Company Indemnity. Without limitation of any other indemnity provided to the Holder, to the extent permitted by law, the Company shall indemnify and hold harmless the Holder, its affiliates, officers, directors and partners, any underwriter (as defined in the 1933 Act) for the Holder, and each person, if any, who controls the Holder or underwriter (within the meaning of the 1933 Act or the Securities Exchange Act of 1934 (the "Exchange Act"), against any losses, claims, damages or liabilities (joint or several) to which they may become subject under the 1933 Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a "Violation"): (i) any alleged untrue statement of a material fact contained in such registration statement including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the 1933 Act, the Exchange Act, or any state securities law or any rule or regulation promulgated under the 1933 Act, the Exchange Act or any state securities law, and the Company shall reimburse each such Holder, affiliate, officer or director or partner, underwriter or controlling person for any legal or other expenses incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company shall not be liable to the Holder in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such Holder or any other officer, director or controlling person thereof.

 

b. Holder Indemnity. The Holder shall indemnify and hold harmless the Company, its affiliates, its counsel, officers, directors and representatives, any underwriter (as defined in the 1933 Act) and each person, if any, who controls the Company or the underwriter (within the meaning of the 1933 Act or the Exchange Act, against any losses, claims, damages or liabilities (joint or several) to which they may become subject under the 1933 Act, the Exchange Act or any state securities law, and the Company shall reimburse each such Holder, affiliate, officer or director or partner, underwriter or controlling person for any legal or other expenses incurred by them in connection with investigating or defending any loss, claim, damage, liability or action; insofar as such losses, claims, damages or liabilities (or actions and respect thereof) directly arise out of any statements or information provided by the Holder to the Company expressly for use in connection with the offer or sale of Registerable Securities.

 

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c. Notice; Right to Defend. Promptly after receipt by an indemnified party under this Section 5 of notice of the commencement of any action (including any governmental action), such indemnified party shall, if a claim in respect thereof is to be made against any indemnifying party under this Section 5 deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in and if the indemnifying party agrees in writing that it will be responsible for any costs, expenses, judgments, damages and losses incurred by the indemnified party with respect to such claim, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if the indemnified party reasonably believes that representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Agreement only if and to the extent that such failure is prejudicial to its ability to defend such action, and the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Agreement.

 

d. Contribution. If the indemnification provided for in this Agreement is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the responsibility of the indemnifying party on the one hand and the indemnified party on the other hand in connection with the statements or omissions which resulted in such loss, liability, claim, damage or expense as well as any other relevant equitable considerations. The relevant fault of the indemnifying party and the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. Notwithstanding the foregoing, the amount the Holder shall be obligated to contribute pursuant to this Agreement shall be limited to an amount equal to the proceeds to such Holder of the Registerable Securities sold pursuant to the registration statement which gives rise to such obligation to contribute (less the aggregate amount of any damages which the Holder has otherwise been required to pay in respect of such loss, claim, damage, liability or action or any substantially similar loss, claim, damage, liability or action arising from the sale of such Registerable Securities).

 

e. Survival of Indemnity. The indemnification provided by this Agreement shall be a continuing right to indemnification and shall survive the registration and sale of any Registerable Securities by any person entitled to indemnification hereunder and the expiration or termination of this Agreement.

 

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6. Remedies.

 

a. Time is of Essence. The Company agrees that time is of the essence of each of the covenants contained herein and that, in the event of a dispute hereunder, this Agreement is to be interpreted and construed in a manner that will enable the Holder to sell its Registerable Securities as quickly as possible after the Holder has indicated to the Company that they desire its Registerable Securities to be registered. Any delay on the part of the Company not expressly permitted under this Agreement, whether material or not, shall be deemed a material breach of this Agreement.

 

b. Remedies Upon Default or Delay. The Company acknowledges the breach of any part of this Agreement may cause irreparable harm to the Holder and that monetary damages alone may be inadequate. The Company therefore agrees that the Holder shall be entitled to injunctive relief or such other applicable remedy as a court of competent jurisdiction may provide. Nothing contained herein will be construed to limit the Holder's right to any remedies at law, including recovery of damages for breach of any part of this Agreement.

 

c. Penalties. If any of the Registration Statements, the New Registration Statement, or the Second New Registration Statement is not filed timely in connection with Section 1, or (ii) the Company fails to file with the Commission a request for acceleration of such registration statement in accordance with Rule 461 promulgated by the Commission pursuant to the Securities Act, within five (5) Trading Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission that such registration statements will not be “reviewed” or will not be subject to further review, or (iii) prior to the effective date of such registration statements, the Company fails to file a pre-effective amendment and otherwise respond in writing to comments made by the SEC in respect of such registration statements within ten (10) Trading Days, after the receipt of comments by or notice from the SEC that such amendment is required in order for such registration statement(s) to be declared effective, or (iv) a registration statement registering for resale all of the Registrable Securities is not declared effective by the SEC by the time periods required in Section 1, or (v) after the effective date of a registration statement, such registration statement(s) ceases for any reason to remain continuously effective as to all Registrable Securities included in such registration statement(s), or the Holders are otherwise not permitted to utilize the Prospectus therein to resell such Registrable Securities, for more than ten (10) consecutive calendar days or more than an aggregate of fifteen (15) calendar days (which need not be consecutive calendar days) during any twelve (12)-month period (any such failure or breach being referred to as an “Event”, and for purposes of clauses (i) and (iv), the date on which such Event occurs, and for purpose of clause (ii) the date on which such five (5) Trading Day period is exceeded, and for purpose of clause (iii) the date which such fifteen (15) calendar day period is exceeded, and for purpose of clause (v) the date on which such ten (10) or fifteen (15) calendar day period, as applicable, is exceeded being referred to as “Event Date”), then, in addition to any other rights the Holder may have hereunder or under applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the ninetieth (90th) day from such Event Date, the Company shall pay to each Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to the product of one percent (1.0%) multiplied by the aggregate subscription amount paid by the Holder pursuant to the Purchase Agreement. Subsequent to the ninetieth (90th) day from such Event Date, the one percent (1%) penalty described in the foregoing sentence shall increase to two percent (2%), with an aggregate cap of twenty percent (20%) per annum. If the Company fails to pay any partial liquidated damages pursuant to this Section in full within seven (7) days after the date payable, the Company will pay interest thereon at a rate of eighteen percent (18%) per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The partial liquidated damages pursuant to the terms hereof shall apply on a daily pro rata basis for any portion of a month prior to the cure of an Event.

 

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7. Notices.

 

a. All communications under this Agreement shall be in writing and shall be mailed by first class mail, postage prepaid, or telegraphed or telexed with confirmation of receipt or delivered by hand or by overnight delivery service,

   

b. If to the Company, at:

 

Digital Power Corporation

48430 Lakeview Blvd.

Fremont, CA 94538-3158 

Attention: Milton C. Ault, III, Executive Chairman 

 

 

If to the Holder:

 

 

or at such other address as it may have furnished in writing to the Holder of Registerable Securities at the time outstanding, or

 

c. If to the Holder: to the address set forth on the signature page hereto or such other address as it may have furnished in writing to the Company;

 

d. Any notice so addressed, when mailed by registered or certified mail shall be deemed to be given three (3) days after so mailed, when telegraphed or telexed shall be deemed to be given when transmitted, or when delivered by hand or overnight shall be deemed to be given when delivered.

 

8. Successors and Assigns. Except as otherwise expressly provided herein, this Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the Holder.

 

9. Amendment and Waiver. This Agreement may be amended, and the observance of any term of this Agreement may be waived, but only with the written consent of the Company and the Holder; provided, however, that no such amendment or waiver shall take away any registration right of the Holder or reduce the amount of reimbursable costs to the Holder in connection with any registration hereunder without the consent of such Holder. No delay on the part of any party in the exercise of any right, power or remedy shall operate as a waiver thereof, nor shall any single or partial exercise by any party of any right, power or remedy preclude any other or further exercise thereof, or the exercise of any other right, power or remedy.

 

10. Counterparts; Attorney’s Fees. One or more counterparts of this Agreement may be signed by the parties, each of which shall be an original but all of which together shall constitute one and the same instrument. The prevailing party in any action or proceeding relating to or arising out of this Agreement shall recover its reasonable attorney’s fees and other costs from the non-prevailing party, in addition to any other relief to which such prevailing party is entitled.

 

11. Governing Law. This Agreement shall be construed in accordance with and governed by the internal laws of the State of New York, without giving effect to conflicts of law principles.

 

12. Invalidity of Provisions. If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby.

 

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13. Headings. The headings in this Agreement are for convenience of reference only and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof.

 

[Intentionally Blank]

 

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IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the 4th day of December 2017.

 

	
			DIGITAL POWER CORPORATION

				 	
			HOLDER

				 
	 	 	 	 	 	 
	
			 

				 	 	 	 	 
	
			By:

				 	 	
			By:

				 	 
	
			Name:

				
			Milton C. Ault III

				 	
			Name:

				
			 

				 
	
			Title:

				
			Executive Chairman

				 	
			Title:

				
			Managing Member

				 
	
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	 	 	 	 	 	 
	 	 	 	 	 	 
	
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	 	 	 	 

 

 

[SIGNATURE PAGE FOR REGISTRATION RIGHTS AGREEMENT]Exhibit 1023

		

			

		

		

			 

		

		
			MINISTRY PARTNERS SECURITIES LLC
		

		
			NETWORKING AGREEMENT
		

		
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			AGREEMENT made this 30th day of July, 2014, by and between Ministry Partners Securities LLC. (“MPS”) and America’s Christian Credit Union (hereinafter “ACCU”).
		

		
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			RECITALS
		

		
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			MPS is a SEC registered Broker-Dealer, a registered Investment Advisor and an Insurance Agency.

		
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				 B.
			

			
	
			
			MPS desires to provide members of ACCU various investment and insurance services.

		
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			NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
		

		
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			I.  Services.
		

		
			
		

		
			A. MPS agrees, during the term of this Agreement:
		

		
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			1. To place one or more registered and appointed investment representatives (each a “Representative”) in one or more designated business locations of ACCU, as hereinafter described. Representatives will be selected and supervised by MPS in cooperation with ACCU and consistent with policies and procedures established from time to time by the Board of Directors and Management of ACCU (e.g. as referenced in Section I.B.6. of this Agreement).
		

		
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			2.To accept, by and through the Representative(s), and to maintain or cause its clearing agent (to whom MPS introduces accounts and transactions on a fully disclosed basis) to maintain, cash, and/or margin accounts (each an “Account” and collectively “Accounts”), annuities, insurance products, general securities and mutual funds for members of ACCU in accordance with all applicable laws, regulations, rules and procedures, including without limitation those of the U.S. Securities and Exchange Commission (“SEC”), the Financial Industry Regulatory Authority (“FINRA”), and state securities and insurance regulatory agencies; 
		

		 

		

			 

		

 

		

			 

		

		provided, however, MPS in it’s reasonable business judgment, reserves the right to reject any Account or transaction and to terminate any Account previously accepted.
		

		
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			3. To accept and process securities transactions for the Accounts through the Representative(s), and perform account-opening and limited promotional functions through others, in accordance with, and complying with all respects of (1) rules and regulations applicable to MPS of the SEC, FINRA and state securities commissions, (2) federal and state credit union and ACCU laws, rules and regulations applicable to ACCU or MPS and (3) the December 2010 updated NCUA Letter 10-FCU-03 relating to the offering mutual funds, annuities and other nondeposit investments for sale to members through various types of arrangements.  (the “NCUA Letter 10-FCU-03”), as amended from time to time. The NCUA Letter 10-FCU-03 is incorporated herein by reference.
		

		
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			4.To confirm, or cause its clearing agent to confirm, to each Account the execution of each transaction for each such Account in accordance with all securities and credit unioning laws, rules and regulations.
		

		
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			5.To maintain, or cause it’s clearing agents to maintain, all books and records of all transactions executed for the Accounts and to prepare and mail to Accounts all required reports of transactions in accordance with all applicable securities and credit union laws, rules and regulations. Such reports shall be separate from statements sent by ACCU to its members relating to deposit accounts, loans and transactions.
		

		
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			6.To be responsible, alone or with its clearing agent, for all cashiering functions for the Accounts, including the receipt and delivery of member securities, making and receiving payments therefore and holding in custody and safekeeping all securities.
		

		
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			7.To disclose to Accounts in a clear and conspicuous manner that securities and other non-insured investments are not ACCU deposits and are not an obligation of, or guaranteed by ACCU, are not insured or guaranteed by the NCUA/NCUSIF or any other governmental agency, and are subject to investment risk, including all possible loss of principal amount invested. MPS may further advise members that certain securities products may be covered by securities account insurance. Such disclosures shall be made: (1) orally during any sales presentation; (2) orally when investment advice concerning Non-deposit investment account is opened to purchase Non-deposit investment products is given; and (3) orally and in writing prior to or at the time an investment account is opened to purchase Non-deposit investment products, and in all advertising and promotional materials. MPS must have members purchasing non-insured products sign a statement acknowledging the members have read and understand these written disclosures.
		

		
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			8.To submit to ACCU all advertising and promotional materials used by MPS in the office space being provided, and any advertising or promotional material which directly or indirectly refers to ACCU for review and approval (which shall not be unreasonably withheld) before use and distribution.
		

		

		

		 

		

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			9.To allow ACCU to monitor MPS and periodically review MPS’s activities to ensure that MPS and its Representatives are complying with this Agreement.
		

		
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			10.To allow ACCU and regulatory authorities access to records of MPS and to evaluate compliance with this Agreement and applicable laws and rules.
		

		
			
		

		
			11.To only offer products and services that have been approved by ACCU
		

		
			Management and/or the ACCU Board. All new products must be approved by the MPS New Products Committee. Prior to use with ACCU clientele, ACCU must respond in writing the MPS can offer the “new product” to ACCU clients and prospects. IN ALL CASES, MPS PRODUCT RECOMMENDATIONS TO ACCU CLIENTS MUST BE SUITABLE BASED UPON THE CLIENT’S SPECIFIC CIRCUMSTANCES.
		

		
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			B.ACCU agrees, during the term of this Agreement:
		

		
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			1.To designate and maintain for use by MPS a suitable space in a physical location distinct from the area where retail deposits are taken, approved by MPS for the performance of MPS services as described above (the “Offices”). ACCU will provide all utilities, telephone and custodial service. ACCU agrees that MPS’s name will be prominently displayed on a continuous basis in the Offices in a manner agreed upon by ACCU and by MPS, provided any such display will conform to applicable securities and credit unioning laws, rules and regulations and the NCUA Letter 10-FCU-03.
		

		
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			2.To promote the services of MPS in a form and frequently mutually agreed between MPS and ACCU. Advertising and promotional materials used by ACCU, to promote the services of MPS, shall disclose the identity of MPS, as well as the fact that investment products are not products of or sponsored or endorsed by ACCU, are not federally insured and are subject to risk of loss, including loss of principal amount invested. All such advertising and materials shall comply with the NCUA Letter 10-FCU-03 and shall be submitted for review and approval (which shall not be unreasonably withheld) before use and distribution.
		

		
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			3.To provide such ministerial services as listed: receptionist, message center, non-exclusive use of light, water, air conditioning; janitorial; telephone (except long-distance services) for MPS to restrict its non-licensed employees’ activities to performance of ministerial functions only, unless otherwise permitted by law, rule or applicable interpretation.
		

		
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			4.To permit personnel from regulatory authorities and appointed supervisory personnel of MPS to enter the Offices to make audits and examinations of records pertaining to MPS activities as required by application laws and regulations.
		

		
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			5.That supervision of the Investment services provided shall be under the sole control of, and shall be the responsibility of MPS. However, MPS acknowledges that 
		

		 

		

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		ACCU’s management must be fully apprised of all activities to be conducted by MPS within ACCU’s offices, and that all such activities will be conducted in cooperation with and be monitored by ACCU’s management. Client complaints, if any, will be reported to both MPS AND ACCU Management within 24 hours of receipt. In addition, any resolutions to client complaints will be discussed with ACCU Management prior to implementation.
		

		
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			6.To have a written policy statement, adopted by ACCU’s Board of Directors, which addresses the risks associated with MPS sales program in accordance with the NCUA Letter 10-FCU-03, which identifies (1) compliance procedures, (2) permissible use of member information, (3) potential conflicts of interest and how such conflicts will be addressed, (4) how member complaints will be resolved, (5) the criteria governing the selection and review of products being offered, (6) supervision of personnel, (7) designation of sales personnel, (8) the risks associated with the sales program, and (9) other matters contemplated by the NCUA Letter 10-FCU-03.
		

		
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			II. Representation, Warranties and Additional Covenants
		

		
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				 A.
			

			
	
			
			MPS represents, warrants and covenants as follows:

		
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			1.MPS is a corporation duly organized, validly existing and in good standing under the laws of the state of Calfornia and duly qualified to conduct business in the state where the Offices are located. The execution and performance of this Agreement constitutes a valid obligation binding upon MPS.
		

		
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			2.MPS is a member in good standing of the FINRA.
		

		
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			3.MPS is, and during the term of this Agreement shall remain, licensed and in good standing as a marketing company under applicable federal and state laws.
		

		
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			4.MPS will enforce and take necessary steps to assure that Representatives(s), and others engaged in limited business activities for MPS, follow the policies, procedures, reasonable guidelines and instructions of both MPS and ACCU as may, from time to time, be necessary to provide for compliance with this Agreement and the competent and proper performance of securities brokerage services at the Offices.
		

		
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			5.MPS will not represent to any members or prospective members that it is in any way acting on behalf of the ACCU, or that any of the investment securities are federally insured or otherwise without risk. 
		

		
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			6.MPS shall keep confidential any information not otherwise generally available to the public, which it may acquire as a result of this Agreement regarding the business and affairs of ACCU and its members. In addition, MPS will only use ACCU client information in a manner consistent with, and in full knowledge of, the agreed upon marketing 
		

		 

		

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		plan created by ACCU and MPS Management. This will generally include e-mail marketing, mailings, brochures, marketing materials, telephone contact numbers, and on-site visits. MPS will not disclose any ACCU client information to a third party without written consent.
		

		
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			7.MPS has requisite authority, and is permitted under applicable federal and state laws, rules and regulations, to enter into performance obligations under the Agreement and in accordance with its terms.
		

		
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			8.MPS will comply with all applicable laws and regulations and will act consistently with the NCUA Letter 10-FCU-03, including provisions relating to member disclosures.
		

		
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			9.MPS will notify and cooperate with the ACCU regarding litigation, investigations or other proceedings brought by federal or state regulatory authorities related to the business of MPS on the premises.
		

		
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			B.ACCU represents, warrants and covenants as follows:
		

		
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			1. ACCU is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. The execution, delivery and performance of this Agreement has been approved by all required corporate action, and when executed and delivered, this Agreement constitutes a valid obligation binding on the ACCU.
		

		
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			2.ACCU has all the requisite authority, and is permitted under all applicable laws and regulations, to enter into and perform its obligations under this Agreement in accordance with its terms.
		

		
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			3.ACCU shall not, without the written approval of MPS, prepare or deliver to a member any records regarding any Account or any transaction in any Account.
		

		
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			4.During the course of this Agreement, ACCU will not offer or promote investment services of the type contemplated by this Agreement or similar thereto through or by any person or entity other than MPS.
		

		
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			5.ACCU will not represent that ACCU’s services or its account deposit insurance coverage are in any way connected with MPS services.
		

		
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			6.ACCU will keep confidential any information not generally available to the public which it may acquire as a result of this Agreement regarding the business and affairs of MPS.
		

		
			7.That ACCU’s Board of Directors has reviewed this Agreement and approved its terms.
		

		
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		8.ACCU will notify and cooperate with MPS in connection with investigations or proceedings brought by federal or state regulatory authorities related to the business of MPS on the premises.
		

		
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			III. Indemnification
		

		
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			Each party hereto shall indemnify and hold the other harmless and the other’s agents, employees or affiliates from and against any losses, claims, damages, liabilities or expenses (which shall include, but not limited to, all costs of defense and investigation and all reasonable attorney fees) so which the other may become subject, insofar as such losses, claims, damages, liabilities or expenses arise out of or are based upon the following:
		

		
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			1.The negligence or willful misconduct of indemnitor or its representative(s) or its employees; or
		

		
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			2.The indemnitor’s failure to perform its obligations, or breach of its representations and warranties, under this Agreement.
		

		
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			IV. Relationship and Responsibilities of Parties.
		

		
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			MPS and ACCU agree that:
		

		
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			1.When offering and selling MPS services and products, or performing account opening promotional functions and other activities under this Agreement, Representative(s), and others performing limited business activities for MPS, represent MPS, not ACCU, and MPS is solely responsible for supervising Representative(s) and other employees’ activities involving the opening of accounts, promotional activities and offer and sale of MPS services and products. Notwithstanding the foregoing, MPS shall assure  Representative(s), and others performing services, comply with all practices, policies and procedures established by ACCU and designed to assure all such activities are conducted in compliance with the NCUA Letter 10-FCU-03 and all laws, rules and regulations applicable to ACCU.
		

		
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			2.Any trademark, servicemark, tradename, or logo developed by MPS shall be the property of MPS. Upon termination of this Agreement, ACCU shall not have the right to use any private label trademark developed by MPS. Any trademark, servicemark, tradename, or logo developed by ACCU shall be the property of ACCU. Upon termination of this Agreement, MPS shall not have the right to use any private label trademark developed by ACCU. This provision shall survive termination of this Agreement.
		

		
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			V. Designated Locations; Fees.
		

		
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				 1.
			MPS and ACCU designate the following credit union facility of ACCU as a location at which Offices will be made available to MPS as contemplated herein:

		
			
		

		
			Americas Christian Credit Union (Main Office)
		

		
			2100 East Route 66
		

		
			Glendora, CA 91740
		

		
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			In addition, MPS and ACCU may hereafter agree to additional such facilities at which Offices will be made available to MPS.  See Appendix A.
		

		
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			2.In consideration for providing the Offices and the services described in Section I.B. hereof, ACCU shall be entitled to monthly payments by MPS equal to twenty-five percent of the “gross revenues” produced by MPS with respect to transactions executed on behalf of the Accounts of MPS at ACCU, payable monthly in arrears.
		

		
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			VI. Term and Termination
		

		
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			1.  This agreement shall take effect on the date first above written and shall be effective for a one-year period after the date hereof and shall renew for successive one-year periods thereafter, provided that if either party gives notice of termination (with or without cause) to the other party at least thirty (30) days prior to the expiration of the then term, then this Agreement shall terminate at the end of such term. This Agreement may also be terminated by either party immediately upon notice to the other party if the other party materially breaches this Agreement. Failure by MPS to properly supervise its sales representatives adequately will cause ACCU to immediately terminate the Agreement. 
		

		
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			2.Upon termination of this Agreement (i) ACCU shall immediately cease representing itself as offering investment services through MPS, discontinue use of all MPS Materials and all materials bearing MPS’s name, logo or servicemark, return to MPS any equipment, signs, materials, logos or servicemarks, from any such items purchased by ACCU and (ii) MPS shall immediately cease representing itself as offering investment services at the ACCU’s Location, discontinue use of all the ACCU’s materials and all materials bearing ACCU’s name, logo or servicemark, return to ACCU any; equipment, signs, materials, logos or servicemarks, from any such items purchased by MPS.
		

		
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			VII. Notices.
		

		
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			Notices under this Agreement shall be directed to the principal office addresses of MPS and ACCU, as set forth below:
		

		
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						      Ministry Partners Securities LLC

					
						      Attn: President and CEO

					
						      915 W. Imperial Highway, Ste. 120

					
						Brea, CA 92821

					
					
						Americas Christian Credit Union

					
						Attn: President and CEO

					
						2100 East Route 66

					
						Glendora, CA 91740

				

		
			
		

		
			IN WITNESS WHEREOF, the undersigned have executed the foregoing Networking Agreement as of the day and year first above written.
		

		
			
		

		
			Ministry Partners Securities LLC (“MPS”)
		

		
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			Date: July 31, 2014Signature:/s/ Joseph Turner         Joseph Turner
		

		
			     President and Chief Executive Officer
		

		
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			America’s Christian Credit Union (“ACCU”)
		

		
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			Date: July 31, 2014Signature: /s/Mendell L. Thompson
		

		
			      Mendell L. Thompson                                  President & Chief Executive Officer
		

		
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			Appendix A:  ACCU Branch Locations
		

		
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						California Headquarters

					
						ACCU
2100 East Route 66

					
						Glendora, CA 91740

					
						 

					
						Brea Branch

					
						ACCU

					
						251 S. Randolf Avenue

					
						Brea, CA 92821

					
						Azusa Branch

					
						ACCU

					
						924 E. Alosta Avenue

					
						Azusa, CA 91702

				

		
			 
		

		

		

		 

		

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			915 W. Imperial Highway

		

		

			Suite 120

		

		

			Brea,  CA 92821

		

		

			 

		

		December 1, 2016
		

		
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			Mrs. Nicolette Harms
		

		
			Chief Financial Officer
		

		
			Americas Christian Credit Union
		

		
			2100 E. Route 66
		

		
			Glendora, CA 91740
		

		
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			RE: Addendum to Networking Agreement dated July 30, 2014
		

		
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			Dear Nicki,
		

		
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			The purpose of this letter is to formalize our previous conversation on modifying Section V, Item 2 of the networking agreement between Americas Christian Credit Union and Ministry Partners Securities LLC.
		

		
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			Effective January 1, 2017, as consideration for providing the Offices and the services described in Section 1.B. in the aforementioned Networking Agreement, ACCU shall be entitled to monthly payments by MPS equal to twenty percent (20%) of the “gross revenues” produced by MPS with respect to transactions executed on behalf of accounts of MPS for members of Americas Christian Credit Union, payable monthly in arrears.
		

		
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			Furthermore, Ministry Partners Investment Company proprietary notes, which are distributed by Ministry Partners Securities LLC and sold to ACCU members, will now generate ongoing Assets Under Management (AUM) fees to MPS, and via the networking agreement, to Americas Christian Credit Union as defined above. As such, the total proprietary note Assets Under Management for all ACCU members will be calculated and reported on a monthly basis as part of your networking fee statement.
		

		
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			By signing below, both ACCU and MPS hereby agree to the terms outlined in this Addendum to the Networking Agreement executed on July 31, 2014.
		

		
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			/s/Joseph W. Turner, Jr./s/ Nicolette Harms
		

		
			Joseph W. Turner, Jr., President/CEONicolette Harms, CFO
		

		
			Ministry Partners Securities LLCAmericas Christian Credit Union
		

		
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