Document:

Amended and Restated Managing Broker Agreement

		

			 

		

		
			MINISTRY PARTNERS INVESTMENT COMPANY, LLC 
		

		
			  
		

		
			MANAGING BROKER AGREEMENT 
		

		
			   
		

		
			   
		

		
			____________________, 2018 
		

		
			   
		

		
			   
		

		
			Ministry Partners Securities, LLC 
		

		
			915 W. Imperial Highway 
		

		
			Suite 120  
		

		
			Brea,  California 92821  
		

		
			   
		

		
			Ladies and Gentlemen: 
		

		
			   
		

		
			Ministry Partners Investment Company, LLC, a California limited liability company (the “Company”), intends to, subject to the terms and conditions set forth in this agreement (the “Agreement”), issue and sell to the public $90,000,000 of its Class 1A Notes, in two series, consisting of a Fixed Series and Variable Series in several categories (the “Notes”) in an offering (the “Offering”) registered under the Securities Act of 1933, as amended (the “1933 Act”) and registered in selected states (the “Blue Sky States”).   
		

		
			On December 8, 2017, the Company filed with the U.S. Securities and Exchange Commission (the “Commission”), a Registration Statement, as subsequently amended, which registration was declared effective by the Commission on __________, 2018 and is effective in those Blue Sky States listed on Schedule I attached hereto, which is hereby incorporated by reference.   
		

		
			   
		

		
			Under the terms of the Offering, the Company is offering the Notes for sale to the public on a best efforts basis through its wholly-owned subsidiary, Ministry Partners Securities, LLC, a Delaware limited liability company (“MP Securities”). MP Securities has been registered as a broker-dealer firm under the provisions of Section 15(b) of the Securities Exchange Act of 1934 (the “1934 Act”) and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”).  
		

		
			   
		

		
			Accordingly, the Company has named MP Securities as the managing broker (“MB”) in the Prospectus. MP Securities will also act as the selling agent for the Offering.  For purposes of this Agreement, the term “Registration Statement” means the registration statement filed by the Company with the Commission that describes the Offering of the Notes for sale to the public.  The term “Prospectus” means the basic prospectus included in the Registration Statement at the time the Registration Statement is declared effective by the Commission, together with any prospectus supplement of and Post-Effective Amendments thereto, each in the form furnished to the Commission pursuant to Rule 424 under the 1933 Act, by the Company for use in connection with the offering of the Notes. 
		

		
			   
		

		
			Subject to the terms and conditions set forth in this Agreement, the Company hereby confirms its engagement of MP Securities as MB pursuant to which MP Securities will render services to the Company as MB for the offering and sale of the Notes as provided in this Agreement.  MP Securities will act as the MB to sell the Notes on a best-efforts basis.  MP Securities hereby accepts its appointment upon terms and conditions set forth in this Agreement.  Nothing in this Agreement shall require MP Securities to purchase any of the Notes in the Offering. 
		

		
			   
		

		

		

		 

		

			 

		

 

		

			 

		

		1.    Appointment of Managing Broker. The Company hereby appoints MP Securities to act as the MB of the Offering. MP Securities will also serve as the selling agent for the Company in the Offering.  
		

		
			   
		

		
			2.    The Offering.   
		

		
			   
		

		
			(a)Terms of the Offering.   
		

		
			   
		

		
			(i)    Certain terms of the Offering are as follows: 
		

		
			   
		

		
			(1)    Qualification of the Trust Indenture with respect to the Notes under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), will be required in connection with the offer, issuance, sale, or delivery of the Notes; 
		

		
			   
		

		
			(2)    There are minimum investment requirements for Notes as offered by the Prospectus that must be satisfied before the Company may close the sale of a Note in the Offering; 
		

		
			   
		

		
			(3)    Investors may purchase Notes through a licensed participating broker-dealer; 
		

		
			   
		

		
			(4)    The Company may elect to hold more than one closing for the sale of Notes; 
		

		
			   
		

		
			(5)    The Offering will terminate at the earlier of (A) the sale of all of the Notes being offered in the Offering, or (B) December 31, 2020, the expiration date of the Offering; and 
		

		
			   
		

		
			(6)    The Company may, in its sole discretion, at any time, or from time to time, suspend the sale of one or more Categories or Category Series of a Note or Notes, or terminate the Offering. 
		

		
			   
		

		
			(ii)    The final terms of the Notes to be issued by the Company and of the Offering will be determined by the Company as set forth in a Registration Statement and Prospectus, which the Company will prepare for distribution to prospective purchasers of Notes in the Offering. 
		

		
			   
		

		
			(b)Nature of Offering.  The Offering will be made by the MB on a “best efforts basis.” During the term of this Agreement, the MB shall use its reasonable best efforts to (i) identify potential investors, (ii) furnish such potential investors, on behalf of the Company, with copies of the Prospectus, and (iii) assist the Company with the sale of Notes at each closing. Notwithstanding any contrary provision of this Agreement, MP Securities will have no liability to the Company or any other person for its failure to identify one or more prospective investors in the Offering or the failure of the Company to sell any or all of the Notes being offered for sale in the Offering. 
		

		
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			3.    Managing Broker Compensation and Costs.  In consideration for the performance of the services hereunder, the Company hereby agrees to pay to MP Securities the fees as outlined below: 
		

		
			 
		

		

		

		 

		

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			(a)Sales Commission.  When a Class 1A Note is purchased under the Offering, a sales commission equal to 1% of the aggregate amount of a Note purchased will be paid to MP Securities.  The 1% sales commission will be assessed on any purchase of a Class 1A Note, including reinvestments made by investors that may have previously purchased a publicly offered debt security from the Company.
		

		
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			(b)  Account Servicing Fee.  As compensation for services to be rendered under this Agreement, MP Securities shall be entitled to receive from the Company an account servicing fee (“Account Servicing Fee”) specified in Exhibit A which is hereby incorporated by reference.    The Company may, in its sole discretion, change the Account Servicing Fee payable for the sale of any Note, Note Category or Note Category Series at anytime, or from time to time, so long as the total Account Servicing Fee payable on the Notes  (including the 1% Sales Commission paid on the purchase) does not exceed 5.5% after giving effect to any such change. The foregoing notwithstanding, however, no change of the Account Servicing Fee amount shall apply to a Note sale that occurs prior to the time Company gives notice of such change to MP Securities. 
		

		
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			(c)Due Diligence Fee.  The Company agrees to pay to MP Securities a non-accountable due diligence fee of $9,000.  
		

		
			  
		

		
			(d)Obligation to Pay.  The Company is not obligated to pay compensation to MP Securities  with respect to any sale of the Notes unless and until such time as a closing for that sale has occurred and the Company has received the proceeds from such sale. 
		

		
			  
		

		
			(e)Costs.  It is acknowledged and agreed that the Company shall bear all costs and expenses incident to the issuance, offer, sale and delivery of the Notes.  These costs and expenses will include but are not limited to state “Blue Sky” fees, legal fees, printing costs, travel costs, mailing, couriers, personal background checks, and other expenses incidental to the advancement and completion of the Offering. 
		

		
			  
		

		
			(f)Acknowledgment and Agreement Regarding Underwriting Compensation. The Company and MP Securities acknowledges and agrees that it will pay to MP Securities the following estimated maximum amounts which are deemed to be Underwriting Compensation under FINRA Rule 2310(b)(4)(C) and (D) which total $5,737,496. 
		

		
			  
		

		
			Commissions and/or Account Servicing Fees of $4,950,000 (as provided in (a) above) pursuant to Rule (b)(4)(C)(ii)(a); 
		

		
			Non-transaction based compensation of $299,799 allocated to FINRA members pursuant to Rules (b)(4)(C)(ii)(c) and (b)(4)(D); 
		

		
			Dual-employee non-transaction-based compensation of $478,697 allocated to dual employees pursuant to Rule (b)(4)(C)(i); 
		

		
			Due diligence fees of $9,000 (including those paid pursuant to (b) above) pursuant to Rule (b)(4)(C)(iii); 
		

		
			For an estimated maximum total of $5,737,496 Underwriting Compensation under Rule 2310(b)(4)(C) and (D). 
		

		
			   
		

		
			The Company and the MB hereby confirm that the Company has not paid, and will not pay, to the MB, and that the MB has not received, and will not receive from the Company or any of its other Affiliates, any non-cash consideration in connection with this Agreement or pursuant to any other agreement for financing, investment and/or advisory services within the 180-day period preceding the effective date of the Offering or within the 90-day period following such effective date. 
		

		

		

		 

		

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			4.    Representations and Warranties of the Company.  The Company represents and warrants to, and agrees with, MP Securities that: 
		

		
			   
		

		
			(a)No Stop Order or Suspension.  The Registration Statement has become effective; no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purposes are pending before or, to the knowledge of the Company is threatened by the Commission, or any state regulatory authority which would prevent the use of the Registration Statement or Prospectus in connection with the Offering; 
		

		
			   
		

		
			(b)Disclosures in Registration Statement. At the time of effectiveness of the Registration Statement (or at the effective time of any post-effective amendment to the Registration Statement) and at all times subsequent thereto up to a closing of the sale of a Note, the Registration Statement and the Prospectus contained or will contain all material statements that are required to be stated therein in accordance with the 1933 Act and the regulations promulgated thereunder (the “Regulations”), and did or will, in all material respects, conform to the requirements of the 1933 Act and the Regulations. On the last effective date and at the time of the Note sale, the Registration Statement will not, and on such closing date will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading; on the date of any filing pursuant to Rule 424(b) and on such closing date, the Prospectus (together with any supplement thereto) will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; 
		

		
			   
		

		
			(c)Authority.  No authorization, approval, or permit of or from, or declaration or filing with, any governmental authority, any court or other tribunal, is required by the Company for the execution, delivery, or performance of this Agreement by the Company or the sale of the Notes in the Offering by the Company, except as required by FINRA or required under applicable state securities laws, which have been or will be made by the time required by such laws; 
		

		
			   
		

		
			(d)No Material Loss.  The Company has not sustained any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or action, order or decree of any governmental entity; and, since the date as of which information is given in the Prospectus, there has not been any material change in the ownership or long-term debt of the Company or any material adverse change, or any development that may cause a prospective material adverse change, in or affecting the general affairs, management, financial position, business prospects or results of operations of the Company, otherwise than as set forth or contemplated in the Prospectus; 
		

		
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			(e)Valid Existence.  The Company has been duly formed and is validly existing as a limited liability company in good standing under the laws of the State of California, with power and authority to own its properties and conduct its business as described in the Prospectus; 
		

		
			   
		

		
			(f)Trust Indenture Binding. The Trust Indenture (assuming due execution and delivery thereof by the trustee) is and the Notes (when executed by the Company and authenticated in accordance with the Trust Indenture) will be, the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as limited by equitable principles, bankruptcy, reorganization or other similar laws relating to or affecting the enforcement of creditor’s rights generally; 
		

		
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		 (g) Notes will be Binding Obligations.  The Notes are validly authorized and, when issued and delivered in accordance with the Prospectus, will be validly issued, fully paid, and non-assessable and will not be issued in violation of any preemptive rights. The Notes and Trust Indenture conform in all material respects to the descriptions relating thereto contained in the Prospectus; 
		

		
			   
		

		
			(h)No Prohibition.  No consent of any party to any contract, agreement, instrument, lease, license, or arrangement to which the Company is a party, or to which any of its properties or assets are subject, is required for the execution, delivery, or performance of this Agreement or the Trust Indenture.  The Company’s execution, delivery, or performance of this Agreement and the Trust Indenture and sale of the Notes in the Offering (i) will not violate, result in a breach of, or conflict with, or (with or without the giving of notice or the passage of time or both) entitle any party to terminate or call a default under, any agreement to which the Company is a party or to which the Company or any of its assets are subject; (ii) will not violate, result in a breach of, or conflict with any term of the certificate of formation or operating agreement; (iii) will not result in the creation or imposition of any lien, charge, or encumbrance upon any property or assets of the Company; and (iv) will not violate, result in a breach of, or conflict with any law, rule, regulation, order, judgment, or decree binding on the Company or any of its assets; 
		

		
			   
		

		
			(i)No Litigation.  There is no litigation or governmental proceeding pending or, to the Company’s knowledge, threatened against, or involving the Company or any of its properties, except as may be set forth in the Prospectus; 
		

		
			   
		

		
			(j)No Breach.  The Company is not in breach of, or in default under, any term or provision of any indenture, mortgage, deed of trust, lease, note, loan, or credit agreement, or any other agreement or instrument evidencing an obligation for borrowed money, or any other material agreement or instrument to which it is a party or by which it or any of its properties may be bound.  The Company is not in violation of any provision of its certificate of formation or operating agreement, any franchise, license, permit, judgment, decree, or order, or any statute, rule, or regulation, except for any violation which would not reasonably be expected to have a material adverse effect on the Company or any of its properties or assets; 
		

		
			   
		

		
			(k)Adequacy of Records.  The Company makes and keeps books and records and maintains internal accounting controls that provide reasonable assurance that: (i) transactions are executed in accordance with management’s authorization, (ii) transactions are recorded as necessary to permit preparation of its financial statements and to maintain accountability for its assets, and (iii) access to its assets is permitted only in accordance with management’s authorization; and 
		

		
			   
		

		
			(l)No Other Engagements.  Neither the Company nor any of its owners, managers, directors, officers, employees, representatives, or agents has engaged any placement agent, underwriter, 
		

		
			broker, finder, or other similar person with respect to the Offering other than as described in the Registration Statement and Prospectus. 
		

		
			   
		

		
			5.    Covenants and Agreements of the Company.  The Company agrees with MP Securities: 
		

		
			   
		

		
			(a)Copies of Prospectus.  To furnish MP Securities with copies of the Prospectus in such quantities as MP Securities may from time to time reasonably request, and, if any event shall have occurred as a result of which the Prospectus would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary to amend or supplement the Prospectus, to notify MP Securities and upon MP Securities’ request to prepare and furnish without charge to MP Securities as many copies as 
		

		 

		

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		MP Securities may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect compliance; 
		

		
			   
		

		
			(b)Copy of Amendments, Supplements.  To make no amendment or any supplement to the Prospectus unless MP Securities is given a copy of such proposed amendment or supplement; to advise MP Securities, promptly after it receives notice thereof, of the issuance by any state, federal or other regulatory authority of any stop order or of any order preventing or suspending the use of any Prospectus, of the suspension of the qualification of the Notes for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by any regulatory authority for the amending or supplementing of the Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of the Prospectus or suspending any such qualification, promptly to use its best efforts to obtain the withdrawal of such order; 
		

		
			   
		

		
			(c)Use of Proceeds.  To use the net proceeds received by it from the sale of the Notes pursuant to this Agreement in the manner specified in the Prospectus under the caption “Use of Proceeds”; 
		

		
			   
		

		
			(d)Disclosure of Material Change.  There has been no material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, except as set forth in the Prospectus; 
		

		
			   
		

		
			(e)Disclosure of Regulatory and Legal Proceedings.  There are no legal or governmental proceedings pending or, to the knowledge of the Company, threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject (i) other than proceedings accurately described in all material respects in the Prospectus and proceedings that would not have a material adverse effect on the Company and its subsidiaries, taken as a whole, or on the power or ability of the Company to perform its respective obligations under this Agreement, the Indenture, or the Notes or to consummate the transactions contemplated by the Prospectus or (ii) that are required to be described in the Registration Statement or the Prospectus and are not so described; and there are no statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement that are not described or filed as required; 
		

		
			   
		

		
			(f)The Investment Company Act of 1940.  The Company is not, and after giving effect to the offering and sale of the Notes and the application of the proceeds thereof as described in the Prospectus, the Company will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended; 
		

		
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			(g)Title to Property.  Except as described in the Prospectus, (i) the Company has good and marketable title to all real property and good and marketable title to all personal property it owns and all mortgage notes and debt securities it owns which are material to its business, taken as a whole.  In each case, the Company has ownership free and clear of all liens, encumbrances and defects except those which do not materially affect the value of such property and do not materially interfere with the use made, and proposed to be made, of such property by the Company; and (ii) any real property and buildings held under lease by the Company are held by it under valid, subsisting and enforceable leases with such exceptions as are not material to the Company and do not materially interfere with the use made and proposed to be made of such property and buildings by the Company; 
		

		
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			(h)Regulatory Authorizations.  The Company possesses all certificates, authorizations and permits issued by the appropriate federal, state or other regulatory authorities necessary to conduct its 
		

		 

		

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		business as presently conducted, except as described in the Prospectus or where the failure to possess such certificates, authorizations and permits would not, singly or in the aggregate, have a material adverse effect on the Company, taken as a whole; and no officer or representative of the Company has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a material adverse effect on the Company, taken as a whole, except as described in the Prospectus; 
		

		
			   
		

		
			(i)Financial Statements.  The consolidated financial statements of the Company and the related notes thereto included in the Registration Statement and the Prospectus comply in all material respects with the applicable requirements of the 1933 Act and the related rules and regulations of the Commission; present fairly in all material respects the financial position of the Company and its consolidated subsidiaries as of the dates indicated and the results of operations and cash flows of the Company and its consolidated subsidiaries for the periods specified; and have been prepared in conformity with U.S. generally accepted accounting principles applied on a consistent basis throughout the periods covered thereby (except as noted therein); and 
		

		
			   
		

		
			(j)Disclosure of Relationships.  No relationship, direct or indirect, exists between the Company or any of its owners, managers, directors, officers, employees, representatives, or agents that is required by the 1933 Act to be described in the Prospectus and that is not so described in the Prospectus. 
		

		
			   
		

		
			6.    Representations and Warranties of Managing Broker.  MP Securities represents and warrants to, and agrees with, the Company that: 
		

		
			   
		

		
			(a)Valid Existence.  MP Securities is duly organized and in good standing in its jurisdiction of origin. MP Securities holds all governmental authorizations, approvals, and permits necessary to conduct its business and to perform its obligations under this Agreement; 
		

		
			   
		

		
			(b)Authority.  MP Securities has the requisite power and authority to execute, deliver, and perform its obligations under this Agreement.  This Agreement has been duly authorized, executed, and delivered by MP Securities and is the legal, valid, and binding obligation of MP Securities and enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting creditors’ rights generally, and general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); 
		

		
			 
		

		
			(c)Registered Broker-Dealer.  MP Securities is a broker-dealer registered with the Securities and Exchange Commission under the 1934 Act , is a member in good standing of FINRA, and 
		

		
			is registered and/or qualified to act in each jurisdiction in which it is required to be registered and/or qualified to conduct its business and to perform its obligations under this Agreement; 
		

		
			 
		

		
			(d)Only Section 3 Provided Compensation.  MP Securities acknowledges and agrees that, except as otherwise provided in Section 3 above, it shall not be entitled to any fee, commission, or other compensation for any capital raised by the Company or any of its affiliates through the sale of Notes in the Offering; and 
		

		
			   
		

		
			(e)Information Provided.  All information provided by or on behalf of MP Securities for inclusion in the Prospectus does not and shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 
		

		
			   
		

		

		

		 

		

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		7.    Covenants and Agreements of Managing Broker.  In connection with its appointment as MB for the Offering, MP Securities covenants and agrees to: 
		

		
			   
		

		
			(a)Abide by this Agreement.  Honor and abide by the provisions contained in this Agreement; 
		

		
			   
		

		
			(b)Assistance to Company.  Collaborate with the Company and assist the Company in carrying out the terms and conditions of the Offering;  
		

		
			   
		

		
			(c)Best Efforts.  Exercise its best efforts to comply with the subscription procedures and plan of distribution set forth in the Prospectus; 
		

		
			   
		

		
			(d)Periodic Review.  Periodically review executed subscription agreements entered into by the Company for the sale of Notes in connection with the Offering; 
		

		
			   
		

		
			(e)  Fidelity Bond.  Maintain a fidelity bond in the minimum amount of $120,000; 
		

		
			   
		

		
			(f)Insurance.  Maintain general commercial liability insurance policy in an amount reasonably acceptable to it and the Company and continue to maintain such policy during the term of this Agreement; 
		

		
			   
		

		
			(g)FINRA Filings.  Be primarily responsible for any necessary Rule 5110 FINRA filings regarding compensation arrangements of the MB by reason of the Offering; and 
		

		
			   
		

		
			(h)Retain Copies of Purchase Documents.  Maintain copies of all the Purchase Applications, checks, sales confirmations, transaction blotter and records it receives from the Company or maintains as the selling agent, as may be required under applicable FINRA rules and regulations. 
		

		
			   
		

		
			8.    Sales Procedures.  The Company and MP Securities agree to cooperate with each other in carrying out the subscription procedures and selling procedures described in the “Plan of Distribution” section of the Prospectus and the summary attached hereto as Exhibit C.  
		

		
			   
		

		
			9.    Indemnification.   
		

		
			   
		

		
			(a)Indemnification of Managing Broker.  
		

		
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			(i)    General. Subject to the conditions set forth below the Company agrees to indemnify and hold harmless the MB that participates in the offer and sale of the Notes and each of its respective directors, officers, partners and employees and each person, if any, who controls any such entity (“Controlling Person”) within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, and its counsel, against any and all loss, liability, claim, damage and expense whatsoever (including but not limited to any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out of any action between of the MB and the Company or between the MB and any third party or otherwise) to which they or any of them may become subject under the 1933 Act, the 1934 Act or any other foreign, federal, state or local statute, law, rule, regulation or ordinance or at common law or otherwise or under the laws, rules and regulation of foreign countries, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in (i) the Registration Statement, or the Prospectus (as from time to time each may be amended and 
		

		 

		

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		supplemented); (ii) in any post-effective amendment or amendments or any new registration statement and prospectus relating to any of the Notes; or (iii) any application or other document or written communication (in this Section 9 collectively called “application”) executed by the Company or based upon written information furnished by the Company in any jurisdiction in order to qualify the Notes under the securities laws thereof or filed with the Commission, any foreign or state securities commission or agency; or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, unless such statement or omission was made in reliance upon and in conformity with written information furnished to the Company with respect to MB by or on behalf of such person expressly for use in the Registration Statement, the Prospectus or any amendment or supplement thereof, or in any application, as the case may be, which furnished written information, it is expressly agreed, consists solely of the information. The Company agrees promptly to notify MB of the commencement of any litigation or proceedings against the Company or any of its officers, directors or controlling persons in connection with the issue and sale of the Notes or in connection with the Registration Statement or the Prospectus. 
		

		
			   
		

		
			(ii)    Procedure. If any action is brought against MB in respect of which indemnity may be sought against the Company pursuant to Section 9(a)(i),  MB shall promptly notify the Company in writing of the institution of such action and the Company shall assume the defense of such action, including the employment and fees of counsel (subject to the reasonable approval of the MB) and payment of actual expenses.  MB or controlling person shall have the right to employ its or their own counsel in such case, but the fees and expenses of such counsel shall be at the expense of MB unless: (i) the employment of such counsel at the expense of the Company shall have been authorized in writing by the Company in connection with the defense of such action; (ii) the Company shall not have employed counsel to have charge of the defense of such action; or (iii) counsel to such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available to the Company (in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events the reasonable fees and expenses firm of attorneys selected by MB shall be borne by the Company. Notwithstanding anything to the contrary contained herein, if MB shall assume the defense of such action as provided above, the Company shall have the right to approve the terms of any settlement of such action which approval shall not be unreasonably withheld. 
		

		
			   
		

		
			(b)    Indemnification of the Company.  MP Securities, agrees to indemnify and hold harmless the Company, its directors, officers, and employees and agents who control the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and its counsel, against any and all loss, liability, claim, damage and expense described in the foregoing indemnity from the Company to MP Securities, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions made in the Registration Statement, the Prospectus or any amendment or supplement thereto, or in any application, in reliance upon, and in strict conformity with, written information furnished to the Company with respect to MP Securities by or on behalf of MP Securities expressly for use in such Registration Statement, the Prospectus or any amendment or supplement thereto or in any such application, which furnished written information. In case any action shall be brought against the Company or any other person so indemnified based on the Registration Statement, the Prospectus or any amendment or supplement thereto or any application, and in respect of which 
		

		 

		

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		indemnity may be sought against MP Securities,  MP Securities shall have the rights and duties given to the Company, and the Company and each other person so indemnified shall have the rights and duties given to MP Securities by the provisions of Section 9(a)(ii).  
		

		
			   
		

		
			(c)Contribution.  
		

		
			   
		

		
			(i)    Contribution Rights. In order to provide for just and equitable contribution under the 1933 Act in any case in which (i) any person entitled to indemnification under this Section 9 makes claim for indemnification pursuant hereto but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 9 provides for indemnification in such case, or (ii) contribution under the 1933 Act, the 1934 Act or otherwise may be required on the part of any such person in circumstances for which indemnification is provided under this Section 9 but is unavailable, then, and in each such case, the Company and the MB shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Company and the MB, as incurred, in such proportions that MB is responsible for that portion represented by the percentage that the commissions set forth in the Prospectus bears to the offering price of the Notes appearing thereon and the Company is responsible for the balance; provided, that, no person guilty of a fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Notwithstanding the provisions of this Section 9(c)(i),  MB shall not be required to contribute any amount in excess of the amount by which the total price at which the Notes sold by it and distributed to the public were offered to the public exceeds the amount of any damages that MB has otherwise been required to pay in respect of such losses, liabilities, claims, damages and expenses. For purposes of this Section 9, each director, officer and employee of MB or the Company, as applicable, and each person, if any, who controls MB or the Company, as applicable, within the meaning of Section 15 of the 1933 Act shall have the same rights to contribution as MB or the Company, as applicable. 
		

		
			   
		

		
			(ii)    Contribution Procedure. Within fifteen days after receipt by any party to this Agreement (or its representatives) of notice of the commencement of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made against another party (“contributing party”), notify the contributing party of the commencement thereof, but the omission to so notify the contributing party will not relieve it from any liability which it may have to any other party other than for contribution hereunder. In case any such action, suit or proceeding is brought against any party, and such party notifies a contributing party or its representatives of the commencement thereof within the aforesaid fifteen days, the contributing party will be entitled to participate therein with the notifying party and any other contributing party similarly notified. Any such contributing party shall not be liable to any party seeking contribution on account of any settlement of any claim, action or proceeding effected by such party seeking contribution on account of any settlement of any claim, action or proceeding effected by such party seeking contribution without the written consent of such contributing party. The contribution provisions contained in this Section 9(c) are intended to supersede, to the extent permitted by law, any right to contribution under the 1933 Act, the 1934 Act or otherwise available. 
		

		
			﻿
		

		

		

		 

		

			10

		

		

			 

		

 

		

			 

		

		10.Termination.   
		

		
			   
		

		
			(a)Termination Events.  This Agreement will terminate at the earlier of (i) the time that all of the Notes in the Offering have been sold, or (i) the time that this Agreement is terminated pursuant to Section 10(b) or 10(c) below. 
		

		
			﻿
		

		
			(b)By MB.  MB may terminate this Agreement:
		

		
			﻿
		

		
			(i) At any time upon 90 days’ advance written notice to the Company in the event the Company fails to reasonably carry out its duties under this Agreement;
		

		
			﻿
		

		
			(ii) At any time upon written notice to the Company if: (i) a material disruption in the major securities markets occurs; (ii) an outbreak of major hostilities or other national or international calamity occurs; (iii) a banking moratorium is declared by a state or federal authority; (iv) a moratorium in foreign exchange trading by major international banks or persons is declared; (v) a material interruption in the mail service or other means of communication within the United States occurs; (vi) the Company sustains a material or substantial loss by fire, flood, accident hurricane, earthquake, theft, sabotage, or other calamity or malicious act, whether or not such loss is insured against, that, in the opinion of MP Securities, makes it inadvisable to proceed with the Offering; or (vii) a change occurs in the market for the Company’s securities or securities in general or in political, financial, or economic conditions that, in the opinion of MB, makes it inadvisable to proceed with the Offering.
		

		
			﻿
		

		
			(c)By the Company.  The Company shall be entitled to terminate this Agreement upon sixty days’ prior notice in the event that MB (i) fails to reasonably carry out its duties under this Agreement; (ii) commits an act of negligence or intentional wrongdoing when undertaking its duties under this Agreement; or (iii) incurs a material adverse change in its business, operations or financial affairs, which in the opinion of the Company, may adversely affect the success of the Offering; provided, however, in each instance that the Company complies with the provisions of Section 3 of this Agreement. 
		

		
			  
		

		
			11.    Survival.  The respective indemnities, agreements, representations, warranties and other statements of the Company and MB, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of MB or the Company or any officer or director or controlling person of the Company. 
		

		
			  
		

		
			12.    Notices.  All notices, requests, demands and other communications which are required or permitted to be given under this Agreement shall be given in writing by personal delivery, prepaid nationally recognized overnight express courier service for next business day delivery, United States mail, postage prepaid, registered or certified mail, or facsimile with a hard copy sent within one (1) business day by any of the foregoing means, and addressed as follows: 
		

		
			  
		

		

		

		 

		

			11

		

		

			 

		

 

		

			 

		

		
		

			
					
						 

					
					
						 

				
	
					
						To the Company:

					
					
						Ministry Partners Investment Company, LLC

				
	
					
						 

					
					
						915 West Imperial Hwy, Suite 120

				
	
					
						 

					
					
						Brea, California 92821

				
	
					
						 

					
					
						Attention: Joseph W. Turner, Jr.

					
						President and CEO

				
	
					
						 

					
					
						Phone: 714-784-7133

				
	
					
						 

					
					
						Facsimile: 714-671-5767

				
	
					
						 

					
					
						 

				
	
					
						To the Managing Broker:

					
					
						Ministry Partners Securities, LLC

				
	
					
						 

					
					
						915 West Imperial Hwy, Suite 120

				
	
					
						 

					
					
						Brea, California 92821

				
	
					
						 

					
					
						Attention: R. Michael Lee, 

					
						Chairman of the Board of Managers

				
	
					
						 

					
					
						Phone: 714-784-7165

				
	
					
						 

					
					
						Facsimile: 714-671-5767

				

		
			  
		

		
			or to such other address or to the attention of such other person as shall be designated in writing by either party in a notice sent to the other in accordance with these notice provisions. Any notice, request, demand or other communication shall be deemed given at the time of personal delivery or, in the case of certified or registered mail, three (3) days after deposited in the custody of the United States Postal Service, or in the case of express courier service, as of the date of first attempted delivery at the address provided herein, or, in the case of a facsimile, upon delivery of same as confirmed by receipt showing a valid and successful transmission to the facsimile number shown herein. 
		

		
			﻿
		

		
			13.  Binding Effect.  This Agreement shall be binding upon, and inure solely to the benefit of, MP Securities, the Company and the respective managers, officers, and each person who controls the Company within the meaning of the 1933 Act, and their respective successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. 
		

		
			   
		

		
			14.  Time is of the Essence.  Time shall be of the essence of this Agreement. 
		

		
			   
		

		
			15.    Entire Agreement.  This Agreement, and any other document referenced herein, constitute the entire understanding of the parties hereto with respect to the subject matter hereof, and no amendment, modification or alteration of the terms hereof shall be binding unless the same be in writing, dated subsequent to the date hereof and duly approved and executed by each of the parties hereto. 
		

		
			   
		

		
			16.    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of California. 
		

		
			   
		

		
			17.    Headings. The Section headings herein are for the convenience of the parties only and shall not affect the construction or interpretation of this Agreement. 
		

		
			   
		

		
			18.    Amendments. No amendment or modification of this Agreement shall be effective or binding with respect to a party unless it is in writing and is signed by the party. 
		

		
			   
		

		
			19.    Waiver. The provisions of this Agreement may not be waived with respect to a party unless waived in writing by the party whom the condition is meant to benefit. 
		

		
			   
		

		
			20.    Further Acknowledgment by the Parties. Each of the parties hereto further acknowledges that the provisions of Section 9 hereof fairly allocate the risks in light of the ability of the parties to investigate 
		

		 

		

			12

		

		

			 

		

 

		

			 

		

		the Company, its affairs and its business in order to assure that adequate disclosure has been made in the Registration Statement and the Prospectus (and any amendments and supplements to the foregoing), as contemplated by the 1933 Act and the 1934 Act. 
		

		
			   
		

		
			21.    Counterparts.  This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. 
		

		
			   
		

		
			[SIGNATURE PAGE FOLLOWS] 
		

		

		

		 

		

			13

		

		

			 

		

 

		

			 

		

		
		

		
			If the foregoing is in accordance with your understanding, please sign and return to us two (2) counterparts hereof, and upon the acceptance hereof by MB, this letter and such acceptance hereof shall constitute a binding agreement between the MB and the Company. 
		

		
			  
		

		
			Very truly yours, 
		

		
			  
		

		
			MINISTRY PARTNERS INVESTMENT COMPANY, LLC, a California limited liability company
		

			
					
						 

					
					
						 

				
	
					
						By:

					
					
						 

				
	
					
						Name:

					
					
						 

				
	
					
						Title:

					
					
						 

				

		
			  
		

		
			  
		

		
			  
		

		
			  
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			Accepted as of the date hereof: 
		

		
			  
		

		
			MANAGING BROKER-DEALER 
		

		
			  
		

		
			MINISTRY PARTNERS SECURITIES, LLC 
		

		
			a Delaware limited liability company 
		

		
			  
		

			
					
						   

					
					
						 

				
	
					
						By:

					
					
						 

				
	
					
						Name:

					
					
						 

				
	
					
						Title:

					
					
						 

				

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			 
		

		

		

		 

		

			14

		

		

			 

		

 

		

			 

		

		EXHIBIT A
		

		
			﻿
		

		
			COMPENSATION STRUCTURE
		

		
			﻿
		

		
			﻿
		

		
			Selling Commissions, Account Servicing Fees
		

		
			﻿
		

		
			Commencing on the date of the Prospectus, a 1% sales commission will be paid to MP Securities on the sale of a Class 1A Note.  MP Securities will receive an Account Servicing Fee equal to 1% of the principal balance of the Class 1A Note purchased, payable on a monthly basis sold under the Offering.  The Account Servicing Fee will be assessed commencing one year after the purchase of Class 1A Note and will terminate when the Note matures.    The Company reserves the right to reduce or waive the Account Servicing Fee at any time or from time to time without the consent of MP Securities.  Payment of the Account Servicing Fee is subject to maximum gross dealer concessions of 5.5% paid as commission or as an Account Servicing Fee on the sale of any Class 1A Note sold under this Prospectus.
		

		
			﻿
		

		
			As a result, the maximum sales compensation to be paid to MP Securities as sales commissions from the sale of Class 1A Notes prior to the effective date and including any Account Servicing Fees paid on the outstanding balance of a Class 1A Note after the date of this Prospectus shall not exceed 5.5% of the principal balance of a Class 1A Note purchased, determined on a monthly basis, during the term of such Class 1A Note.
		

		
			﻿
		

		
			Payments of the Account Servicing Fee assessed on the principal balance of the Class 1A Notes will be made on a monthly basis within thirty (30) days after the close of the preceding month.  MP Securities shall deliver a report to the Company which summarizes the principal balance held for each investor by category and type of Note purchased within thirty (30) days of the close of the preceding month.
		

		
			﻿
		

		
			Managing Broker Processing Fee
		

		
			﻿
		

		
			The Company will also pay a .50% processing fee on the purchase of a Class 1A Note commencing with the effective date of the Prospectus.  The processing fee is assessed on the initial purchase of the Note.  No processing fee will be assessed on any withdrawals or requests for liquidation of a Class 1A Note.  In the event an investor increases the amount invested in a Variable Series Note, no additional processing fee will be paid to MP Securities.
		

		
			﻿
		

		
			 
		

		

		

		 

		

			A-1

		

		

			 

		

 

		

			 

		

		EXHIBIT B
		

		
			﻿
		

		
			SALES PROCEDURES FOR THE CLASS 1A NOTES OFFERING
		

		
			﻿
		

		
			The Company, the Managing Broker (“MB”) agrees that the following sales procedures will be followed in connection with the purchase of a Class 1A Note (“Note”) under the Offering: 
		

		
			  
		

			
					
						﻿

					
					
						1. 

					
					
						 

					
					
						The investor delivers a signed subscription agreement or purchase application, together with a check payable to Ministry Partners Investment Company, LLC.

				

		
			  
		

			
					
						﻿

					
					
						2. 

					
					
						 

					
					
						MB shall be responsible for undertaking its review of the purchase documentation and complying with applicable FINRA suitability and its compliance obligations.

				

		
			  
		

			
					
						﻿

					
					
						3. 

					
					
						 

					
					
						MB shall promptly forward the check and copy of the subscription agreements to the Company after it completes its review of the purchase documentation.

				

		
			  
		

			
					
						﻿

					
					
						4. 

					
					
						 

					
					
						Once the Company receives the funds and original purchase documentation, it will deposit the proceeds into its designated account (the “Notes Proceeds Account”) which will be set up as a separate account to hold and distribute funds from the Offering.

				

		
			  
		

			
					
						﻿

					
					
						5. 

					
					
						 

					
					
						MB shall deliver a confirmation of the purchase transaction to the investor.

				

		
			  
		

			
					
						﻿

					
					
						6. 

					
					
						 

					
					
						The Company will issue the original Note and forward to the investor, with a copy to the MB.

				

		
			  
		

			
					
						﻿

					
					
						7. 

					
					
						 

					
					
						MB shall retain books and records of all investor purchase documentation and related sales documentation for the Offering.

				

		
			  
		

			
					
						﻿

					
					
						8. 

					
					
						 

					
					
						MB will promptly furnish copies of all investor purchase documents, checks and blotter of investor purchases to the Company for the Offering.

				

		
			  
		

			
					
						﻿

					
					
						9. 

					
					
						 

					
					
						When ten (10) days after the close of the preceding month, MB shall deliver a report to the Company which summarizes the principal balance outstanding for each Fixed and Variable Series Note for each investor as of the close of the month.  The report furnished by MB shall include the Account Servicing Fees payable as of the close of the immediately preceding month, together with the calculation of the processing fee due on any sales transaction conducted during the immediately preceding month.  The report will also include the total amount of Class 1A Notes sold during the preceding month.

				

		
			  
		

			
					
						﻿

					
					
						10. 

					
					
						 

					
					
						When determining the Account Servicing Fees to be paid to MB, no Account Servicing Fee will be assessed on the outstanding principal balance of a Class 1A Note when the aggregate amount of compensation paid to MB, including sales commissions received from the purchase of any Note made under this Prospectus and Account Servicing Fee assessed on such Note after the date of this Prospectus, totals 5.5% of the principal balance of such Note.

				

		
			  
		

			
					
						﻿

					
					
						11. 

					
					
						 

					
					
						On a monthly basis or such date as may be mutually agreed upon by the Company and the MB, the Company will transmit payment of any sales commissions, processing fees  and Account Servicing Fees payable to the MB.

				

		
			 
		

		
			  
		

		
			﻿
		

		 

		

			B-1

		

		

			 

		

 

		

			 

		

			
					
						﻿

					
					
						12.  

					
					
						 

					
					
						On each closing date, the Company will transmit funds from the Notes Proceeds Account to the Company’s general operating account.

				

		
			  
		

			
					
						﻿

					
					
						13.  

					
					
						 

					
					
						The Company agrees to grant to the MB reasonable access, including online access to the Notes Proceeds Account and its investor portal relating to sales transactions relating to the Offering, once it becomes operational.

				

		
			﻿
		

		
			﻿
		

		
			[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 
		

		
			﻿
		

		
			 
		

		

		

		 

		

			B-2

		

		

			 

		

 

		

			 

		

		﻿
		

		
			SCHEDULE I 
		

		
			  
		

		
			BLUE SKY STATES  
		

		
			  
		

			
					
						 

					
					
						 

					
					
						State

					
					
						 

					
					
						Offers and Sales 

					
						in State Pursuant to 

					
						Effective Blue Sky Registration

					
					
						 

					
					
						Offers and Sales 

					
						in State Pursuant to 

					
						Applicable Exemption

				
	
					
						1.

					
					
						 

					
					
						 California

					
					
						 

					
					
						$90,000,000

					
					
						 

					
					
						N/A

				
	
					
						2.

					
					
						 

					
					
						 Colorado

					
					
						 

					
					
						$90,000,000

					
					
						 

					
					
						N/A

				
	
					
						3.

					
					
						 

					
					
						 Florida

					
					
						 

					
					
						$90,000,000

					
					
						 

					
					
						N/A

				
	
					
						4.

					
					
						 

					
					
						 Georgia

					
					
						 

					
					
						$90,000,000

					
					
						 

					
					
						N/A

				
	
					
						5.

					
					
						 

					
					
						 Idaho

					
					
						 

					
					
						$90,000,000

					
					
						 

					
					
						N/A

				
	
					
						6.

					
					
						 

					
					
						 Illinois

					
					
						 

					
					
						$1,000,000

					
					
						 

					
					
						N/A

				
	
					
						7.

					
					
						 

					
					
						 Indiana

					
					
						 

					
					
						$1,000,000

					
					
						 

					
					
						N/A

				
	
					
						8.

					
					
						 

					
					
						 Michigan

					
					
						 

					
					
						$5,000,000

					
					
						 

					
					
						N/A

				
	
					
						9.

					
					
						 

					
					
						 Minnesota

					
					
						 

					
					
						$90,000,000

					
					
						 

					
					
						N/A

				
	
					
						10.

					
					
						 

					
					
						Nevada

					
					
						 

					
					
						$350,000

					
					
						 

					
					
						N/A

				
	
					
						11.

					
					
						 

					
					
						Ohio

					
					
						 

					
					
						$10,000,000

					
					
						 

					
					
						N/A

				
	
					
						12.

					
					
						 

					
					
						Oregon

					
					
						 

					
					
						$90,000,000

					
					
						 

					
					
						N/A

				
	
					
						13.

					
					
						 

					
					
						Pennsylvania

					
					
						 

					
					
						$9,999,999

					
					
						 

					
					
						N/A

				
	
					
						14.

					
					
						 

					
					
						Rhode Island

					
					
						 

					
					
						$1,000,000

					
					
						 

					
					
						N/A

				
	
					
						15.

					
					
						 

					
					
						South Carolina

					
					
						 

					
					
						$5,000,000

					
					
						 

					
					
						N/A

				
	
					
						16.

					
					
						 

					
					
						Tennessee

					
					
						 

					
					
						$1,000,000

					
					
						 

					
					
						N/A

				
	
					
						17.

					
					
						 

					
					
						West Virginia

					
					
						 

					
					
						$1,000,000

					
					
						 

					
					
						N/A

				
	
					
						18.

					
					
						 

					
					
						Wisconsin

					
					
						 

					
					
						$90,000,000

					
					
						 

					
					
						N/A

				

		
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			﻿
		

		 

		

			I-1trtc_ex420.htm

EXHIBIT 4.20

 

THE SECURITY REPRESENTED BY THIS INSTRUMENT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 NOR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS, SUCH SECURITY MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS SUCH QUALIFICATION AND REGISTRATION IS NOT REQUIRED.

 

SECURED

PROMISSORY NOTE

 

	
$6,500,000.00 
	
 
	
New York, New York

January 18, 2018

 

FOR VALUE RECEIVED, 620 Dyer LLC, a California limited liability company, as maker, having its principal place of business at 1581 Franklin Avenue, Garden City, New York 11501 (“Borrower”), hereby unconditionally promises to pay to the order of RD Dyer LLC, a Delaware limited liability company, having an address at c/o RD Advisors, 341 West 38th Street, Suite 800, New York, New York 10018 (together with its successors and/or assigns, “Lender”), or at such other place as the holder hereof may from time to time designate in writing, the principal sum of Six Million Five Hundred Thousand Dollars ($6,500,000.00) This Secured Promissory Note (this “Note”) is the note referred to in that certain Loan Agreement dated the date hereof between Borrower and Lender (as the same may be amended, modified, supplemented, replaced or otherwise modified from time to time, the “Loan Agreement”). Payments hereunder shall be made in lawful money of the United States of America, with interest thereon to be computed from the date of this Note at the Interest Rate (as defined in the Loan Agreement), and shall be paid in accordance with the terms of this Note and the Loan Agreement. Payments hereunder may be made by check or by federal wire transfer, but not in cash. All capitalized terms not defined herein shall have the respective meanings set forth in the Loan Agreement.

 

PAYMENT TERMS

 

Borrower agrees to pay the principal sum of this Note and interest on the unpaid principal sum of this Note and all other amounts due under the Loan Agreement and the other Loan Documents from time to time outstanding, at the rates and at the times specified in the Loan Agreement, and the outstanding balance of the principal sum of this Note and all accrued and unpaid interest thereon and all other amounts due under the Loan Agreement and the other Loan Documents shall be due and payable on the Maturity Date.

 

DEFAULT AND ACCELERATION

 

The Debt shall without notice become immediately due and payable at the option of Lender upon the happening of any Event of Default.

 

	 
	1
	

 
	 

 

LOAN DOCUMENTS

 

This Note is secured by the Deed of Trust and the other Loan Documents. All of the terms, covenants and conditions contained in the Loan Agreement, the Deed of Trust and the other Loan Documents are hereby made part of this Note to the same extent and with the same force as if they were fully set forth herein. In the event of a conflict or inconsistency between the terms of this Note and the Loan Agreement, the terms and provisions of the Loan Agreement shall govern.

 

SAVINGS CLAUSE

 

Notwithstanding anything to the contrary contained herein, (a) all agreements and communications between Borrower and Lender are hereby and shall automatically be limited so that, after taking into account all amounts deemed to constitute interest, the interest contracted for, charged or received by Lender shall never exceed the Maximum Legal Rate, (b) in calculating whether any interest exceeds the Maximum Legal Rate, all such interest shall be amortized, prorated, allocated and spread over the full amount and term of all principal indebtedness of Borrower to Lender, and (c) if through any contingency or event, Lender receives or is deemed to receive interest in excess of the Maximum Legal Rate, any such excess shall be deemed to have been applied toward the payment of the principal of any and all then outstanding indebtedness of Borrower to Lender, or if there is no such indebtedness, shall immediately be returned to Borrower.

 

NO ORAL CHANGE

 

This Note may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act on the part of Borrower or Lender, but only by an agreement in writing signed by the party(ies) against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought.

 

WAIVERS

 

(A) Borrower and all others who may become liable for the payment of all or any part of the Debt do hereby jointly and severally waive presentment and demand for payment, notice of dishonor, notice of intention to accelerate, notice of acceleration, protest and notice of protest and non-payment and all other notices of any kind. No release of any security for the Debt or extension of time for payment of this Note or any installment hereof, and no alteration, amendment or waiver of any provision of this Note, the Loan Agreement or the other Loan Documents made by agreement between Lender and any other Person shall release, modify, amend, waive, extend, change, discharge, terminate or affect the liability of Borrower or any other Person (other than the Person with whom Lender made the aforementioned agreement) who may become liable for the payment of all or any part of the Debt under this Note, the Loan Agreement or the other Loan Documents. No notice to or demand on Borrower shall be deemed to be a waiver of the obligation of Borrower or of the right of Lender to take further action without further notice or demand as provided for in this Note, the Loan Agreement or the other Loan Documents. If Borrower is a partnership or limited liability company, the agreements herein contained shall remain in force and be applicable, notwithstanding any changes in the individuals or entities comprising the partnership or limited liability company, and the term “Borrower,” as used herein, shall include any alternate or successor partnership or limited liability company, but any predecessor partnership or limited liability company and its partners or members shall not thereby be released from any liability. If Borrower is a corporation, the agreements contained herein shall remain in full force and be applicable, notwithstanding any changes in the shareholders comprising, or the officers and directors relating to, the corporation, and the term “Borrower,” as used herein, shall include any alternative or successor corporation, but any predecessor corporation shall not be relieved of liability hereunder. (Nothing in the foregoing two sentences shall be construed as a consent to, or a waiver of, any prohibition or restriction on transfers of interests in such partnership, limited liability company or corporation which may be set forth in the Loan Agreement, the Deed of Trust or any other Loan Document.)

 

	 
	2
	

 
	 

 

(B) To the extent applicable, Borrower hereby expressly (i) waives any right it may have under California Civil Code § 2954.10 to prepay this Note in whole or in part, without penalty, upon acceleration of the Maturity Date; and (ii) agrees that if a prepayment of any or all of this Note is made, following any acceleration of the Maturity Date by Lender on account of any transfer or disposition prohibited or restricted herein or by the Deed of Trust, Borrower shall be obligated to pay, concurrently therewith, the Liquidated Damages Amount, if any, that would be required under the Loan Agreement. By initialing this provision in the space provided below, Borrower hereby declares that Lender's agreement to make the subject Loan at the interest rate and for the term set forth herein constitutes adequate consideration, given individual weight by the undersigned, for this waiver and agreement.

 

(C) To the extent applicable, nothing herein shall be deemed to limit the right of Lender to recover, in accordance with California Code of Civil Procedure Section 736 (as such Section may be amended from time to time), any costs, expenses, liabilities or damages, including attorneys’ fees and costs, incurred by Lender and arising from any covenant, obligation, liability, representation or warranty contained in any environmental indemnity agreement given to Lender (including, without limitation, the environmental indemnity provisions of the Loan Agreement), or any order, consent decree or settlement relating to the cleanup of Hazardous Substances or any other “environmental provision” (as defined in such Section 736) relating to the Property or any portion thereof or the right of Lender to waive, in accordance with California Code of Civil Procedure Section 726.5 (as such Section may be amended from time to time), the security of the Deed of Trust as to any parcel of the Property that is “environmentally impaired” or is an “affected parcel” (as such terms are defined in such Section 726.5), and as to any personal property attached to such parcel, and thereafter to exercise against Borrower, to the extent permitted by such Section 726.5, the rights and remedies of any unsecured creditor, including reduction of Lender’s claim against Borrower to judgment, and any other rights and remedies permitted by law.

 

BORROWER’S INITIALS AS TO WAIVERS ABOVE: ____________

 

TRANSFER

 

Upon the transfer of this Note by Lender, Borrower hereby waiving notice of any such transfer, Lender may deliver all the collateral mortgaged, granted, pledged or assigned pursuant to the Loan Documents, or any part thereof, to the transferee who shall thereupon become vested with all the rights herein or under applicable law given to Lender with respect thereto, and Lender shall thereafter forever be relieved and fully discharged from any liability or responsibility in the matter; but Lender shall retain all rights hereby given to it with respect to any liabilities and the collateral not so transferred.

 

	 
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GOVERNING LAW; JURISDICTION; SERVICE OF PROCESS

 

THIS NOTE WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY BORROWER AND ACCEPTED BY LENDER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THIS NOTE WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS NOTE AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS NOTE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

 

ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF OR RELATING TO THIS NOTE MAY AT LENDER’S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:

 

Paracorp Incorporated

One Commerce Plaza

99 Washington Avenue, #805A

Albany, NY 12210-2822

 

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND BORROWER AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST BORROWER IN ANY OTHER JURISDICTION. 

 

	 
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WAIVER OF JURY TRIAL

 

BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND FOREVER WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST, WITH REGARD TO THIS NOTE, THE DEED OF TRUST OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.

 

SUCCESSORS AND ASSIGNS

 

This Note shall be binding upon, and shall inure to the benefit of, Borrower and Lender and their respective successors and permitted assigns. Lender shall have the right to assign or transfer its rights under this Note in connection with any assignment of the Loan and the Loan Documents. Any assignee or transferee of Lender shall be entitled to all the benefits afforded to Lender under this Note. Borrower shall not have the right to assign or transfer its rights or obligations under this Note without the prior written consent of Lender, as provided in the Loan Agreement, and any attempted assignment without such consent shall be null and void.

 

NOTICES

 

All notices or other written communications hereunder shall be delivered in accordance with Section 9.5 of the Loan Agreement.

 

[NO FURTHER TEXT ON THIS PAGE]

 

	 
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THE SECURITY REPRESENTED BY THIS INSTRUMENT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 NOR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS, SUCH SECURITY MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS SUCH QUALIFICATION AND REGISTRATION IS NOT REQUIRED.

 

IN WITNESS WHEREOF, Borrower has duly executed this Note as of the day and year first above written.

 

		
BORROWER:
	
 

		
 
	
 

		
620 Dyer LLC, a California limited liability company
	
 

		
 
	
 

	
 
	
By:
	
Terra Tech Corp., a Nevada corporation, doing business in California as 2040 Main Street Corp., its Sole Member
	
 

	
 
			
 

	
 
			
 

	
 
	
 
	
By:
		
 

	
 
		
 
	
Derek Peterson
	
 

	
 
		
 
	
Its Chief Executive Officer
	
 

 

 

	
6

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