BEST EFFORTS UNDERWRITING AGREEMENT
(CHURCH LOANS & INVESTMENTS TRUST)
This Underwriting Agreement (the "Agreement") made and entered into this
3rd day of July, 2003, by and between Church Loans & Investments Trust, a
Texas real estate investment trust, whose address is 0000 X-00 Xxxx, Xxxxxxxx,
Xxxxx, 00000 ("Church Loans"), and Great Nation Investment Corporation, a Texas
corporation, whose address is 0000 Xxxx Xxxxxx, Xxxxxxxx X, Xxxxxxxx, Xxxxx
00000 (the "Underwriter").
Recitals
1. Church Loans desires to offer and sell a maximum offering of 7,000,000
Certificates of Beneficial Interest ("Shares") to the public through
the Underwriter.
2. The offering and sale of the Shares will be made pursuant to a
Registration Statement to be filed by Church Loans ("the Registration
Statement") in order to register the Shares with the Securities and
Exchange Commission ("the Commission").
3. The Underwriter is willing to assist Church Loans with the proposed
issuance and sale of the Shares on a best efforts basis on the terms
and conditions contained in this Agreement.
Agreement
Now, therefore, in consideration of the foregoing and of the mutual
covenants, agreements, undertakings, representations, and warranties contained
herein, Church Loans and the Underwriter agree as follows:
I. Representations and Warranties
Church Loans represents and warrants to and agrees with the Underwriter
that:
A. Church Loans is a Texas real estate investment trust duly organized
and validly existing as a real estate investment trust in good
standing under the laws of the State of Texas.
B. Church Loans shall issue, consistent with the terms and conditions of
the Registration Statement, 7,000,000 Shares. The Shares shall be sold
at a price of three and no/dollars ($3.00) per Share or such other
price as may be required by the SEC or determined by Church Loans.
C. Upon request at any time prior to the Delivery Date defined below,
there will be delivered to the Underwriter, copies of the Declaration
of Trust and By-
Page 1 of 17
Laws of Church Loans, together with all amendments, if any, and copies
of the resolutions adopted by the Trust Managers of Church Loans
authorizing the issuance of the Shares and related matters.
D. A Registration Statement in the form of an S-11 as prescribed by the
Commission, together with a related Prospectus with respect to the
Shares, will be filed with the Commission under the Securities Act of
1933, as amended (the "Act"). Church Loans will use its best efforts
to cause the Registration Statement and the Prospectus to become
effective as soon as possible after the filing.
As used in this Agreement, the term "Registration Statement" refers to
and means the Registration Statement as well as any and all amendments
to the Registration Statement, including exhibits and financial
statements, when the Registration Statement becomes effective and, in
the event of any amendments after the effective date of the
Registration Statement, the Registration Statement as so amended.
As used in this Agreement, the term "Prospectus" refers to and means
the related Prospectus in final form, and in the event of any
amendment or supplement to the Prospectus after the effective date of
the Registration Statement, also refers to and means the Prospectus as
so amended or supplemented.
E. The Shares shall also be registered and/or qualified for sale with the
state regulatory agencies of all states where the Shares shall be
offered for sale. The Underwriter shall assist Church Loans in the
preparation and filings of all necessary filings with the state
regulatory agencies of all states where the Shares shall be offered
for sale.
F. All expenses of registration and qualification shall be paid by Church
Loans, including the National Association of Securities Dealers ("the
NASD") filing fee and NASD's fees for approval of any and all
marketing materials.
G. Notwithstanding the above, to the extent possible, the Effective Date
of the offering shall be at a date mutually agreed to by Church Loans
and the Underwriter subject to the requirements of applicable law.
H. The purchase price of the Shares shall be three and no/dollars ($3.00)
per Share with an initial minimum purchase amount of five hundred
(500) Shares resulting in a minimum investment per investor of one
thousand five hundred and no/100 dollars ($1,500.00).
I. When the Registration Statement becomes effective, it and the
accompanying Prospectus will comply in all material respects with the
Page 2 of 17
requirements of the Act and with the rules and regulations of the
Commission promulgated under the Act; provided, however, Church Loans
makes no representations or warranties as to information contained in
or omitted from the Registration Statement or the Prospectus in
reliance upon written information furnished to Church Loans by the
Underwriter specifically for inclusion in the Registration Statement
or the Prospectus.
J. Upon receipt and acceptance by Church Loans of the purchase price of
the Shares, the Shares shall be deemed issued and shall be considered
fully paid and non-assessable in accordance with Church Loans'
Declaration of Trust.
K. Xxxxxxx Xxxxxxxxx, L.L.P., the certified public accountants who will
certify to the financial statements to be filed with the Commission as
a part of the Registration Statement and to the financial statements
incorporated in the Prospectus, and who, as experts, may certify or
review other information of a financial or accounting nature contained
in the Registration Statement and the Prospectus, are independent
certified public accountants as required by the Act and the rules and
regulations promulgated under the Act.
L. Church Loans will deliver to the Underwriter financial statements as
of March 31, 2003. Church Loans represents that such financial
statements will fairly present in all material respects the financial
condition of Church Loans computed in accordance with generally
accepted accounting principles applied on a consistent basis and the
rules and regulations of the Commission relating to financial
statements.
M. Church Loans will furnish to the Underwriter the financial statements
included in the Registration Statement and prepared in accordance with
the rules and regulations of the Commission. Such financial statements
will fairly present the position of Church Loans in all material
respects on the dates shown and will reflect all material liabilities
of Church Loans, contingent or otherwise.
N. The certificate or certificates that Church Loans is required to
furnish to the Underwriter pursuant to the provisions of paragraph G
of Article VIII of this Agreement will be true and correct.
O. All of the foregoing representations, warranties, and agreements shall
survive delivery of and payment for all of the Shares covered by this
Agreement.
Page 3 of 17
II. Retention of the Underwriter
Based upon the foregoing representations, warranties, and agreements and
subject to the terms and conditions contained herein:
A. Church Loans retains the Underwriter as its agent to sell for the
account of Church Loans the aforementioned Shares. The Underwriter
shall use the Underwriter's best efforts as agent promptly following
the receipt of written notice of the effective date of the
Registration Statement to sell the Shares subject to the terms,
provisions and conditions set forth below. There is no assurance that
any or all of the Shares to be offered by Church Loans will be sold
and the Underwriter is under no obligation to purchase or take down
any of the Shares on the Underwriter's own behalf or on the behalf of
others.
B. Church Loans may reject any purchase of shares, offer to purchase
shares, and/or offer to purchase or subscription to purchase shares
which would be in breach of the restrictions on such offerings
referenced in Church Loans' Declaration of Trust or the provisions of
the Internal Revenue Code related to real estate investment trusts.
Such rejection shall include offers and purchases, whether direct or
indirect, in excess of ten percent (10%) of the outstanding Shares of
Church Loans. In the event that Church Loans rejects any purchase of
shares, then Church Loans shall return the applicable funds to the
Underwriter within five (5) business days of receipt of same by Church
Loans.
C. The Underwriter shall receive as compensation a commission of five
percent (5%) of the full amount of all Shares sold by the Underwriter
(including the Underwriting Group, as hereinafter defined) and for
which payment is made to Church Loans regarding sales of Shares to
individuals who do not currently own Shares in Church Loans. The
Underwriter shall receive as compensation a commission of two percent
(2%) of the full amount of all Shares sold by the Underwriter
(including the Underwriting Group, as hereinafter defined) and for
which payment is made to Church Loans regarding sales of Shares to
existing shareholders of Church Loans.
D. The Underwriter may associate whatever other underwriters the
Underwriter may desire as long as such other underwriters are
registered members of the NASD. The Underwriter may offer the Shares
through registered securities dealers selected by the Underwriter and
to pay such dealers out of the commissions received by the Underwriter
whatever compensation the Underwriter may determine.
The Underwriter, such other underwriters and such securities dealers
shall be collectively referred to herein as the "Underwriting Group".
Page 4 of 17
E. The Underwriter represents that it is appropriately registered as a
broker- dealer with the Commission, NASD, and in all states in which
it conducts or will conduct business in connection with this offering.
Further, the Underwriter represents that the Underwriter is a member
in good standing of the NASD. The Underwriter also agrees not to
solicit subscriptions for the Shares that will result in a violation
of the securities laws of the United States, any state, any rule or
regulation thereunder, any rules of the NASD, or any securities
exchange.
F. The Underwriter represents that there is not now pending or threatened
against the Underwriter any action or proceeding of which Underwriter
has been advised, either in any court of competent jurisdiction,
before the Commission or any state securities commission concerning
activities as a broker or dealer, nor has the Underwriter been named
as a "cause" in any such action or proceeding.
G. Upon the request of the Underwriter, Church Loans will inform the
Underwriter as to the states in which Church Loans has been advised by
counsel that the Shares have been qualified for sale under the
respective state securities laws. However, Church Loans does not
assume any responsibility or obligation as to the Underwriter's right
to sell the Shares in any state. Underwriter understands and agrees
that under no circumstances may Underwriter engage in any activities
hereunder in any jurisdiction: in which Church Loans has not informed
the Underwriter that the Shares are qualified for sale under the
applicable securities laws; or in which the Underwriter may not
lawfully so engage.
H. The Underwriter confirms that the Underwriter's commitment to use its
best efforts to solicit subscriptions for the Shares will not result
in a violation of the:
1. securities laws of the United States, including but not limited
to the Act or any rule or regulation thereunder;
2. the securities laws of any state in which the Underwriter will
conduct business and the rules and regulations thereunder;
3. any rules of any securities exchange to which the Underwriter is
subject; any restriction imposed upon the Underwriter by the
NASD; and/or
4. any such exchange or governmental authority.
Further, the Underwriter agrees to indemnify Church Loans, its
shareholders, officers, Board of Trust Managers, employees, and/or
agents for any and all
Page 5 of 17
damages, liabilities and costs (including reasonable attorneys' fees
and expenses) resulting from the Underwriter's violation of any and/or
all of the aforementioned.
I. The Underwriter represents that in connection with the offering the
Underwriter:
1. Shall comply in all respects with the provisions of this
Agreement;
2. Shall use its best efforts to obtain the approval of the NASD
pursuant to Rule 2710 of the Conduct Rules of the NASD with
respect to the compensation arrangements set forth herein;
3. Shall comply with all applicable limitations on the manner of
offering as required by the Act, applicable state securities
laws, and the NASD;
4. Shall have reasonable grounds to believe, after making reasonable
inquiry, that each potential investor meets the requirements of
the Act, the NASD, and applicable state securities laws as to the
suitability of the investment for such investor prior to the
sale;
5. No owner, partner, director or officer of the Underwriter has
within the last five (5) years been subject to any of the
following administrative or judicial actions (by the Commission
or any state securities commission):
a. Registration Stop Order (Issuance of Securities),
b. Securities related felony conviction,
c. Securities related administrative order,
d. Any administrative order involving fraud or deceit, and/or
e. Securities related injunction;
6. Does not have a current effective administrative order revoking a
securities exemption; and
7. Has not been suspended, censured or expelled by the NASD.
Further, the Underwriter agrees to indemnify Church Loans, its
shareholders, officers, Board of Trust Managers, employees, and/or
agents for any and all damages, liabilities and costs (including
reasonable attorneys' fees and
Page 6 of 17
expenses) resulting from the Underwriter's violation of any and/or all
of the aforementioned.
J. The Underwriter and all members of the Underwriting Group undertake to
comply with Rules 2730, 2740, 2420 and 2750 of the Conduct Rules of
the NASD. Furthermore, any and all Selected Dealer Agreements shall
provide that all members of the Underwriting Group shall agree to
comply with the aforementioned Conduct Rules.
III. Further Agreements of Church Loans
Church Loans agrees, at the expense of Church Loans and without expense to
the Underwriter, as follows:
A. To give and to continue to give and supply whatever financial
statements and other information that may be required by the
Commission and/or the proper public bodies in the states in which the
Shares may be qualified.
B. To advise the Underwriter in writing as soon as practicable after
Church Loans is informed of the following:
1. When the Registration Statement becomes effective;
2. When any amendment to the Registration Statement filed subsequent
to the effective date of the Registration Statement becomes
effective;
3. Any request of the Commission for amendments to the Registration
Statement or the related Prospectus, or requests by the
Commission for additional information;
4. Issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the initiation
of any proceeding for that purpose;
5. Any material adverse change in the financial position or
operating condition of Church Loans as well as any development
materially affecting Church Loans or rendering untrue or
misleading any material statement in the Registration Statement
or the Prospectus; and
6. The effectiveness of any and all state registrations.
C. To make every reasonable effort to prevent the issuance of any stop
order suspending the effectiveness of the Registration Statement, and
if a stop order is entered at any time to use its best efforts to
obtain withdrawal of the order at the earliest possible moment.
Page 7 of 17
D. To deliver to the Underwriter without charge: (a) prior to the
effective date of the Registration Statement, copies of each
preliminary Prospectus filed with the Commission bearing in red ink
the statement required by the rules of the Commission; (b) on and from
time to time after the effective date of the Registration Statement,
copies of the Prospectus and of any amended or supplemented
Prospectus; and (c) as soon as they are available and from time to
time after they are available, copies of each Prospectus prepared for
the purpose of permitting compliance with Section 10 of the Act and of
any amended or supplemented Prospectus. The number of copies to be
delivered in each instance shall be the number the Underwriter may
reasonably request.
E. To furnish without cost to the Underwriter one executed copy of the
Registration Statement, including all exhibits and amendments, and a
reasonable number of copies of the Registration Statement and
amendments.
F. During the period after the effective date of the Registration
Statement during which the Prospectus is required by law to be used
but not after the Delivery Date except in accordance with Article XII
hereof, if any change occurs so that the Prospectus includes an untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements in the Prospectus, in the
light of the circumstances under which they are made, not misleading,
Church Loans will prepare and furnish to the Underwriter, without
cost, supplements to the Prospectus or an amended Prospectus
correcting the untrue statement or supplying the omission.
G. If revision of the Prospectus pursuant to the provisions of Section 10
of the Act becomes necessary, Church Loans will review the Prospectus,
file copies of the Prospectus with the Commission, and furnish copies
of the revised Prospectus to the Underwriter in whatever reasonable
quantity the Underwriter requests.
H. To use its best efforts working with the Underwriter to cause the
Shares to be qualified for sale on terms consistent with those stated
in the effective Registration Statement under the Blue Sky Laws in
whatever states may be agreed upon.
I. To provide to the Underwriter any reasonable additional information or
documentation deemed by the Underwriter to be necessary in the
performance of the Underwriter's due diligence.
Page 8 of 17
IV. Indemnity Provisions
A. Church Loans shall indemnify, defend and hold the Underwriter
(including any underwriter, dealer or securities dealer associated
with the Underwriter), and each person, if any, who controls the
Underwriter within the meaning of Section 15 of the Act ("controlling
person"), free and harmless from and against any and all losses,
claims, demands, liabilities, and expenses (including reasonable legal
or other expenses) whether or not resulting in any liability to the
Underwriter or any controlling person, which the Underwriter or
controlling person may incur under the Act or at common law or
otherwise, but only to the extent that the losses, claims, demands,
liabilities, and expenses arise out of or are based upon:
1. Any untrue statement or alleged untrue statement of a
material fact contained in:
a. the Registration Statement;
b. in the Prospectus;
c. in any amendment to the Registration Statement or the
Prospectus;
d. in any application or other papers executed by any
underwriter or dealer with the written approval of
Church Loans for filing in any state or states in order
to qualify the securities covered by this Agreement
under the securities laws of those states (the "Blue
Sky Application"); or
e. arise out of or are based upon any omission or alleged
omission to state in these documents a material fact
required to be stated in them or necessary to make the
statements in them not misleading.
However, this indemnity agreement shall not apply to any losses,
claims, demands, liabilities, or expenses arising out of or based upon
any untrue statement or alleged untrue statement of a material fact
that was made in reliance upon information furnished to Church Loans
by the Underwriter in writing expressly for use in the Registration
Statement or the Prospectus or in any amendment or amendments to them,
or was made by the Underwriter in a Blue Sky Application not in
reliance upon information furnished by Church Loans.
Page 9 of 17
B. The foregoing indemnity of Church Loans in favor of the Underwriter
shall not be deemed to protect the Underwriter against any liability
to Church Loans or its shareholders to which the Underwriter would
otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of the duties of the Underwriter,
or by reason of the reckless disregard of their obligations and duties
under this Agreement.
C. The Underwriter shall give Church Loans an opportunity to participate
in the defense or preparation of the defense of any action brought
against the Underwriter or controlling person of the Underwriter to
enforce any claim or liability pursuant to this Agreement, and Church
Loans may so participate. Church Loans' agreement under the foregoing
indemnity is expressly conditioned upon notice of any action being
sent by the Underwriter or controlling person, as the case may be, to
Church Loans, by letter or facsimile (addressed as provided herein),
promptly after the commencement of the action against the Underwriter
or controlling person. Such notice must either be accompanied by
copies of papers served or filed in connection with the action or by a
statement of the nature of the action to the extent known to the
Underwriter. Failure to notify Church Loans within a reasonable time
of an action shall relieve Church Loans of its respective liabilities
under the foregoing indemnity, but failure to notify Church Loans
shall not relieve Church Loans from any liability that Church Loans
may have to the Underwriter or controlling person other than on
account of the indemnity agreement contained in this Article IV.
D. The Underwriter likewise shall indemnify, defend and hold harmless
Church Loans against any and all losses, claims, expenses, and
liabilities to which Church Loans may become subject arising out of or
based upon any untrue statement or alleged untrue statement of a
material fact contained in: the Registration Statement; the
Prospectus; any amendment or amendments to the Registration Statement
or the Prospectus; any Blue Sky Application, arising out of or based
upon the omission or alleged omission to state in these documents a
material fact required to be stated in them or necessary to make the
statements in them not misleading resulting from the use of written
information furnished to Church Loans by the Underwriter expressly for
use in the preparation of the Registration Statement or the
Prospectus.
E. Church Loans shall give the Underwriter an opportunity to participate
in the defense or preparation of the defense of any action brought
against Church Loans to enforce any claim or liability pursuant to
this Agreement, and the Underwriter may so participate. The agreement
of the Underwriter under the foregoing indemnity is expressly
conditioned upon notice of any action being sent by Church Loans to
the Underwriter, by letter or by facsimile (addressed as provided in
this Agreement), promptly after the commencement of the action against
Church Loans. The notice must either be accompanied by
Page 10 of 17
copies of papers served or filed in connection with the action or by a
statement of the nature of the action to the extent known to Church
Loans. Failure to notify the Underwriter of any action shall relieve
the Underwriter of its liability under the foregoing indemnity, but
failure to notify the Underwriter shall not relieve the Underwriter
from any liability which the Underwriter may have to Church Loans or
its stockholders otherwise than on account of the indemnity agreement
contained in this Article IV.
F. The provisions of this Article IV shall not in any way prejudice any
right or rights that the Underwriter may have against Church Loans or
that Church Loans may have against the Underwriter under any statute
other than the Act, at common law or otherwise.
G. The indemnity agreements contained in this Article IV shall survive
the Delivery Date and shall inure to the benefit of successors of
Church Loans and successors of the Underwriter, and shall be valid
irrespective of any investigation made by or on behalf of the
Underwriter or Church Loans.
V. Payment of Expenses
Church Loans shall, at its own expense and without expense to the
Underwriter, pay all costs and expenses incident to this Agreement including
without limitation all expenses in connection with: the preparation, printing
and filing of the Registration Statement and the Prospectus as well as all
amendments thereto together with all exhibits; filing fees and costs, original
issue taxes, charges, or disbursements connected with the issue and delivery of
the Shares; reasonable expenses incurred in connection with the qualification of
the Shares under the securities or Blue Sky Laws of the aforementioned states;
and costs of marketing materials as agreed upon by Church Loans and the
Underwriter.
VI. Public Offering
The Underwriter shall make a public offering on a best efforts basis of the
Shares covered hereby as soon after the effective date of the Registration
Statement as is advisable in accordance with and as set forth in the
Registration Statement. The public offering may be made through NASD member
broker-dealers selected by the Underwriter, or partly in each manner, as
determined by the Underwriter in the sole discretion of the Underwriter. The
Underwriter may pay the broker-dealers out of the commissions received by the
Underwriter for the Shares sold by the broker-dealers whatever compensation the
Underwriter and the broker-dealers may determine.
VII. Payments on Default
If any of the conditions, representations or warranties set forth in
Article VIII of this Agreement are not fulfilled in any material respect, or if
for any reason Church Loans fails to comply with the terms of this Agreement in
any material respect (other than in
Page 11 of 17
connection with a breach of the Agreement by the Underwriter), and if the
Underwriter elects to terminate this Agreement pursuant to Article X hereto,
then, in addition to paying Church Loans' own expenses as provided in Article V
hereof, Church Loans shall reimburse the Underwriter for its actual accountable
out-of-pocket expenses related directly to the offering of the Shares.
VIII. Conditions Precedent to Underwriter's Obligations
The obligations of the Underwriter as agreed upon herein are conditioned
upon:
A. The approval by Underwriter of the form and content of the
Registration Statement and the Prospectus.
B. Church Loans' performance in all material respects of all the
obligations required by Church Loans to be performed hereunder and the
truth, completeness and accuracy of all statements and representations
in all material respects contained herein or of any financial
statements furnished hereunder.
C. From the date hereof until the Delivery Date, and during the term
hereof, no material adverse change occurring in the properties and
assets of Church Loans other than changes occurring in the ordinary
course of business.
D. No claim being made or legal action being instituted against Church
Loans which if adversely determined would have a material adverse
effect on the financial condition of Church Loans, taken as a whole,
and no reasonable basis for a claim or an action of this nature being
discovered.
E. No amendment to the Registration Statement being filed to which the
Underwriter reasonably has objected after having received reasonable
notice. Further, no stop order suspending the effectiveness of the
Registration Statement being issued and no proceedings for that
purpose being threatened or instituted.
F. Prior to the Delivery Date, Church Loans not sustaining any loss on
account of fire, flood, accident, or calamity of a character that
materially adversely affects its business or property, regardless of
whether the loss is insured; no litigation being instituted or
threatened against Church Loans of a character required to be
disclosed in the Registration Statement that is not disclosed and that
shall materially adversely affect Church Loans, its business or its
property; and no substantial adverse change occurring in the
operations or financial condition or credit of Church Loans or in any
conditions affecting the prospects of the business of Church Loans.
Page 12 of 17
G. Church Loans having furnished to the Underwriter on the Delivery Date
a certificate or certificates verified by the President of Church
Loans, certifying that:
1. Each item of the Registration Statement and the information
contained in the Prospectus, and, to the best of his knowledge,
information and belief that information, as of the effective date
of the Registration Statement, was true and correct and did not
omit to state any material fact required to be stated or
necessary in order to make the statements not misleading; and
since the effective date of the Registration Statement no event
has occurred that should have been set forth in an amendment to
the Registration Statement or in a supplement or amendment to the
Prospectus that has not been so set forth in an amendment or
supplement;
2. There is no litigation or proceeding instituted or threatened
against Church Loans of a character required to be disclosed in
the Registration Statement that is not disclosed in the
Registration Statement;
3. There is no contract or arrangement that is required to be
summarized or disclosed in the Registration Statement or filed as
an exhibit to the Registration Statement that has not been
summarized or disclosed or filed;
4. To the best of his knowledge, information and belief, there has
been no substantial adverse change in the general affairs of
Church Loans, or in the financial position of Church Loans during
the period from the date of the latest financial statements
contained in the Registration Statement to the Delivery Date,
except for the changes disclosed or indicated in the Registration
Statement;
5. To the best of his knowledge, information and belief: (i) the
representations and warranties contained in Article I of this
Agreement are true and correct at the Delivery Date; (ii) no stop
order suspending the effectiveness of the Registration Statement
has been issued prior to the Delivery Date and no proceedings for
that purpose, prior to that date, has been initiated or
threatened by the Commission; (iii) every reasonable request by
the Commission for additional information to be included in the
Registration Statement or the Prospectus or otherwise has or will
be complied with; and (iv) prior to the Delivery Date, Church
Loans has not sustained a loss on account of fire, flood,
accident, or calamity of a character that materially adversely
affects its property or business; and
Page 18 of 17
6. Clifton, Gunderson, LLP are independent certified public
accountants within the meaning of the Act, and the rules and
regulations of the Commission, and that the financial statements
audited by them and included in the Registration Statement comply
as to form in all material respects with the applicable
accounting requirements of the Act and the related published
rules and regulations of the Commission, and that, nothing has
come to his attention that causes him to believe that there was
any substantial adverse changes in the capitalization of Church
Loans or the financial position or net worth of Church Loans,
except as disclosed or indicated in the Registration Statement,
and decreases in the capital stock and surplus accounts of Church
Loans from that shown in the Registration Statement or the
Prospectus.
In the event of the failure of any of the above conditions in any material
respect, the Underwriter may be relieved of any and/or all obligations hereunder
or may waive this right and demand full performance hereunder.
IX. Delivery Date
The Delivery Date, as referred to in this Agreement, shall be a date agreed
upon by Church Loans and the Underwriter and failing agreement, then the
Delivery Date shall be the Effective Date of the offering of the Shares.
A. The representations and warranties in this Agreement shall survive the
Delivery Date and shall continue in full force and effect regardless
of any investigation made by the party relying upon any representation
or warranty.
B. This Agreement shall inure to the benefit of, and be binding upon,
Church Loans and the Underwriter (including specifically any dealer
that the Underwriter associates with pursuant hereto), and their
successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person other than the
persons mentioned in the preceding sentence any legal or equitable
right, remedy or claim under or with respect hereto, or any provisions
contained herein. This agreement and all of its conditions and
provisions are for the sole and exclusive benefit of the foregoing
persons and for the benefit of no other person, except that the
warranties, indemnities and agreements of Church Loans contained
herein also shall be for the benefit of any persons, if any, who
control the Underwriter within the meaning of Section 15 of the Act,
and except that the indemnification by the Underwriter shall be for
the benefit of the directors of Church Loans and the officers of
Church Loans who have signed the Registration Statement.
Page 14 of 17
C. This Agreement sets forth the entire agreement between the parties
hereto, and no representation, warranty, understanding, or agreement
not specifically set forth herein shall be implied from this
Agreement.
D. The proceeds received by the Underwriter from the sale of the Shares
shall be remitted to Church Loans not later than noon of the following
business day. The Underwriter will invoice Church Loans for the
applicable commissions owing to Great Nation.
E. The Underwriter shall comply with all of the rules and regulations of
the Commission, NASD, and the state regulatory agencies where the
Shares shall be offered.
F. This Agreement, unless sooner terminated as herein provided, shall
continue until all Shares registered under the Registration Statement
are either sold or withdrawn by Church Loans from registration,
whichever event first occurs.
X. Right to Terminate
Notwithstanding any of the terms and provisions hereof, this Agreement may
be terminated by either party hereto upon fifteen (15) business days prior
written notice. In the event of termination, the Underwriter shall be entitled
to any commissions to which it was entitled as of the date of termination.
XI. Post-Effective Amendments
Church Loans shall prepare and file under the Act any required
post-effective amendments to the Registration Statement and related Prospectus
or new Registration Statements and new related Prospectuses.
If any post-effective amendments or new Registration Statements become
effective, Church Loans shall furnish to the Underwriter similar opinions or
certificates to the same effect as those required by Article VIII of this
Agreement, except that such opinions or certificates shall relate to the
post-effective amendments and new Prospectuses or to the new Registration
Statements and new Prospectuses and to the Shares that are being offered. Church
Loans further agrees with respect to these post-effective amendments and new
Prospectuses and with respect to these new Registration Statements and new
Prospectuses to observe all of the terms and conditions of this Agreement as set
forth in Article III, subdivisions A., B., C., D., E., F., and G. and Article
IV.
XII. Notice
Any notice required or permitted to be given under or pursuant to this
Agreement may be given in writing by depositing the notice in the United States
mail, postage prepaid, by hand-delivery or by courier, or by facsimile,
addressed as follows:
Page 15 of 17
To the Underwriter:
Great Nation Investment Corporation
0000 Xxxx Xxxxxx, Xxxxxxxx X
Xxxxxxxx, Xxxxx 00000
Attn: Mr. Xxxxx Xxx Treat, President
Fax: (000) 000-0000
To Church Loans:
Church Loans & Investments Trust
0000 X-00 Xxxx
Xxxxxxxx, Xxxxx 00000
Attn: Mr. M. Xxxxx Xxxxxx, President
Fax: (000) 000-0000
Copy to:
Xxxxxxx, Xxxxxx & Xxxxxx, L.L.P.
0000 X. Xxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxx, Xx.
Fax: (000)000-0000
Notice shall be deemed given to a party hereunder when actually received by
such party.
XIII. Miscellaneous
A. This Agreement may be modified only in writing signed by the parties
hereto.
B. This Agreement shall be governed and construed in accordance with the
laws of the state of Texas.
C. This Agreement may be signed in various counterparts, which together
shall constitute one and the same instrument.
D. For purposes of any lawsuit or other proceeding in respect to this
Agreement, the undersigned hereby submits and consents to the
jurisdiction of any court of competent jurisdiction sitting in the
State of Texas, Potter County.
Page 16 of 17
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day, month and year first written above.
Church Loans & Investments Trust
/s/ M. Xxxxx Xxxxxx
By:___________________________________
M. Xxxxx Xxxxxx, Its President
Great Nation Investment Corporation
/s/ Xxxxx Xxx Treat
By:___________________________________
Xxxxx Xxx Treat, Its President
Page 17 of 17
