SHAREHOLDER SERVICES
AGREEMENT
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by and between
AMERICAN CHURCH MORTGAGE COMPANY
and
GEMISYS CORPORATION
[LETTERHEAD]
QUOTATION NO.: 2206 DATE OF QUOTATION: December 1, 1994
SHAREHOLDER SERVICES AGREEMENT
CLIENT: American Church Mortgage Company
ADDRESS: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇: Minnesota ZIP: 55426
A binding contract comes into being upon execution of this Shareholder
Services Agreement ("Agreement") by Client and by a duly authorized officer
of GEMISYS. This Agreement, together with the terms and conditions contained
in those Schedules and/or Supplements listed below and executed
contemporaneously with this Agreement, supersedes all prior agreements,
negotiations, representations, and proposals, written or oral, regarding the
subject matter and shall prevail notwithstanding any variance with the terms
and conditions of any order submitted by Client.
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Attached and made a part of this Shareholder Services Agreement are the
following Supplements:
Shareholder Services Agreement Terms and Conditions
Shareholder Services and Fee Supplement
CLIENT: American Church Mortgage Company GEMISYS
SIGNATURE: /s/ V. ▇▇▇▇▇ ▇▇▇▇▇ SIGNATURE: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------- ---------------------------
NAME: V. ▇▇▇▇▇ ▇▇▇▇▇ NAME: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
TITLE: President TITLE: President
DATE: 12-23-94 DATE: 12/19/94
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[LETTERHEAD]
SHAREHOLDER SERVICES AGREEMENT
TERMS AND CONDITIONS
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This Shareholder Services Agreement ("Agreement") is entered into this
19th day of Dec., 1994, by American Church Mortgage Corporation, a Minnesota
corporation ("Client"), whose signatures appear below, and GEMISYS
CORPORATION, a California corporation ("GEMISYS").
RECITALS
This Agreement is made with reference to the following facts, objectives, and
definitions:
A. The Client is a real estate investment trust organized and
registered in the State of Minnesota, which has or will issue shares of
common stock and prospectively preferred stock.
B. GEMISYS is engaged in the business of providing data
processing, securities transfer, administrative, and other services in
connection with the operation of public corporations and other investment
vehicle forms.
C. Unless the context otherwise requires, the following terms when
used in this Agreement shall have the following meanings:
1. AFFILIATE: Any "parent," subsidiary, or other entity
which directly or indirectly through one or more intermediaries controls, is
controlled by, or is in common control with a party.
2. CONFIDENTIAL INFORMATION: That certain confidential and
proprietary information and techniques which GEMISYS has and will develop,
compile, and own, which has great value in its business including, without
limitation, all information that has or could have commercial value or
utility in the business in which GEMISYS, or any persons or entities for whom
GEMISYS performs services ("GEMISYS' Clients") or from whom GEMISYS obtains
information, is engaged or contemplates engaging in. Confidential Information
also includes all information which the unauthorized disclosure of could be
detrimental to the interests of GEMISYS or GEMISYS' Clients, whether or not
such information is identified as Confidential Information by GEMISYS or
GEMISYS' Clients. By example and without limitation, Confidential Information
includes any and all information concerning GEMISYS' reference materials,
procedure manuals, teaching techniques, processes, formulae, specifications,
methods, systems, reports, screen appearances, innovations, inventions,
discoveries, improvements, research or development and test results,
know-how, data, or trade secrets, or other elements created, learned or
developed by GEMISYS in connection with GEMISYS' computer software and with
GEMISYS' performance under this Agreement. Confidential Information also
includes, by
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example and without limitation, any and all GEMISYS marketing and business
plans, strategies, forecasts, unpublished financial information, budgets,
projections, and customer and supplier identities, characteristics, and
agreements.
3. CLIENT DATA: That certain confidential and proprietary
information which the Client has and will develop, compile, and own, which
has great value in its business including, by example and without limitation,
any and all information provided to GEMISYS by the Client or by the Client's
investors or their representatives (as defined below) which concerns the
Client's investors and is contained in the "SUB Client" database sub-system,
or in correspondence, memoranda, or telecommunications.
4. CLIENT INVESTOR(S) OR THEIR REPRESENTATIVE(S): Any owner
of common stock or preferred stock in the Client ("Client Investor") or that
owner's Broker/Dealer or other representative ("Representative"), as
reflected in Client Data provided to GEMISYS.
D. The Client and GEMISYS acknowledge and agree that each has
taken and hereby takes reasonable and affirmative efforts to maintain the
confidentiality of Client Data and Confidential Information.
NOW, THEREFORE, in consideration of the mutual covenants, conditions,
and undertakings set forth below, the Client, and GEMISYS agree as follows:
AGREEMENT
1. PROCESSING SERVICES
1.01 MASTER FILE. GEMISYS shall maintain the file containing all
Client Investor and Representative information previously supplied to GEMISYS
by Client (the "Master File").
1.02 STANDARD SERVICES. GEMISYS shall regularly perform all services
described in Shareholder Services Agreement and the Shareholder Services and
Fee Supplement, attached hereto ("Standard Services").
1.03 QUALITY ASSURANCE. GEMISYS shall perform all Services in a
consistently error-free manner and all output produced by GEMISYS as part of
its Services shall be uniform in appearance, clean, and presentable. For
purposes of this Section, errors are defined as failure to meet the Client's
functional requirements as specified in requests or instructions communicated
to GEMISYS by the Client in connection with GEMISYS' Services. Any error
discovered by the Client shall be promptly corrected by GEMISYS without cost
to the Client, subject to Section 7.05(b), below, provided that the Client
deliver its written or telephonic request for error resolution to GEMISYS
within five (5) business days following the Client's receipt of the erroneous
output. In the event that the Client fails to request error resolution from
GEMISYS
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within that time period, all Services and output produced shall be deemed to
be satisfactory.
1.04 CLIENT REQUESTS AND INSTRUCTIONS. The Client shall be
exclusively responsible for authorizing and communicating to GEMISYS all
Client Data, requests, or instructions in connection with Services. GEMISYS
shall have no authority or duty to supervise the investment of or to make or
issue any instructions or recommendations with respect to the operation or
disposition of the Client or of any securities, limited partner interests, or
other assets owned or controlled by the Client or by Client Investors. Any
Client Data, requests, or instructions received by GEMISYS from the Client or
duly authorized representative of the Client shall be deemed to be genuine
and duly authorized by the Client, and GEMISYS may rely solely upon their
accuracy and upon the authority of the requesting or instructing party in
acting upon such. GEMISYS may rely solely upon the accuracy of information or
instructions received from Client Investors or their Representatives as is
more fully set forth in Section 9.02, below.
1.05 OWNERSHIP OF AND ACCESS TO CLIENT DATA. The Client's records
and information supplied to and utilized by GEMISYS in performing Services
including, without limitation, Client Data, are the exclusive property of the
Client. GEMISYS shall preserve and retain those records and information
during the initial term and any renewal term of this Agreement under
appropriate safeguards to prevent their destruction and to preserve their
confidentiality. The Client shall have access to such records and information
for inspection and audit at the Client's sole expense upon reasonable prior
notice to GEMISYS and during normal business hours.
1.06 OWNERSHIP OF GEMISYS PROGRAMS AND PROCEDURES. All computer
programs and procedures developed by GEMISYS in performing Services
including, without limitation, Confidential Information and user
documentation, are the exclusive property of GEMISYS.
1.07 WARRANTIES. GEMISYS makes no warranty, either express or
implied, in connection with this Agreement or any Services rendered by
GEMISYS pursuant to this Agreement including, without limitation, any
warranty of merchantability or of fitness for a particular purpose.
2. SOFTWARE DEVELOPMENT SERVICES
The Client may request that GEMISYS modify, enhance, or upgrade
GEMISYS' computer programs, Services, or reports due to changes in the
Client's requirements. GEMISYS shall use its best efforts to so meet the
Client's changed requirements within mutually agreed upon time periods. Such
services shall be subject to Section 4.03, below, and GEMISYS shall retain
full proprietary rights in and to any such modification, enhancement, or
upgrade.
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3. TERM AND TERMINATION OF AGREEMENT
3.01 TERM. This Agreement shall be for an initial term of three (3)
years, commencing on January 1, 1995, and shall thereafter be automatically
renewed for successive one (1) year terms unless either party terminates this
Agreement for any reason by written notice of not less than ninety (90) days
to the other party, prior to expiration date of the initial term or of any
renewal term.
3.02 DEFAULT. This Agreement may be terminated by either party upon
the occurrence of any Event of Default which continues uncured for more than
ten (10) days after written notice thereof is received by the defaulting
party from the non-defaulting party. For purposes of this Section, the
occurrence of any one or more of the events described in Section 5.01, below,
or the unauthorized disclosure of Confidential Information or Client Data in
violation of Section 6, below, shall constitute an "Event of Default":
3.03 TRANSITION. Upon termination, the parties shall cooperate in
the orderly transition to a new vendor. Prior to termination, the Client
shall pay in full all fees set forth in Section 4, below, for all Services
performed up to the date of termination, together with all reasonable
attorneys' fees and costs incurred by GEMISYS including, without limitation,
the cost of all unused materials purchased by GEMISYS for the Client's use
and the cost of shipping the same to the Client.
4. FEES
4.01 MASTER FILE FEE. The fee payable by the Client to GEMISYS for
creation of a Master File is included in the Standard Service Fee (as defined
in Section 4.02, below).
4.02 STANDARD SERVICE FEE. The Client shall pay to GEMISYS, as fees
for Standard Services performed for the Client, the sum set out in the
Shareholder Services and Fee Supplement (the "Standard Shareholder Services
Fee"). The Standard Shareholder Services Fee shall be invoiced on a monthly
basis and payment shall be due within thirty (30) days of date of the invoice.
4.03 EXTRAORDINARY SERVICES FEES. The Client shall pay to GEMISYS,
all charges required to produce any extraordinary Services other than
standard services for the Client, on either a mutually agreed upon unit basis
or on the basis of current hourly billing rates for GEMISYS personnel then in
effect and the actual costs of materials used. Such Services shall be
invoiced whenever incurred and payment shall be due upon the Client's receipt
of GEMISYS' invoice.
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4.04 PASS-THROUGH COSTS. In addition to the Standard Service Fee and
any extraordinary Services fees, the Client shall pay or reimburse GEMISYS'
costs incurred in connection with telecommunications, mailing, postage,
printing, delivery, storage, or bonding services to or for the Client or
Client Investors or their Representatives.
4.05 FEE INCREASES. During the initial term or any renewal term of
this Agreement, GEMISYS may increase its fees set forth in Section 4.02,
above, not more than once in any twelve (12) month period, and no such
increase shall exceed the proportionate increase in the Consumer Price Index
for Urban Wage Earners and Clerical Workers for San Francisco-Oakland-San
Jose, California, published by the United States Department of Labor, Bureau
of Labor Statistics, which is published for the month immediately preceding
the date of the commencement of any twelve (12) month period. If the Index is
discontinued or revised during any term, such other government index or
computation shall be used by mutual agreement of the parties in order to
obtain substantially the same results as would be obtained if the Index had
not been discontinued or revised.
4.06 LATE CHARGES; INTEREST ON UNPAID FEES. If the Client should
fail to make any payment of fees due under this Agreement within ten (10)
days of its receipt of GEMISYS' invoice, the Client shall pay to GEMISYS, as
a late charge, an additional sum equal to one and one-half percent (1.5%) per
month of the overdue payment, which amount the parties agree represents a
fair and reasonable estimate of the damages which GEMISYS would sustain as a
result of late payment. The amount of such unpaid fees shall bear interest
from ten (10) days after the due date until paid at the rate of interest from
time to time announced by the Bank of America, San Francisco, California, or
at the maximum rate permissible by law, whichever is greater.
5. TERMINATION
5.01 EVENTS OF DEFAULT. At its option, GEMISYS or the Client shall
have the right to declare the other party to be in default of this Agreement
in the event that the other party:
(a) fails to cure any default (including, without limitation, any
failure to pay any fees when due) within ten (10) days after written notice
thereof is received by that party from the non-defaulting party;
(b) for any reason ceases to conduct business in the normal course;
(c) files (i) a general assignment for the benefit of creditors;
(ii) a petition in bankruptcy, (iii) a petition seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar arrangement under any statute, law, or regulation, or
(iv) an answer admitting the material allegations of a petition against it in
any such proceeding;
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(d) consents to or acquiesces in the appointment of a custodian,
trustee, receiver, or liquidator of it or all or any substantial part of its
assets or properties;
(e) its shareholders or shareholders shall take any action looking
to its dissolution or liquidation; or
(f) becomes subject to any order for relief entered against it by a
bankruptcy court or other court of competent jurisdiction.
5.02 ACTIONS UPON DEFAULT. Upon the declaration by either party of a
default hereunder:
(a) the non-defaulting party shall promptly provide written notice
thereof to the defaulting party;
(b) in the event of a default by the Client, the Client shall cease
using the "SUB Client" database sub-system and shall return to GEMISYS all
GEMISYS programs, procedures, and user documentation without delay; and
(c) the non-defaulting party may, at its option, terminate or
suspend its performance under this Agreement if the default remains uncured
for more than ten (10) days after written notice thereof is received by the
defaulting party.
(d) Upon termination and written request by the Client, and after
all payments due have been received, GEMISYS shall provide within a
reasonable time at a reasonable fee, a copy of all Client Data in the
standard GEMISYS format.
6. CONFIDENTIALITY
6.01 CLIENT'S OBLIGATIONS. The Client acknowledges that during the
performance of this Agreement it may be necessary for GEMISYS to disclose to
the Client certain proprietary information and trade secrets of GEMISYS
developed at GEMISYS' expense including, without limitation, proprietary
information and trade secrets relating to Confidential Information, and to
permit the Clients access to facilities which embody such matter. The Client
acknowledges that the unauthorized disclosure of Confidential Information may
be highly prejudicial to GEMISYS' interests and may constitute an improper
disclosure of trade secrets.
In order to protect GEMISYS' rights in and to Confidential
Information, each shareholdership agrees that Confidential Information shall
be deemed confidential and proprietary to GEMISYS, and shall not be disclosed
by the Client to unauthorized third parties, and shall be safeguarded by the
Client to the same extent that the Client safeguards confidential matters
relating to its own operation, which shall include safeguards that a
reasonably prudent person would take under similar circumstances. To these
ends, each Client shall take such steps as may be necessary to ensure that
neither Confidential Information nor any information comprising or
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relating to Confidential Information is used, copied, replicated in form or
function, modified, disclosed, or made available to third parties by the
Client or its employees, agents, representatives, or affiliates in any manner
or for any purpose other than as provided in this Agreement without prior
written consent of an authorized officer of GEMISYS. Such steps shall
include, without limitation, (i) the taking of appropriate action by each
Client via instruction, agreement, or otherwise with its employees, agents,
representatives, and affiliates permitted access to the Confidential
Information to ensure that each Client's obligations under this Section can
be fully satisfied, and (ii) compliance by each Client and its employees,
agents, representatives, and affiliates with the provisions Section 10.03,
below, if and when that Section should become applicable.
6.02 GEMISYS' OBLIGATIONS. GEMISYS acknowledges that during the
performance of this Agreement it will be necessary for Client to disclose to
GEMISYS certain Client Data relating to each Client's operation and to Client
Investors or their Representatives. GEMISYS acknowledges that the
unauthorized disclosure of Client Data may be highly prejudicial to the
Client's or Client Investors' interests and may constitute an improper
disclosure of trade secrets. In order to protect each Client's rights in
Client Data, GEMISYS agrees the Client Data shall be deemed confidential and
proprietary to the Client, shall not be disclosed by GEMISYS to parties other
than the Client, and shall be safeguarded by GEMISYS to the same extent that
GEMISYS safeguards confidential matters relating to its own operation, which
shall include the safeguards that a reasonably prudent person would take
under similar circumstances. To these ends, GEMISYS shall take such steps as
may be necessary to ensure that neither Client Data nor any information
comprising or relating to Client Data is used, copied, replicated in form or
function, modified, disclosed, or made available to parties other than the
Clients by GEMISYS or by its employees, agents, representatives, or
affiliates in any manner or for any purpose other than as provided in this
Agreement without the prior consent of the Client. Such steps shall include,
without limitation: (i) the taking of appropriate action by GEMISYS via
instruction, agreement, or otherwise with its employees, agents,
representatives, and affiliates permitted access to Client Data to ensure
that GEMISYS' obligations under this Section can be fully satisfied, and (ii)
compliance by GEMISYS and its employees, agents, representatives, and
affiliates with the provisions of Section 10.03, below, if and when that
Section should become applicable.
6.03 EXCEPTIONS. The parties' obligations set forth in Section 6.01
and 6.02, above, shall not apply to: (i) information which is in the public
domain, other than as a result of any breach of this Agreement, or (ii)
information which the Client or GEMISYS is obligated to disclose pursuant to
the lawful order of any court of government instrumentality of the United
States, but only to the extent required by such order and subject to the
provisions of Section 10.03, below.
6.04. REMEDIES UPON BREACH. If the parties or their employees,
agents, representatives, or affiliates attempt to use, disclose, or
misappropriate any Confidential Information or Client Data in any manner
contrary to the terms of this Agreement, the non-disclosing party shall have
the right, in addition to any other remedies which may otherwise be available
to it at law or in equity, to: (i) apply to a court of competent jurisdiction
for an order restraining and enjoining
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such acts or attempts, it being acknowledged by each Client and GEMISYS that
in such event legal remedies are inadequate, and/or (ii) suspend or terminate
this Agreement without the disclosing party's consent and without the
requirements of any additional instructions, authorizations, or signatures of
any persons or entities.
6.05 SURVIVAL OF OBLIGATIONS. All rights and obligations of the
parties set forth in Section 6.01, 6.02, and 6.04, above, shall survive the
expiration or termination of this Agreement and the termination of the
employment, agency, representation, or affiliation of any individual or
entity referred to therein, even if occasioned by the employer's or
principal's breach or wrongful termination.
7. INDEMNIFICATION AND LIABILITY
7.01 INDEMNIFICATION BY GEMISYS. GEMISYS shall indemnify, defend,
and hold harmless each Client and its Managers, employees, agents,
representatives, and affiliates from and against any claims, liability,
losses, damages, and expenses including, without limitation, reasonable
attorneys' fees and costs incurred by each Client, its Managers, employees,
agents, representatives, and affiliates which arise out of or relate to the
negligence or willful misconduct of GEMISYS or from any breach or default by
GEMISYS of any of its obligations under this Agreement or any of its
provisions. In the event that any action or proceeding is brought against the
Client by reason of any claims or liability, GEMISYS shall defend that action
or proceeding at GEMISYS' sole expense by counsel of the Client's choice or
by counsel reasonably satisfactory to the Client.
7.02 INDEMNIFICATION BY THE CLIENTS. The Client shall indemnify,
defend, and hold harmless GEMISYS, and its directors, officers, employees,
agents, representatives, and affiliates from and against any claims,
liability, losses, damages, and expenses including, without limitation,
reasonable attorneys' fees and costs incurred by GEMISYS, its directors,
officers, employees, agents, representatives, and affiliates which arise out
of or relate to: (i) the negligence or willful misconduct of the Client or
the Client's Investors or their Representatives; or (ii) any breach or
default by the Client of any of its obligations under this Agreement or in
connection with the enforcement of this Agreement or any of its provisions,
or (iii) any claim brought against GEMISYS by a third party including,
without limitation, any claim by the Client's Investor(s) or their
Representative(s) which relates in any way to the fulfillment of any
obligation under this Agreement by the Client. In the event that any action
or proceeding is brought against GEMISYS by reason of such claims or
liability, the Client shall defend that action or proceeding at the Client's
sole expense by counsel of GEMISYS' choice or by counsel reasonably
satisfactory to GEMISYS.
7.03 DUTY TO NOTIFY. As an express condition precedent to either
party's rights or obligations described in Sections 7.01 and 7.02, above, the
party invoking its right to indemnification ("the indemnified party") must
provide written notification of any such claim or liability to the party from
whom indemnification is sought (the "Indemnifying Party") within
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reasonable time after the indemnified party's receipt of the written claim
against it. As used in this Section, "reasonable time" shall mean that period
of time within which the rights or interests of the Indemnifying Party in
defending that claim or liability are not substantially prejudiced or
impaired as a result of delay by the Indemnified Party. This condition
precedent is deemed to be for the benefit of both the Clients and GEMISYS,
and may be waived only by the Indemnified Party in writing.
7.04 SURVIVAL OF INDEMNITIES. The rights and obligations of the
parties set forth in Sections 7.01, 7.02, and 7.03, above, shall survive the
expiration or termination of this Agreement with respect to any claim or
liability occurring prior to such expiration or termination.
7.05 LIMITATIONS ON LIABILITY. Notwithstanding the provisions of
Sections 7.01 and 7.02,
(a) CONSEQUENTIAL DAMAGES. No party shall bear any liability under
this Agreement for any lost profits or consequential, special, or indirect
damages, even if a party has been informed of the possibility of such damages
or could have reasonably foreseen them.
(b) ERROR. GEMISYS' liability in the event of any request by the
Client for error resolution pursuant to Section 1.03, above, shall not exceed
GEMISYS' internal costs incurred in investigating and correcting the error
identified.
(c) FORCE MAJEURE. In no event shall any party bear any
responsibility for delays or failures in the performance of its obligations
under this Agreement which result from acts beyond that party's control, and
such party shall be excused from such delays or performance. Such acts shall
include, without limitation, acts of God, strikes, lockouts, riots, acts of
war, epidemics, any act or omission by any governmental authority,
regulations or restrictions superimposed after the fact by any governmental
authority, fire, explosions, communications line failures, power failures,
earthquakes, or other disasters. At all times during the performance of this
Agreement, GEMISYS shall maintain a reasonable recovery plan providing for
back-up capability in the event of any unplanned interruption of its
operations or inaccessibility to its computer facilities.
(d) VALUE OF CONTRACT. In no event shall GEMISYS' liability under
this Agreement, in the aggregate, exceed six (6) months Standard Service Fee.
8. COOPERATION AND ACCESS TO INFORMATION
8.01 COOPERATION OF THE PARTIES. The parties agree to cooperate and,
if requested, to use all efforts reasonably required to assist the other
party in fulfilling its obligations under this Agreement. In the event that
any party is (a) involuntarily made a party-defendant to any litigation
concerning this Agreement or any Client-sponsored investment vehicle, or (b)
subjected to or suffers any claim, liability, loss, damage, or expense as
described in Sections 8.01 or 8.02,
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above, the parties agree to execute and deliver any instrument, furnish any
information, or perform any other act reasonably necessary to assist the
other party in defending such litigation, claim, or liability without undue
delay or expense.
8.02 ACCESS TO RECORDS AND DOCUMENTS. The parties shall maintain,
preserve, and make available to one another all printed materials including,
without limitation, negotiation notes, internal memoranda, Agreement drafts,
and post-Agreement documents and correspondence relevant to this Agreement,
in the event of the commencement of any litigation (including claims or
liabilities under Section 7.01 and 7.02 under this Agreement) arising out of
any breach or default under this Agreement or in connection with the
enforcement of this Agreement or any of its provisions. The requesting party
shall have the right to examine and make copies of such materials upon
reasonable prior notice to the non-requesting party and during normal
business hours. Original materials shall be retained by the parties for a
period of not less than six (6) years following the date of termination or
expiration of this Agreement.
9. RELATIONS OF ENTITIES
9.01 RELATIONS BETWEEN THE PARTIES. GEMISYS shall act solely as an
independent contractor to each Client and neither GEMISYS nor any GEMISYS
employee shall be the employee of any Client or its agent for any purpose. No
party is granted any express or implied right or authority by any other party
to assume or create any obligation or responsibility on behalf of or in the
name of any other party, or to bind any other party in any manner or thing
whatsoever. GEMISYS is not in any way a fiduciary, named or unnamed, actual
or constructive, under this Agreement or under any Client-sponsored
investment vehicle. GEMISYS shall be responsible only for those duties and
responsibilities detailed in this Agreement and it shall have no
discretionary powers or abilities other than those specifically set forth in
this Agreement, if any. No implied covenant or obligation shall be read into
this Agreement against GEMISYS.
9.02 RELATIONS BETWEEN GEMISYS AND THIRD PARTIES. In performing its
Services under this Agreement GEMISYS may rely solely upon the accuracy of
all facts and representations supplied or made at any time by Client
Investor(s) or their Representative(s) which GEMISYS reasonably believes to
be genuine. GEMISYS shall be protected in accordance with Sections 1.04 and
7.02, above, in the event that GEMISYS reasonably relies solely upon the
instructions or information received from a duly authorized representative of
the Client or Client Investor(s) or their Representative(s) in effecting any
transactions with respect to the Client, and GEMISYS shall be under no duty
to inquire or ascertain whether the approval or direction of the Client
Investor or its Representative(s) has been lawfully obtained.
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10. DISPUTE RESOLUTION
10.01 ARBITRATION. If any controversy or claim arises between the
parties concerning this Agreement or the rights or duties of any party in
relation thereto or by reason of the breach of alleged breach thereof, then
that controversy or claim shall be submitted to arbitration in the County of
Santa ▇▇▇▇▇, State of California, in accordance with the rules then
prevailing of the American Arbitration Association.
10.02 JUDGMENT. Any judgment on the award rendered by the
arbitrator(s) under Section 10.01, above, may be entered and enforced in any
court of competent jurisdiction, provided, that within seven (7) days after
service of that award on the parties, no party has served the other party
with a written rejection of and election not to be bound by that
arbitrator(s)' award. If either party rejects the award in a timely manner,
then the parties shall submit their dispute to a binding adjudication before
a retired judge of the Superior Court of California for the Counties of Santa
▇▇▇▇▇, San Mateo, San Francisco, or Marin in accordance with Section 638 of
the California Code of Civil Procedure. Any judgment on the award rendered by
the retired judge under this Section may be entered and enforced in any court
of competent jurisdiction.
10.03 PROTECTION OF PROPRIETARY INFORMATION. In the event of
arbitration, private adjudication, or litigation between the parties
concerning this Agreement or the rights or duties of any party in relation
thereto or by reason of the breach or alleged breach thereof, then any
document or material of any type, form, or media which is proffered as
evidence or is otherwise presented, submitted, or filed therein which
contains, may contain, or is designated as containing any Confidential
Information or Client Data shall be: (i) placed under seal or other safeguard
adequate to prevent any publication, misappropriation, or disclosure which
may endanger the proprietary nature or status of that Information or Data;
and (ii) designated as "Confidential" by any manner reasonably calculated to
impart notice that such Information or Data is being disclosed; and (iii)
used only for the purpose of conducting that arbitration or litigation; and
(iv) subject to a protective order to avoid unnecessary disclosure therein
and, if necessary, to an order restraining further disclosure, by both of
which the parties and their counsel shall abide.
10.04 ATTORNEYS' FEES. Each party shall be responsible for the
payment of its attorneys' fees, costs, and expenses previously incurred, or
to be incurred in the future, in connection with the preparation, drafting,
and execution of this Agreement or any amendment to it. In the event that
arbitration or litigation is commenced between the parties concerning this
Agreement or the rights or duties of any party in relation thereto or by
reason of the breach of alleged breach thereof, then the prevailing party in
such a proceeding shall be entitled to its reasonable attorneys' fees and
costs incurred as a result, the amount of which shall be determined by the
judge or court or in a separate action brought for that purpose.
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11. NON-HIRING OF EMPLOYEES
During the term of this Agreement, and for a period of two (2) years
immediately following the termination or expiration of this Agreement, the
parties shall not interfere with the business of one another in any manner
including, without limitation, by inducing any Client or GEMISYS employee to
leave the others' employ or by inducing a consultant or other independent
contractor to breach that person's contract with the Client or with GEMISYS.
12. NON-COMPETITION
During the term of this Agreement, the Client, the Client's Managers,
the Client's sponsors, and their affiliates shall not solicit the trade or
patronage of GEMISYS' clients or potential clients of GEMISYS for the purpose
of rendering services similar to those to be performed by GEMISYS under this
Agreement, whether or not competitive therewith.
13. MISCELLANEOUS
13.01 NOTICES. Any notice, consent, demand, request, or other
communication required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given on the date of service if served
personally, or on the third (3rd) day after mailing if sent by first class,
postage prepaid United States mail and addressed to the addressee at the
address stated opposite its name set forth below, or at the most recent
address specified by written notice given to the sender by the addressee
under this Section. Such written communication(s) shall be addressed as
follows:
TO THE CLIENT: American Church Mortgage Company
Mr. V. ▇▇▇▇▇ ▇▇▇▇▇, President
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
TO GEMISYS: GEMISYS CORPORATION
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
13.02 ASSIGNMENT RESTRICTED. None of the Client's rights and
obligations under this Agreement may be assigned or transferred without the
prior written consent of GEMISYS, which consent shall not be unreasonably
withheld.
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SHAREHOLDER SERVICES - TERMS AND CONDITIONS
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13.03 RULES OF CONSTRUCTION. The rule of construction, to the effect
that any ambiguities are to be resolved against the drafting party, shall not
be employed in the interpretation of this Agreement or any amendment to it.
No course of dealing, usage of trade, or course of performance shall be
relevant to explain or supplement any terms of this Agreement. All activities
undertaken by GEMISYS pursuant to this Agreement shall constitute "services"
and shall not be considered as "goods" by or under any definition or law.
13.04 WARRANTY OF CAPACITY TO EXECUTE AGREEMENT. The Client and
GEMISYS hereby represents and warrants to the other that no other person or
entity has any interest, liens, or assignment at law or in equity or
otherwise which would materially impair its ability to perform its
obligations under this Agreement. The Client further represents and warrants
that the persons executing this Agreement on behalf of that corporation have
the sole right and exclusive authority to do so, and have the authority to
bind the Client to this Agreement and to execute such other documents as may
be required to be delivered under it on behalf of the Client. The Client and
GEMISYS further represents and warrants that each has the sole right to
receive the services, sums, or other consideration specified in it, and is
fully entitled to enter into this Agreement.
13.05 Taxes. While GEMISYS knows at this time of no taxes applicable
to it as a result of the execution and performance of this Agreement other
than income taxes, each Client shall pay or reimburse GEMISYS for any other
taxes, excluding income or similar taxes, levied upon GEMISYS in connection
with the Services performed for the Client. GEMISYS shall have no duty to see
to the payment or discharge of any tax or other governmental charge or lien
of any kind owing with respect to, assessed, or levied against the assets of
the Client or any other Client-sponsored investment vehicle, or to the filing
of any tax or other governmental information in connection with any
Client-sponsored investment vehicle.
13.06 RIGHT OF REVIEW OF CLIENT MATERIALS. Except for those Client
materials which identify GEMISYS merely as "Transfer Agent," "Investor
Services Representative," or other similarly descriptive title, the Client
shall deliver to GEMISYS draft copies of all printed Client materials
intended for public distribution or distribution to Client Investors or their
Representatives which identify or refer to GEMISYS including, without
limitation, prospectuses or promotional materials, on or before the tenth
(10th) business day prior to that document's proposed distribution date.
GEMISYS shall have the right to review and to object to any such document
which it reasonably believes creates a legal duty or liability on GEMISYS'
part which it has not expressly agreed to assume under this Agreement.
GEMISYS' objection(s), if any, shall be in writing and shall be delivered to
the Client within five (5) business days after GEMISYS' receipt of the Client
materials. The Client shall not distribute any document so objected to unless
and until GEMISYS' objection(s) has been addressed to the reasonable
satisfaction of both parties.
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AMERICAN CHURCH MORTGAGE COMPANY
SHAREHOLDER SERVICES - TERMS AND CONDITIONS
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14. GENERAL PROVISIONS
14.01 GOVERNING LAW. This Agreement is executed and intended to be
performed in the State of California, and the laws of the State of California
shall govern its interpretations, construction, enforcement, and effect.
Except as provided in Sections 10.01 and 10.02, above, the forum for the
resolution of any dispute arising out of this Agreement shall be the Superior
Court of the State of California in and for the County of Santa ▇▇▇▇▇. Each
party agrees to submit to the jurisdiction of such Court and that venue is
proper therein.
14.02 SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of the respective successors, heirs, assigns, and legal
representatives of the parties, except to the extent of any contrary
provision in this Agreement.
14.03 SEVERABILITY. If any term, provision, covenant, or condition of
this Agreement is held by a court of competent jurisdiction to be invalid,
void, or unenforceable, then the rest of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired, or invalidated.
14.04 CAPTIONS. The captions to the various sections of this
Agreement are for convenience only. Those captions or titles shall not amend
or modify this Agreement, or be resorted to in interpreting it.
14.05 GENDER, ETC. As used in this Agreement, the masculine,
feminine, or neuter gender, and the singular or plural number, shall be
deemed to include the others whenever the context so indicates or requires.
14.06 REMEDIES NOT EXCLUSIVE AND WAIVERS. No remedy conferred by any
of the provisions of this Agreement is intended to be exclusive of any other
remedy, and each and every remedy shall be cumulative and shall be in
addition to every other remedy given under this Agreement or now or hereafter
existing at law or in equity or by statute or otherwise. The election of any
one or more remedies shall not constitute a wavier of the right to pursue
other available remedies.
14.07 WAIVER. No waiver of any provisions of this Agreement shall be
valid unless in writing and signed by the party against whom charged.
14.08 SCHEDULES. The Exhibit and all of the Schedules attached to
this Agreement and all schedules or exhibits to the Schedules attached to
this Agreement are incorporated herein as though set forth in full and shall
be considered as a material part of the Agreement of the parties.
14.09 SURVIVAL. The provisions, representations, and warranties
contained in this Agreement shall survive GEMISYS' delivery of Services and
the Clients' payment of any Fees.
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SHAREHOLDER SERVICES - TERMS AND CONDITIONS
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14.10 ENTIRE AGREEMENT. This Agreement contains the entire agreement
of the parties relating to the rights granted and obligations assumed in this
Agreement. Any modifications or amendments must be in writing and signed by
the parties. The parties acknowledge that such modifications or amendments
may also include or result in changes in the various Schedules attached
hereto.
14.11 CONFIDENTIALITY. Client shall treat the terms of this Agreement
as confidential; provided, however, that Client shall be permitted, as
required by the terms of the corporate charter and bylaws, the securities
laws of the United States, or other regulatory authority, to disclose the
terms hereof, but only to the extent required by such agreements, laws, or
authority.
14.12 COUNTERPART COPIES. This Agreement may be signed in counterpart
or duplicate copies, and any signed counterpart or duplicate copy shall be
equivalent to a signed original for all purposes.
IN WITNESS WHEREOF, Client, and GEMISYS execute this Agreement as of
12-1, 1994.
Date: 12-23 , 1994. American Church Mortgage Company
------------------ a Minnesota corporation
By: /s/ V. ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
V. ▇▇▇▇▇ ▇▇▇▇▇
President
Date: 12/19 , 1994. GEMISYS CORPORATION
---------------------- a California corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
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[LETTERHEAD]
SHAREHOLDER SERVICES AND FEE SUPPLEMENT
CLIENT: American Church Mortgage Company DATE: December 1, 1994
ADDRESS: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇: Minnesota ZIP: 55426
--------------------------------------------------------------------------------
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This Shareholder Services and Fee Supplement includes all services stated
below and detailed in the following supplement to cover the services in
support of American Church Mortgage Company ("Client") intention to raise new
capital in the form of a Real Estate Investment Trust (REIT) entity and to be
traded on the NASDAQ or over-the-counter.
Some variable services and pass through charges are set forth within the
standard services package below, in order to present them in the appropriate
service sequence order. However, these variable charges will be extra to
Client and include printed materials, forms, laser printing, mailing
services, postage and telephone services.
I. STANDARD SHAREHOLDER SERVICES PACKAGE
- Initial set-up fee, to be paid upon execution $1,000
- Monthly Standard Shareholder Services fee;
- up to 500 shareholders $ 500/month*
- 500 or more shareholders $0.50/shareholder/month
Note:
These fees shall not exceed a maximum of $2,000 monthly for Standard
Shareholder Services Fees. For fee purposes, all recordholders and
streetname investors will be counted if identifiable on the Transfer
Agency System.
* This monthly Standard Shareholder Services fee should commence the
month that the Initial Public Offering breaks impound.
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AMERICAN CHURCH MORTGAGE COMPANY
SHAREHOLDER SERVICES AND FEE SUPPLEMENT
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1. ACCOUNT MAINTENANCE AND RECORDKEEPING SERVICES INCLUDED
- "Stockwatch" services, including
- Unlimited Ad-hoc demographic and marketing reports
- Shareholder phone services
- Account administration
- Complete maintenance of shareholder records
- Reply to general shareholder requests
- Process address changes
- Confirmation letter on Postal Service address change
notices
- Process daily correspondence
- Bond of Indemnity insurance forms
2. STOCK TRANSFER AGENT AND REGISTRAR INCLUDED
- Review transfers for endorsements, signature guarantees,
and produce routine correspondence necessary to correct
deficiencies, in compliance with SEC, NASD and NYSE rules
relating to stock transfers
- Issue new certificates
- Maintain stock and note register
- Cancel old certificates
- Register certificates
- Mail stock certificates
- Maintain stock certificates inventory
- Insurance for mailing of certificates
- Monitor processing time for transfers
- Update records to reflect debits and credits
- Maintain stop transfer file
- Process daily transfers
- Produce transfer journals (daily)
- Process priority and exception items
- Process stock options
- Place restrictions and legends on stock
- Replace lost or stolen certificates, process Surety Bonds
and file notice of loss with SEC
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AMERICAN CHURCH MORTGAGE COMPANY
SHAREHOLDER SERVICES AND FEE SUPPLEMENT
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3. DIVIDEND DISBURSEMENT SERVICES QUARTERLY PAYMENT - INCLUDED
MONTHLY PAYMENT - $0.20/CHECK
- Prepare monthly or quarterly dividends payment checks
- Issue checks from a GEMISYS controlled bank account
- Print and sign roll-up checks to ▇▇▇ custodians or other
payees
- Print investor Payment Advices
- Insert checks and one additional insert, sort and mail
- Prepare a hardcopy dividend list as of each dividend record
date
- Deduct back-up withholding and nonresident alien tax
- Reconcile and report taxes withheld to IRS
- Coding "undeliverable" accounts to suppress mailing future
dividend checks, after attempts made to locate
shareholders.
- Process and track accumulated, uncashed dividends
- Furnish requested dividend information to stockholders
- Receive investor, check re-issue requests
- Receive and issue stop-payments
- Replace lost dividend checks
- Provide photocopies of canceled checks when requested
- Provide broker dividend summary and letter (at Client's
option)
- Form W9 solicitation, performed annually
- Establish and maintain dividend check inventory
- Prepare and file magnetic Federal Information Returns (as
needed - 1099-DIV, 1009-INT) of dividends paid in a year,
and mail a statement to each shareholder
- Provide duplicate copies of Forms 1099 and 1042, as
requested by shareholder
- Prepare and file magnetic State Information Returns of
dividends paid in a year to shareholders within such state.
4. BANK RECONCILIATION NO CHARGE
- Provide on-line check inquiry
- Load bank account data by modem daily, or periodically by
tape
- Process automated check reconciliation
- Maintain check register
- Reconcile paid and outstanding checks
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AMERICAN CHURCH MORTGAGE COMPANY
SHAREHOLDER SERVICES AND FEE SUPPLEMENT
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5. DIVIDEND REINVESTMENT PLAN SERVICES INCLUDED
- Coordinate the Dividend Reinvestment Plan participants
request to acquire additional shares in the REIT, in lieu
of return cash.
- Issue the needed shares from treasury stock of Client set
aside for this purpose
- Generate a Dividend Reinvestment "Payment Advice" and
forward it to each participant in the DRP Plan.
6. ANNUAL PROXY, ANNUAL MEETING, AND RELATED SERVICES INCLUDED
- Prepare a full shareholder list (certified) as of the
Annual Meeting Record Date
- Address proxy cards
- Receive, open and examine returned proxies
- Attempt to remedy unsigned or improperly executed proxies
- Provide summary reports on status of tabulation, on a daily
basis
- Vote Transaction Summary Report, on-line and hard-copy
- Descending Share Balance Report
- Responding to inquiries as to whether specific accounts
have yet voted
- Tabulating returned proxies including multiple issues
- Preparing a final Annual Meeting list reflecting how each
account has voted on each proposal
- Provide Inspector of Election at annual meeting
II. VARIABLE SERVICES
1. MAIL QUARTERLY AND ANNUAL REPORTS See mail costs below
- Address, insert and mail quarterly reports (three per
annum)
- Address, insert and mail annual report (in Bipak envelope
with proxy card, proxy statement and return envelope, if
applicable)
2. MISCELLANEOUS REPORTS $0.04/page
- Prepare 25 ad hoc reports for Client
- Prepare 5 tapes or transmission reports to be formatted
- Prepare 5 annual proxy demographic reports
- Prepare 2 full shareholder lists
- Prepare 2 lists of new shareholders
- Prepare 52 weekly reports of top shareholders
- Prepare escheat fulfillment reports, as needed
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