PROMISSORY NOTE


 


	Borrower:	
        American Church Mortgage Company

        10400 Yellow Circle Dr Ste
        102

        Minnetonka, MN 55343
	Lender:	
        Alerus Financial, N.A.

        2300 S Columbia Rd

        Grand Forks, ND 58201

        (800) 279-3200



 


	Principal Amount:  $4,000,000.00	Date of Note:  April 9, 2018


 


PROMISE TO PAY. American
Church Mortgage Company ("Borrower") promises to pay to Alerus Financial, N.A. ("Lender"), or order, in lawful
money of the United States of America, the principal amount of Four Million & 00/100 Dollars ($4,000,000.00) or so much as
may be outstanding, together with interest on the unpaid outstanding principal balance of each advance. Interest shall be calculated
from the date of each advance until repayment of each advance.


PAYMENT. Borrower will pay
this loan in one payment of all outstanding principal plus all accrued unpaid interest on April 9, 2019. In addition, Borrower
will pay regular monthly payments of all accrued unpaid interest due as of each payment date, beginning May 1, 2018, with all subsequent
interest payments to be due on the same day of each month after that. Unless otherwise agreed or required by applicable law, payments
will be applied first to any accrued unpaid interest; then to principal; then to any late charges; then to any escrow or reserve
account payments as required under any mortgage, deed of trust, or other security instrument or security agreement securing this
Note; and then to any unpaid collection costs. Borrower will pay Lender at Lender's address shown above or at such other place
as Lender may designate in writing.


VARIABLE
INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an independent index
which is the prevailing London Interbank Offered Rate (LIBOR) for deposits in U.S. dollars having a maturity equal to one month
(the “Index”)
as published by Bloomberg Financial Markets Information Services (the "Index"). The Index is not necessarily the lowest
rate charged by Lender on its loans. If the Index becomes unavailable during the term of this loan, Lender may designate a substitute
index after notifying Borrower. Lender will tell Borrower the current Index rate upon Borrower's request. The interest rate change
will not occur more often than each month. Borrower understands that Lender may make loans based on other rates as well. The
Index currently is 1.883% per annum. Interest on the unpaid principal balance of this Note will be calculated as described
in the "INTEREST CALCULATION METHOD" paragraph using a rate of 2.700 percentage points over the Index, rounded to the
nearest 0.001 percent, adjusted if necessary for any minimum and maximum rate limitations described below, resulting in an initial
rate of 4.583%. NOTICE: Under no circumstances will the interest rate on this Note be less than 4.250% per annum or more than the
maximum rate allowed by applicable law.


INTEREST CALCULATION METHOD.
Interest on this Note is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding.
All interest payable under this Note is computed using this method.


PREPAYMENT. Borrower
may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by
Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments of accrued unpaid interest. Rather, early
payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked "paid in full", "without
recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights
under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning
disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in
full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount
must be mailed or delivered to: Alerus Financial, N.A., Main Office, P.O. Box 6001 Grand Forks, ND 58206-6001.


LATE CHARGE. If a payment
is 10 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment or $500.00,
whichever is less.


INTEREST AFTER DEFAULT.
Upon default, including failure to pay upon final maturity, the total sum due under this Note will continue to accrue interest
at the interest rate under this Note. However, in no event will the interest rate exceed the maximum interest rate limitations
under applicable law.


DEFAULT. Each of the
following shall constitute an event of default ("Event of Default") under this Note:


Payment Default.
Borrower fails to make any payment when due under this Note.


Other Defaults.
Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any
of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement
between Lender and Borrower.


Default in Favor of
Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's property
or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents.


False Statements.
Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the
related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false
or misleading at any time thereafter.


Insolvency. The
dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver
for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement
of any proceeding under any bankruptcy or insolvency laws by or against Borrower.


Creditor or Forfeiture
Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession
or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes
a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not
apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits
with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion,
as being an adequate reserve or bond for the dispute.


Events Affecting Guarantor.
Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the indebtedness
or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of,
or liability under, any guaranty of the indebtedness evidenced by this Note.


Change In Ownership.
Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.


Adverse Change.
A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of
this Note is impaired.


Insecurity. Lender
in good faith believes itself insecure.


DEPOSIT ACCOUNT SECURITY
INTEREST. In addition to other collateral, if any, that may secure this Note, Grantor grants to Lender a security interest
in all Deposit Accounts including but not limited to: Checking Accounts, Time Accounts, Savings Accounts and other similar Accounts.


LENDER'S RIGHTS. Upon
default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due,
and then Borrower will pay that amount.


ATTORNEYS' FEES; EXPENSES.
Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender's reasonable attorneys' fees and Lender's legal expenses, whether
or not there is a lawsuit, including reasonable attorneys' fees, expenses for bankruptcy proceedings (including efforts to modify
or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, Borrower also will pay any court
costs, in addition to all other sums provided by law.






    	 		 



     


    

 


JURY WAIVER. Lender and Borrower
hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower against
the other.


GOVERNING LAW. This Note
will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of
Minnesota without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of Minnesota.


CHOICE OF VENUE. If there
is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Hennepin County, State of Minnesota.


DISHONORED ITEM FEE.
Borrower will pay a fee to Lender of $29.00 if Borrower makes a payment on Borrower's loan and the check or preauthorized charge
with which Borrower pays is later dishonored.


RIGHT OF SETOFF. To the
extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower
may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would
be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing
on the indebtedness against any and all such accounts, and, at Lender's option, to administratively freeze all such accounts to
allow Lender to protect Lender's charge and setoff rights provided in this paragraph.


LINE OF CREDIT. This
Note evidences a revolving line of credit. Advances under this Note may be requested either orally or in writing by Borrower or
as provided in this paragraph. Lender may, but need not, require that all oral requests be confirmed in writing. All communications,
instructions, or directions by telephone or otherwise to Lender are to be directed to Lender's office shown above. The following
person or persons are authorized to request advances and authorize payments under the line of credit until Lender receives from
Borrower, at Lender's address shown above, written notice of revocation of such authority: Advances may be requested by: Philip
J Myers or Scott J Marquis. Borrower agrees to be liable for all sums either: (A) advanced in accordance with the instructions
of an authorized person or (B) credited to any of Borrower's accounts with Lender. The unpaid principal balance owing on this Note
at any time may be evidenced by endorsements on this Note or by Lender's internal records, including daily computer print-outs.
Lender will have no obligation to advance funds under this Note if: (A) Borrower or any guarantor is in default under the terms
of this Note or any agreement that Borrower or any guarantor has with Lender, including any agreement made in connection with the
signing of this Note; (B) Borrower or any guarantor ceases doing business or is insolvent; (C) any guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such guarantor's guarantee of this Note or any other loan with Lender; (D) Borrower has applied
funds provided pursuant to this Note for purposes other than those authorized by Lender; or (E) Lender in good faith believes itself
insecure.


SUCCESSOR INTERESTS.
The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns,
and shall inure to the benefit of Lender and its successors and assigns.


ERRORS AND OMISSIONS.
Borrower agrees, if requested by Lender, to fully cooperate in the correction, if necessary, in the reasonable discretion of Lender
of any and all loan closing documents so that all documents accurately describe the loan between Lender and Borrower. Borrower
agrees to assume all costs including by way of illustration and not limitation, actual expenses, legal fees and marketing losses
for failing to reasonably comply with Lenders request within thirty (30) days.


GENERAL PROVISIONS. If
any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any
of its rights or remedies under this Note without losing them. In addition, Lender shall have all the rights and remedies provided
in the related documents or available at law, in equity, or otherwise. Except as may be prohibited by applicable law, all of Lender's
rights and remedies shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy
shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation
of Borrower shall not affect Lender's right to declare a default and to exercise its rights and remedies. Borrower and any other
person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice
of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this
Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that
Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or
impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary
by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the
consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint
and several.


SECTION DISCLOSURE. To
the extent not preempted by federal law, this loan is made under Minnesota Statutes, Section 48.195.


PRIOR TO SIGNING THIS NOTE,
BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES
TO THE TERMS OF THE NOTE.


BORROWER ACKNOWLEDGES RECEIPT
OF A COMPLETED COPY OF THIS PROMISSORY NOTE.


BORROWER:


AMERICAN CHURCH MORTGAGE COMPANY


 


By: _____________________________________________


Philip J Myers, President
of American Church Mortgage Company


LaserPro, Ver. 17.4.10.006
Copr. D+H USA Corporation 1997, 2018. All Rights Reserved. - MN L:\CFI\LPL\D20.FC TR-10128 PR-4 (M)