Document:

FORM OF

                           LOAN AND SECURITY AGREEMENT

                                 BY AND BETWEEN

                                   BEACON BANK

                                       AND

                        AMERICAN CHURCH MORTGAGE COMPANY

                        Dated As Of September _____, 2008

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EXHIBIT A -- BORROWING BASE CERTIFICATE

EXHIBIT B - BOND/MORTGAGE LOAN CERTIFICATE

EXHIBIT C -- COMPLIANCE CERTIFICATE

EXHIBIT D -- BUSINESS AND COLLATERAL LOCATIONS

SCHEDULE 9(g) -- LITIGATION

SCHEDULE 9(i) -- AFFILIATED TRANSACTIONS

SCHEDULE 9(j) -- NAMES & TRADE NAMES

SCHEDULE 9(m) -- INDEBTEDNESS

SCHEDULE 9(o) -- PARENT, SUBSIDIARIES AND AFFILIATES

SCHEDULE 11(g) - AFFILIATE TRANSACTIONS

SCHEDULE 15(a) -- CLOSING DOCUMENT CHECKLIST

                                      -i-
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                           LOAN AND SECURITY AGREEMENT

     THIS LOAN AND SECURITY AGREEMENT (as amended, modified or supplemented from
time to time,  this  "Agreement")  made this ____ day of September,  2008 by and
between  BEACON BANK, a Minnesota  banking  corporation  (the  "Lender"),  19765
Highway 7, Shorewood, MN 55331 and AMERICAN CHURCH MORTGAGE COMPANY, a Minnesota
corporation,  having its  principal  place of  business at 10237  Yellow  Circle
Drive, Minneapolis, MN 55343 (the "Borrower").

                              W I T N E S S E T H:
                               - - - - - - - - - -

     WHEREAS,  Borrower may, from time to time,  request Loans from Lender,  and
the parties wish to provide for the terms and  conditions  upon which such Loans
or other financial accommodations, if made by Lender, shall be made;

     NOW, THEREFORE, in consideration of any Loan (including any Loan by renewal
or  extension)  hereafter  made to  Borrower  by Lender,  and for other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged by Borrower, the parties agree as follows:

     1.   DEFINITIONS.

     "Account",   "Account  Debtor",   "Chattel  Paper",   "Deposit   Accounts",
"Documents",   "Electronic  Chattel  Paper",  "General  Intangibles",   "Goods",
"Instruments",  "Inventory",  "Investment  Property",  "Proceeds"  and "Tangible
Chattel Paper" shall have the respective  meanings assigned to such terms in the
Minnesota  Uniform  Commercial  Code,  as the same may be in effect from time to
time.

     "Affiliate" shall mean any Person (i) which directly or indirectly  through
one or more  intermediaries  controls,  is  controlled  by,  or is under  common
control with, Borrower,  (ii) which beneficially owns or holds five percent (5%)
or more of the voting  control or equity  interests of  Borrower,  or (iii) five
percent  (5%) or more of the  voting  control  or equity  interests  of which is
beneficially owned or held by Borrower.

     "Bond/Mortgage Loan Certificate" shall mean a certificate  executed by both
the president and the chief  financial  officer of the Borrower for any Bonds or
Mortgage Loans which  Borrower  proposes to include in the Borrowing Base in the
form set forth on Exhibit B.

     "Bonds"  shall mean the first  mortgage  serial  Bonds of a  Mortgage  Loan
Obligor  purchased by  Borrower,  secured by a first  mortgage  lien or security
title to the real  property  owned by the issuer of such Bond,  which Bonds have
been  delivered by Borrower to Lender or are held in the ICA Account as security
for the  Liabilities  in order  to  achieve  the  required  collateral  coverage
covenant  under  Section  12(b)  hereof  and  which  are  otherwise  in form and
substance acceptable to Lender.

     "Borrowing Base" shall mean the meaning set forth in Section 4(a).

<PAGE>

     "Borrowing  Base  Certificate"  shall  mean  the  form  of the  certificate
attached hereto as Exhibit A.

     "Business  Day" shall mean any day other than a  Saturday,  a Sunday or any
day that banks in Minneapolis, Minnesota are required or permitted to close.

     "Collateral"  shall  mean all of the  property  of  Borrower  described  in
Section  4 hereof  together  with all other  real or  personal  property  of any
Obligor or any other Person now or hereafter pledged to Lender to secure, either
directly or indirectly,  repayment of any of the  Liabilities.  Collateral shall
not include any Excluded Collateral.

     "ERISA" shall mean the Employee  Retirement Income Security Act of 1974, as
amended, modified or restated from time to time.

     "Event of Default" shall have the meaning specified in Section 13 hereof.

     "Excluded Bonds and Excluded  Mortgage Loans" shall mean all Mortgage Loans
or Bonds  that have been or will be  pledged  by  Borrower  to secure  Permitted
Indebtedness.  Excluded  Bonds and  Excluded  Mortgage  Loans do not include any
Bonds or Mortgage  Loans which are  required  to be part of the  Borrowing  Base
unless the same have been released  pursuant to the terms of this  Agreement and
the Other Agreements.

     "Excluded  Collateral"  shall  mean any and all  property  of the  Borrower
securing  Excluded  Bonds and Excluded  Mortgage Loans and any other property of
Borrower which is not Collateral.

     "Fiscal  Year"  shall  mean each  twelve  (12) month  accounting  period of
Borrower, which ends on December 31st of each year.

     "ICA  Account"  shall mean the account at Herring  Bank which is subject to
the Securities Account Control Agreement.

     "Indemnified Party" shall have the meaning specified in Section 16 hereof.

     "Indentures" shall mean, collectively,  (i) that certain Indenture dated as
of April 26, 2002 (the "Series A Indenture")  between Borrower and Herring Bank,
a Texas banking corporation,  as trustee,  pursuant to which Borrower has issued
its Series A Secured  Investor  Certificates  outstanding as of the date of this
Agreement in the aggregate  principal amount of $5,286,000.00  (ii) that certain
Indenture  dated as of  September  28, 2004 (the "Series B  Indenture")  between
Borrower and Herring Bank, a Texas banking corporation,  as trustee, pursuant to
which Borrower has issued its Series B Secured Investor Certificates outstanding
as of  the  date  of  this  Agreement  in  the  aggregate  principal  amount  of
$16,914,000.00;  and (c) any other  Indenture  that may be entered  into between
Borrower and Herring Bank, a Texas banking corporation,  as trustee, pursuant to
which  Borrower  may  issue  additional  Secured  Investor  Certificates  in the
aggregate principal amount of $20,000,000.00 (the "Series C Indenture").

     "Interim  Loans" shall mean a loan having a maturity date of not later than
one year from the initial advance thereunder made by Borrower to

                                      -2-

<PAGE>

a Mortgage Loan Obligor to provide  interim  financing  pending the issuance and
sale of bonds by such Mortgage  Loan Obligor,  which loan is repaid from the net
proceeds from the sale of such bonds.

     "Liabilities"   shall  mean  any  and  all  obligations,   liabilities  and
indebtedness of Borrower to Lender or to any parent,  affiliate or subsidiary of
Lender of any and every kind and nature, howsoever created, arising or evidenced
and  howsoever  owned,  held or  acquired,  whether now or  hereafter  existing,
whether now due or to become due, whether primary, secondary,  direct, indirect,
absolute, contingent or otherwise (including, without limitation, obligations of
performance),  whether several,  joint or joint and several, and whether arising
or existing under written or oral agreement or by operation of law.

     "Loans" shall mean all loans and advances made by Lender to or on behalf of
Borrower hereunder.

     "Management  Agreement"  shall  mean  that  certain  Amended  and  Restated
Advisory Agreement dated as of January 22, 2004, between the Borrower and Church
Loan Advisors, Inc.

     "Material  Adverse  Effect"  shall  mean a material  adverse  effect on the
business,  property,  assets, prospects,  operations or condition,  financial or
otherwise, of a Person as the same is determined by the Lender in its reasonable
discretion.

     "Maximum Loan Limit" shall mean Eight Million Dollars ($8,000,000.00).

     "Mortgage"  shall mean with respect to each Mortgage  Loan,  each mortgage,
deed  of  trust  or  deed  to  secure  debt,  as  applicable  in the  particular
jurisdiction,  which  creates  the  first  priority  lien on the  Mortgage  Loan
Collateral  in favor of Borrower as security for the  repayment of such Mortgage
Loan.

     "Mortgage  Assignment"  shall mean with  respect to each  Mortgage  Loan, a
transfer and  assignment  of the Mortgage  with  respect  thereto from  Borrower
executed and recorded in the applicable jurisdiction.

     "Mortgage  Loans" shall mean loans made by the Borrower to a Mortgage  Loan
Obligor,  secured by a mortgage  lien or  security  interest  in and to the real
property  owned by such Mortgage Loan Obligor,  which  Mortgage  Loans have been
delivered  by  Borrower to Lender as security  for the  Liabilities  in order to
achieve the required collateral coverage covenant under Section 12(b) hereof and
which are otherwise in form and substance  acceptable to Lender.  Mortgage Loans
do not include Interim Loans.

     "Mortgage Loan  Collateral"  shall mean with respect to each Mortgage Loan,
the real  property,  improvements,  fixtures,  personalty,  insurance  policies,
accounts,  escrows and any other collateral pledged by the Mortgage Loan Obligor
(and, if  applicable,  by any  guarantor of such  Mortgage  Loan) to Borrower as
security  for  such  Mortgage  Loan (or  applicable  guaranty)  pursuant  to the
applicable Mortgage and other Mortgage Loan Collateral Documents.  Mortgage Loan
Collateral shall not include Excluded Collateral.

                                      -3-

<PAGE>

     "Mortgage  Loan  Collateral  Documents"  shall  mean with  respect  to each
Mortgage  Loan,  the original  Mortgage Loan Note,  an original  allonge to each
Mortgage Loan Note duly executed in blank by Borrower,  a fully executed copy of
the  recorded  Mortgage  and a  fully  executed  copy of the  recorded  Mortgage
Assignment;

     "Mortgage  Loan  Documents"  shall mean with respect to each Mortgage Loan,
collectively,  all  of  the  documents  evidencing,  guaranteeing,  securing  or
otherwise  relating  to  such  Mortgage  Loan,  as any of the  foregoing  may be
modified,  amended,  supplemented,  restated  or  renewed  from  time  to  time,
including, without limitation, the following documents:

     (a) Mortgage Loan Note.

     (b) Mortgage and related security  agreement,  fixture filing and financing
statement.

     (c) If applicable, an assignment of leases and rents.

     (d) If applicable, any guaranty.

     "Mortgage  Loan Note" shall mean with respect to each  Mortgage  Loan,  the
original  negotiable  promissory note, bond or other debt instrument made by the
Mortgage Loan Obligor in favor of Borrower.

     "Mortgage  Loan  Obligor"  shall mean a church,  school,  other  non-profit
organization or other Person obligated to make scheduled  payments of principal,
interest  and other  amounts  due in relation  to the loan  documentation  given
(including,  but not limited to, the mortgage granting a first mortgage lien) in
relation to a Bond, a Mortgage Loan or an Interim Loan.

     "Mortgage  Loan  Qualification  Documents"  shall mean with respect to each
Mortgage Loan, each of the following items:

     (a) The original  Mortgage Loan Note,  together with an original allonge to
such Mortgage Loan Note duly executed in blank by the Borrower.

     (b) A duly executed, recorded and delivered Mortgage Assignment.

     (c) The original counterparts of the other Mortgage Loan Documents,  or the
original recorded counterpart upon return from recording or filing.

     (d) With  respect to each  Mortgage  Loan,  a  favorable  legal  opinion of
counsel to the Mortgage Loan Obligor qualified to practice in the state in which
the Mortgage Loan  Collateral is located,  addressed to the Borrower,  as to the
enforceability  of the  Mortgage  Loan  Documents;  provided,  however  that for
Mortgage Loans  outstanding on the date of this Agreement,  no legal opinions of
counsel  shall be required if they were not  obtained by Borrower in  connection
with closing such Mortgage Loans.

                                      -4-

<PAGE>

     (e) The  title  policy  (ALTA  standard  form)  issued  by a title  company
reasonably  acceptable  to Lender  demonstrating  that the  Mortgage in favor of
Borrower is a first lien on the real property described therein.

     (f) An  appraisal or estimate of value,  survey and surveyor  certification
for the Mortgage Loan Collateral,  as required by Borrower's  internal policies;
provided,  however,  that for  Mortgage  Loans  outstanding  on the date of this
Agreement,  no survey or surveyor  certification  shall be required if they were
not obtained by Borrower in connection with closing such Mortgage Loans.

     (g) The  credit  display,  underwriting  analysis  or  other  documentation
prepared by Borrower or Church Loan  Advisors,  Inc., or any other  affiliate of
Borrower  upon which the  decision  of Borrower  to make the  Mortgage  Loan was
based.

     (h) An  assignment  in form and content  acceptable  to Lender by which the
Mortgage Loan  Qualification  Documents and Mortgage Loan Documents are assigned
to Lender.

     "Note"  means that  certain  Revolving  Note of even date  herewith  in the
original principal amount of $8,000,000.00  executed by the Borrower and payable
to the order of the Lender.

     "Obligor"  shall mean Borrower and each other Person who is or shall become
primarily or secondarily liable for any of the Liabilities.

     "OREO" shall mean property acquired by the Borrower pursuant to foreclosure
proceedings,  deed in lieu of conveyance or foreclosure or a similar  conveyance
transaction as a result of a defaulted Mortgage Loan or Bond.

     "Original Term" shall have the meaning specified in Section 8 hereof.

     "Other  Agreements"  shall mean all agreements,  instruments and documents,
other than this Agreement, including, without limitation, guaranties, mortgages,
trust deeds,  pledges,  powers of attorney,  consents,  assignments,  contracts,
notices,  security  agreements,  leases,  financing  statements  and  all  other
writings heretofore, now or from time to time hereafter executed by or on behalf
of  Borrower  or any other  Person  and  delivered  to Lender or to any  parent,
affiliate or  subsidiary  of Lender in connection  with the  Liabilities  or the
transactions  contemplated hereby, as each of the same may be amended,  modified
or supplemented from time to time.

     "Parent" shall mean any Person now or at any time or times hereafter owning
or  controlling  (alone or with any other  Person)  at least a  majority  of the
issued and outstanding equity of Borrower and, if Borrower is a partnership, the
general partner of Borrower.

     "Performing Bond" shall mean a Bond with respect to which the Mortgage Loan
Obligor has met all of the material  terms and  conditions set forth in the Bond
and in any security  documents  related  thereto and no default or event,  which
with the  passage  of time or giving of  notice,  or both,  might  constitute  a
default, exists and has continued for more than ninety (90) days under such Bond
and related security documents.

                                      -5-

<PAGE>

     "Performing Mortgage Loan" shall mean a Mortgage Loan with respect to which
the Mortgage Loan Obligor has met all of the material  terms and  conditions set
forth in the Mortgage  Loan  Documents  and no default or event,  which with the
passage of time or giving of notice, or both, might constitute a default, exists
and has  continued  for more than  ninety  (90) days  under such  Mortgage  Loan
Documents.

     "Permitted  Indebtedness"  shall mean all  indebtedness  of the Borrower in
connection with the Indentures and the Secured Investor Certificates.

     "Person" shall mean any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization,  association,  corporation, limited
liability  company,  institution,  entity,  party or  foreign  or United  States
government  (whether  federal,  state,  county,  city,  municipal or otherwise),
including,  without limitation,  any instrumentality,  division, agency, body or
department thereof.

     "Plan" shall have the meaning specified in subsection 10(b)(v) hereof.

     "Prime Rate" shall mean the Wall Street Journal's  publicly announced prime
rate  (which is not  intended to be Lender's  lowest or most  favorable  rate in
effect at any time) in effect from time to time.

     "Qualifying  Bond" shall mean a Bond,  which meets the  criteria of Section
4(a) hereof,  approved by Lender for inclusion in the Borrowing Base and is held
in the ICA Account or otherwise delivered to the Lender.

     "Qualifying  Mortgage  Loan"  shall mean a Mortgage  Loan,  which meets the
criteria of Section  4(a)  hereof,  is approved by Lender for  inclusion  in the
Borrowing  Base  and  with  respect  to  which  each  and  all of the  following
conditions and requirements have been met as evidenced by written  certification
delivered by Borrower to Lender:

     (a) Lender shall have received the Mortgage Loan Qualification Documents.

     (b) Lender shall have received the Mortgage Loan Collateral Documents,  all
of which remain in full force and effect.

     (c) Each of the Mortgage Loan Documents  evidencing,  securing or otherwise
relating to the  Mortgage  Loan shall have been  executed by the  Mortgage  Loan
Obligor and shall be legal,  valid,  and binding on and enforceable  against the
Mortgage Loan Obligor.

     (d) The  making  of such  Mortgage  Loan by  Borrower  was in all  material
respects in  compliance  with and was not in  violation of  Borrower's  standard
underwriting  guidelines and criteria, as approved by Lender, and any applicable
law.

     (e) Based on the Appraised  Value of the Mortgage Loan  Collateral for such
Mortgage  Loan,  the loan to value  ratio of such  Mortgage  Loan  shall  not be
greater than  seventy-five  percent (75%) and the Mortgage Loan Collateral shall
not have any material title, survey, environmental, entitlement/zoning issues or
other defects.

                                      -6-

<PAGE>

     (f) The Mortgage Loan is a Performing Mortgage Loan.

     (g) The  representations  and  warranties in Section 6.24 shall be true and
correct with respect to such Mortgage Loan.

     (h) The Mortgage Loan Documents shall be free and clear of all liens.

     "Secured   Investor   Certificates"   shall  mean  the   secured   investor
certificates issued from time to time in connection with the Indentures,  as the
same may be renewed from time to time in accordance with the Indentures.

     "Securities  Account Control  Agreement" shall mean the securities  account
control agreement between Borrower, Lender and Herring Bank.

     "Subsidiary"  shall mean any  corporation  of which more than fifty percent
(50%) of the  outstanding  capital stock having ordinary voting power to elect a
majority of the board of directors of such corporation  (irrespective of whether
at the time  stock of any other  class of such  corporation  shall have or might
have voting power by reason of the happening of any contingency) is at the time,
directly or indirectly, owned by Borrower, or any partnership,  joint venture or
limited  liability  company  of  which  more  than  fifty  percent  (50%) of the
outstanding equity interests are at the time,  directly or indirectly,  owned by
Borrower or any partnership of which Borrower is a general partner.

     "Tangible  Net Worth"  shall have the meaning  specified in  subsection  12
hereof.

     2.   LOANS.

     (a)  Loans.

     Subject  to the  terms  and  conditions  of this  Agreement  and the  Other
Agreements,  during the Original Term, Lender shall make Loans and advances (the
"Loans") in an amount up to Eight Million  Dollars  ($8,000,000.00),  subject to
the collateral  coverage  covenant under Section 12(b) hereof.  Unless and until
Lender  obtains one or more  participants  who agree to participate in the Loans
and enter into participation agreements with Lender, the maximum amount of Loans
and advances by Lender is limited to $4,500,000.00.

     Borrower hereby authorizes Lender, in its sole discretion, to charge any of
Borrower's  accounts  or  advance  Loans  to make  any  payments  of  principal,
interest,  fees,  costs or expenses  required to be made under this Agreement or
the Other Agreements.

     A request  for a Loan shall be made or shall be deemed to be made,  each in
the following manner:  Borrower shall give Lender same day notice, no later than
1:00 P.M. (determined based on the local time of Borrower at its principal place
of business) for such day, of its request for a Loan. In the event that Borrower
maintains a controlled  disbursement account at Lender, each check presented for
payment  against such  controlled  disbursement  account and any other charge or
request  for  payment  against  such  controlled   disbursement   account  shall
constitute a request for a Loan.  As an  accommodation  to Borrower,  Lender may
permit telephone requests for Loans and electronic  transmittal of instructions,
authorizations,

                                      -7-

<PAGE>

agreements  or  reports  to Lender by  Borrower.  Unless  Borrower  specifically
directs  Lender in writing not to accept or act upon  telephonic  or  electronic
communications from Borrower, Lender shall have no liability to Borrower for any
loss or damage  suffered by  Borrower  as a result of  Lender's  honoring of any
requests,  execution  of  any  instructions,  authorizations  or  agreements  or
reliance on any reports  communicated to it telephonically or electronically and
purporting to have been sent to Lender by Borrower and Lender shall have no duty
to verify the origin of any such  communication  or the  authority of the Person
sending it.

     Borrower hereby  irrevocably  authorizes Lender to disburse the proceeds of
each Loan  requested  by Borrower,  or deemed to be  requested  by Borrower,  as
follows:  the  proceeds  of each Loan  requested  under  Section  2(a)  shall be
disbursed  by  Lender  in  lawful  money of the  United  States  of  America  in
immediately available funds, in the case of the initial borrowing, in accordance
with the terms of the written disbursement letter from Borrower, and in the case
of each subsequent borrowing, by wire transfer or Automated Clearing House (ACH)
transfer to such bank  account as may be agreed upon by Borrower and Lender from
time to time, or elsewhere if pursuant to a written direction from Borrower.

     (b) Repayments.

     The Loans shall be repaid on the last day of the  Original  Term.  Prior to
maturity,  amounts of principal  repaid may be readvanced  to Borrower.  Accrued
interest is payable monthly.

     (c) Note.

     The Loans shall be evidenced by the Note and constitute a revolving loan.

     3. INTEREST, FEES AND CHARGES.

     (a) Interest Rate.

     The Loans shall bear  interest at the rate set forth in the Note.  Upon the
occurrence of an Event of Default and during the continuance  thereof, the Loans
shall bear  interest at the rate of four percent (4%) per annum in excess of the
interest rate  otherwise  payable  thereon,  which  interest shall be payable on
demand.  All interest shall be calculated on the basis of actual days elapsed in
a 360-day year.

     (b) Fees And Charges.

     (i)  Origination  Fee.  Borrower shall pay to Lender an origination  fee of
          $15,750.00,  which  fee  shall  be fully  earned  and  payable  on the
          disbursement of the initial Loan hereunder.  On the first  anniversary
          date of this Agreement, the Borrower shall pay to Lender an additional
          fee equal to 0.25% of the previous year's average Loan balance.

     (ii) Mortgage  Loan.  For any Mortgage Loan which  Borrower  proposes to be
          included in the Borrowing  Base,  Borrower  shall pay to Lender a file
          review fee of $250.00.

                                      -8-

<PAGE>

     (iii) Costs and Expenses. Borrower shall reimburse Lender for all costs and
          expenses, including, without limitation, legal expenses and reasonable
          attorneys' fees (whether for internal or outside counsel), incurred by
          Lender in connection with the (i)  documentation  and  consummation of
          this  transaction  and any other  transactions  between  Borrower  and
          Lender,  including,  without  limitation,  Uniform Commercial Code and
          other public record searches and filings,  overnight  courier or other
          express  or  messenger  delivery,   appraisal  costs,  surveys,  title
          insurance and  environmental  audit or review costs;  (ii) collection,
          protection or enforcement of any rights in or to the Collateral; (iii)
          collection of any Liabilities; and (iv) administration and enforcement
          of any of Lender's rights under this Agreement or any Other Agreement.
          Borrower shall also pay all normal service charges with respect to all
          accounts  maintained  by  Borrower  with  Lender  and  any  additional
          services requested by Borrower from Lender.  All such costs,  expenses
          and charges shall constitute Liabilities  hereunder,  shall be payable
          by Borrower to Lender on demand,  and until paid,  shall bear interest
          at the highest rate then applicable to Loans hereunder.

     (c)  Maximum Interest.

     It is the intent of the parties that the rate of interest and other charges
to  Borrower  under this  Agreement  and the Other  Agreements  shall be lawful;
therefore,  if for any reason the interest or other  charges  payable under this
Agreement  are  found  by  a  court  of  competent  jurisdiction,   in  a  final
determination,  to exceed the limit which Lender may lawfully  charge  Borrower,
then the  obligation to pay interest and other charges  shall  automatically  be
reduced to such limit and, if any amount in excess of such limit shall have been
paid, then such amount shall be refunded to Borrower.

4.       COLLATERAL.

(a)      Borrowing Base.

     The Borrowing  Base shall at all times conform to the  collateral  coverage
covenant under Section 12(b) hereof, subject to these additional restrictions:

     (i)  At no time shall Mortgage Loans make up more than thirty percent (30%)
          of the Borrowing Base, and

     (ii) No single Mortgage Loan may make up more than fifteen percent (15%) of
          the Borrowing Base for more than one successive calendar quarter, and

     (iii) No Bond  issued  by any one  issuer  may  make up more  than  fifteen
          percent  (15%) of the  Borrowing  Base for  more  than one  successive
          calendar quarter except that the Borrowing Base may include Performing
          Bonds of up to  $1,100,000.00  issued by Agape Assembly Baptist Church
          which are subject to the Securities  Account  Control  Agreement as of
          the date of this Agreement, and

     (iv) All Mortgage Loans must be Performing Mortgage Loans, and

                                      -9-

<PAGE>

     (v)  All Bonds must be Performing Bonds, and

     (vi) All Mortgage Loans must be Qualifying Mortgage Loans, and

     (vii) All Bonds must be Qualifying Bonds.

     (b)  Grant of Security Interest to Lender.

     As  security  for the  payment  of all Loans now or in the  future  made by
Lender to Borrower  hereunder and for the payment or other  satisfaction  of all
other  Liabilities,  Borrower  hereby  assigns  to Lender and grants to Lender a
continuing  security  interest  in all of  Borrower's  property  and  assets  of
whatever type or description and all additions thereto and replacements thereof,
and all other  property  whether  now owned or  hereafter  created,  acquired or
reacquired by Borrower, wherever located (collectively,  the "Collateral," which
Collateral shall in no event include  Excluded  Collateral)  including,  without
limitation, the following:

Investment Property/Bonds/Mortgage Loans

     i.   All Bonds now existing or hereafter made; and

     ii.  All Mortgage Loans; and

     iii. All Mortgage Loan Qualification Documents; and

     iv.  All  security  for the  indebtedness  evidenced  by the  Bonds and the
          Mortgage Loans including,  without  limitation,  the real and personal
          property  securing  the  Bonds  and  Mortgage  Loans,  and all  liens,
          security interests and title of Borrower with respect thereto; and

     v.   All other  documents  evidencing  or securing  the Bonds and  Mortgage
          Loans or any  security  therefor  or  guaranties  thereof,  all  title
          insurance  (whether  evidenced by policies,  commitments or otherwise)
          issued with respect to the real and personal property and to any other
          security  for the Bonds  and  Mortgage  Loans,  all  accounts,  funds,
          lockboxes,  and  all  other  instruments,   documents  and  agreements
          executed  by or in favor  of  Borrower  or any  prior  holder  of such
          documents and instruments in connection with any of the foregoing, and
          all other  documents  delivered  or to be delivered to Borrower or any
          prior holder of such  documents  and  instruments  under the Bonds and
          Mortgage Loans, and all books and records  documenting,  evidencing or
          relating to the Bonds and Mortgage  Loans (the Bonds,  Mortgage  Loans
          and all of said documents,  policies,  instruments and agreements, and
          any   and   all   additions,   renewals,    extensions,    amendments,
          modifications,  consolidations, restatements or supplements thereto of
          any of the foregoing,  being  hereinafter  referred to collectively as
          the "Collateral Documents"); and

     vi.  All payments due and to become due under the Collateral Documents, all
          collections thereon and all other amounts paid thereunder,  including,
          without

                                      -10-

<PAGE>

          limitation,  all prepayments under the Collateral  Documents,  and all
          other cash and non-cash proceeds of the Collateral Documents or of any
          other  collateral for the  obligations of Mortgage Loan Obligors under
          the Collateral Documents; and

     vii. All rights and privileges  obtained by Borrower in connection with the
          Bonds and Mortgage Loans issued by Mortgage Loan Obligors evidenced by
          the Collateral Documents, together with the real and personal property
          described in the Collateral  Documents,  and all the powers,  options,
          privileges and immunities contained in any of the foregoing; and

     viii. Any and all renewals and  extensions  of any of the foregoing and any
          and all replacements or substitutions for any of the foregoing.

Accounts

     All accounts, deposit accounts, letter of credit rights (whether or not the
     letter of credit is  evidenced by a writing) and other rights to payment of
     money for  property  sold or leased or for  services  rendered,  related or
     arising from the Bonds and Mortgage  Loans,  expressly  including,  without
     limitation,  all agreements  with and sums due from Mortgage Loan Obligors,
     and all books and records recording,  evidencing or relating to such rights
     or any part thereof (collectively, the "Accounts").

Contracts

     All (i) contracts and  agreements for the purchase of interests in real and
     personal  property,  (ii)  management  contracts and agreements  including,
     without limitation,  the Management  Agreement,  (iii) security agreements,
     guarantees and other agreements evidencing,  securing or otherwise relating
     to the  Accounts  or other  rights  to  receive  payment,  and  (iv)  other
     agreements to which Borrower is a party,  whether now existing or hereafter
     arising (collectively, the "Contracts").

General Intangibles

     All other  general  intangibles  (as such term is  defined  in the  Uniform
     Commercial  Code) and  contract  rights  including  personal  property  not
     included above,  related to or arising from or related to the Bonds and the
     Mortgage Loans,  including,  without limitation,  (i) customer and supplier
     lists, books and records, computer programs and other intellectual property
     rights,  insurance policies,  tax refunds,  (ii) all goodwill,  trademarks,
     trademark applications,  trade names, trade secrets,  patents,  copyrights,
     service  marks,  formulas,  industrial  designs,  information  contained on
     computer disks or tapes,  software,  other intellectual  property or rights
     therein,  whether under license or otherwise, all rights to receive payment
     on property  upon or in  connection  with any transfer of any license,  and
     (iii) all payment intangibles (collectively, the "Intangibles").

                                      -11-

<PAGE>

Miscellaneous Items

     All inventory,  equipment fixtures and other goods,  chattel paper (whether
     tangible  or  electronic),  documents,  instruments  (including  promissory
     notes),  supplies,  choses in action,  commercial tort claims,  (including,
     without   limitation,   payments  received  with  respect  to  termination,
     arbitration  or  litigation   under  any  Contract),   money,   cash,  cash
     equivalents,  or other assets of Borrower  (that come into the  possession,
     custody,  or control of the agent or any bank),  deposits,  certificates of
     deposit,  stock  or share  certificates,  certificated  and  uncertificated
     securities and all other investment  property,  supporting  obligations (as
     such term is defined in the Uniform Commercial Code),  URL's,  domain names
     and  licenses,  and all  other  property  and  assets of  whatever  type or
     description  not  included  above  related  to  the  acquisition,  sale  or
     maintenance  of  the  Bonds  and  the  Mortgage  Loans  (collectively,  the
     "Miscellaneous Items"); and

Proceeds

     All proceeds,  whether tangible or intangible, of any of the above, and all
     proceeds of any loss of,  damage to or  destruction  of the above,  whether
     insured or not insured,  and all other proceeds of any sale, lease or other
     disposition of any property or interest therein referred to above, together
     with all proceeds of any  policies of insurance  covering any or all of the
     above, the proceeds of any award in condemnation with respect to any of the
     property,  any rebates or  refunds,  whether  for taxes or  otherwise,  and
     together  with  all  proceeds  of  any  such  proceeds  (collectively,  the
     "Proceeds").

(c)      Collateral for Indentures.

     Provided  Borrower  is in  compliance  with  the  Borrowing  Base  and  the
collateral  coverage  covenant  of Section  12(b)  hereof and not  otherwise  in
default  under  the  terms of this  Agreement,  Borrower  may  pledge  Bonds and
Mortgage  Loans not  included in the  Borrowing  Base to secure the  Indentures.
Borrower may not pledge Bonds and Mortgage  Loans to secure such  Indentures  to
the  extent  that the  aggregate  principal  balance  of the  pledged  Bonds and
Mortgage  Loans  exceed in excess of 120% of the amount of the  funded  investor
certificates  issued.  If Borrower has Qualifying Bonds and Qualifying  Mortgage
Loans  in the  Borrowing  Base in  excess  of what is  needed  to  maintain  the
collateral coverage covenant of Section 12(b) of this Agreement, and Borrower is
not otherwise in default under the terms of this Agreement,  Lender shall,  upon
five (5) days' written notice by Borrower,  which request shall include the most
recent  month end  reports set forth in Section  7(b)  hereof,  release  certain
Qualifying  Bonds and/or  Qualifying  Mortgage Loans provided that the requested
release  does not cause a  violation  of the  Borrowing  Base or the  collateral
coverage covenant.

(d)      Other Security.

     Lender,   in  its  sole  discretion,   without  waiving  or  releasing  any
obligation,  liability  or duty of Borrower  under this  Agreement  or the Other
Agreements  or any Event of  Default,  may at any time or times  hereafter,  but
shall not be obligated to, pay,  acquire or accept an assignment of any security
interest, lien or encumbrance of any Person in, upon or against

                                      -12-

<PAGE>

the  Collateral  which is not consented to or otherwise  approved by the Lender.
All sums paid by Lender in  respect  thereof  and all costs,  fees and  expenses
including, without limitation, reasonable attorney fees, all court costs and all
other charges relating thereto incurred by Lender shall constitute  Liabilities,
payable by Borrower to Lender on demand and, until paid,  shall bear interest at
the highest rate then applicable to Loans hereunder.

(e)      Possessory Collateral.

     Immediately  upon  Borrower's  receipt  of any  portion  of the  Collateral
evidenced  by  an  agreement,   Instrument  or  Document,   including,   without
limitation, any Tangible Chattel Paper and any Investment Property consisting of
certificated  securities (including,  but not limited to, Bonds), Borrower shall
deliver the original thereof to Lender together with an appropriate  endorsement
or  other  specific  evidence  of  assignment  thereof  to  Lender  (in form and
substance  acceptable to Lender).  If an  endorsement  or assignment of any such
items shall not be made for any reason, Lender is hereby irrevocably authorized,
as  Borrower's  attorney  and  agent-in-fact,  to  endorse or assign the same on
Borrower's behalf.

(f)      Electronic Chattel Paper.

     To the extent that  Borrower  obtains or maintains any  Electronic  Chattel
Paper,  Borrower shall create, store and assign the record or records comprising
the  Electronic  Chattel Paper in such a manner that (i) a single  authoritative
copy of the record or records exists which is unique, identifiable and except as
otherwise  provided in clauses (iv), (v) and (vi) below,  unalterable,  (ii) the
authoritative  copy identifies  Lender as the assignee of the record or records,
(iii) the authoritative  copy is communicated to and maintained by the Lender or
its  designated  custodian,  (iv)  copies  or  revisions  that add or  change an
identified  assignee  of the  authoritative  copy  can  only  be made  with  the
participation of Lender, (v) each copy of the authoritative copy and any copy of
a copy is readily  identifiable as a copy that is not the authoritative copy and
(vi) any  revision  of the  authoritative  copy is  readily  identifiable  as an
authorized or unauthorized revision.

5. PRESERVATION OF COLLATERAL AND PERFECTION OF SECURITY INTERESTS THEREIN.

     Borrower  shall,  at Lender's  request,  at any time and from time to time,
authenticate,  execute  and  deliver to Lender the  Securities  Account  Control
Agreement and such  financing  statements,  documents and other  agreements  and
instruments  (and pay the cost of filing  or  recording  the same in all  public
offices  deemed  necessary  or  desirable  by Lender) and do such other acts and
things or cause  third  parties  to do such  other acts and things as Lender may
deem  necessary or desirable in its sole  discretion  in order to establish  and
maintain a valid,  attached and perfected security interest in the Collateral in
favor of Lender (free and clear of all other  liens,  claims,  encumbrances  and
rights  of  third  parties  whatsoever,  whether  voluntarily  or  involuntarily
created) to secure  payment of the  Liabilities,  and in order to facilitate the
collection of the Collateral. Borrower irrevocably hereby makes, constitutes and
appoints  Lender  (and all  Persons  designated  by Lender for that  purpose) as
Borrower's true and lawful attorney and  agent-in-fact  to execute and file such
financing statements, documents and other agreements and instruments and do such
other acts and things as may be  necessary  to  preserve  and  perfect

                                      -13-

<PAGE>

Lender's  security  interest in the Collateral.  Borrower  further agrees that a
carbon, photographic,  photostatic or other reproduction of this Agreement or of
a financing  statement  shall be sufficient as a financing  statement.  Borrower
further  ratifies  and  confirms  the  prior  filing  by  Lender  of any and all
financing  statements  which identify the Borrower as debtor,  Lender as secured
party and any or all Collateral as collateral.

6. POSSESSION OF COLLATERAL AND RELATED MATTERS.

     Until otherwise  notified by Lender following the occurrence of an Event of
Default,  Borrower  shall have the right,  except as otherwise  provided in this
Agreement,  in the ordinary course of Borrower's  business,  to collect Accounts
and deposit Account proceeds into any bank account of Borrower.

7. COLLATERAL, AVAILABILITY AND FINANCIAL REPORTS AND SCHEDULES.

     (a)  Borrowing Base Certificate.

     Borrower shall deliver to Lender an executed  Borrowing Base Certificate in
Lender's  then  current  form on the 10th  day  after  the end of each  calendar
quarter,  which shall be accompanied by copies of Borrower's sales journal, cash
receipts  journal and credit memo journal for the relevant  period.  Such report
shall  reflect  the  activity  of  Borrower  with  respect to  Accounts  for the
immediately  preceding  calendar  quarter,  and shall be in a form and with such
specificity  as is  satisfactory  to Lender and shall  contain  such  additional
information  concerning  Accounts  and  Inventory  as may be requested by Lender
including,  without  limitation,  but only if specifically  requested by Lender,
copies of all invoices prepared in connection with such Accounts.

     (b)  Quarterly Reports.

     Borrower shall deliver to Lender, in form and content reasonably acceptable
to Lender,  in addition to any other reports,  as soon as practicable and in any
event:  (i) within ten (10) days after the end of each calendar  quarter,  (A) a
detailed trial balance of Borrower's  current  Mortgage Loan and Bond portfolio,
in form and substance  reasonably  satisfactory  to Lender,  including,  without
limitation,  the names and  addresses  of all account  debtors  and  obligors of
Borrower, (B) a report issued by Herring Bank or any successor indenture trustee
listing the collateral  held by such  indenture  trustee under the Indentures or
comparable  securities  issued  by or  on  behalf  of  Borrower,  (C)  a  report
(statement)  issued by Herring  Bank (or its  successor)  for the ICA Account in
which Bonds are held,  and (D) a report  (statement)  issued by Herring Bank (or
its successor) for all book entry Bonds for which it is the trustee.

     (c) Financial Statements.

     Borrower shall deliver to Lender the following financial  information,  all
of which shall be prepared in  accordance  with  generally  accepted  accounting
principles  consistently  applied,  and  shall be  accompanied  by a  compliance
certificate in the form of Exhibit C hereto, which compliance  certificate shall
include a calculation of all financial  covenants  contained in this  Agreement:
(i) no later  than  thirty  (30) days  after each  calendar  quarter,  copies of
internally

                                      -14-
<PAGE>

prepared financial statements, including, without limitation, balance sheets and
statements of income, retained earnings and cash flow of Borrower,  certified by
the Chief Financial Officer of Borrower; and (ii) no later than ninety (90) days
after the end of each of  Borrower's  Fiscal  Years,  audited  annual  financial
statements  with  an  unqualified   opinion  by  independent   certified  public
accountants  selected by Borrower and reasonably  satisfactory to Lender,  which
financial statements shall be accompanied by: (A) a letter from such accountants
acknowledging that they are aware that a primary intent of Borrower in obtaining
such financial statements is to influence Lender and that Lender is relying upon
such  financial  statements  in  connection  with  the  exercise  of its  rights
hereunder,  provided, that Borrower shall only be required to use its reasonable
efforts  exercised  in good  faith to  obtain  such  letter;  (B)  copies of any
management  letters sent to the Borrower by such accountants;  and (C) copies of
Borrower's federal and state tax returns,  prepared by an independent  certified
public accountant selected by Borrower and reasonably satisfactory to Lender.

     (d)  Bond/Mortgage Loan Certificate.

     Borrower  shall  deliver  to Lender  for any Bond or  Mortgage  Loan  which
Borrower  proposes to pledge or otherwise grant a security  interest in favor of
Lender, a Bond/Mortgage  Loan Certificate in the form attached hereto as Exhibit
B.

     (e)  Other Information.

     Promptly  following  request  therefor  by Lender,  such other  business or
financial  data,  reports,  appraisals and  projections as Lender may reasonably
request.

     8.   TERM.

     THE LOANS SHALL BE IN EFFECT FROM THE DATE HEREOF UNTIL  SEPTEMBER 12, 2010
(the  "Maturity  Date") and shall remain in effect post  Maturity Date until the
Loans are paid in full.

     9.   REPRESENTATIONS AND WARRANTIES.

     Borrower hereby  represents and warrants to Lender,  which  representations
and warranties  (whether appearing in this Section 9 or elsewhere) shall be true
at the time of Borrower's  execution  hereof and the closing of the transactions
described  herein or related  hereto,  shall remain true until the  repayment in
full and  satisfaction of all the Liabilities and termination of this Agreement,
and shall be remade by Borrower  at the time each Loan is made  pursuant to this
Agreement, provided, that representations and warranties made as of a particular
date shall be true and correct as of such date.

     (a)  Financial Statements and Other Information.

     The financial statements and other information delivered or to be delivered
by Borrower to Lender at or prior to the date of this  Agreement  fairly present
in all material respects the financial condition of Borrower, and there has been
no material  adverse  change in the financial  condition,  the operations or any
other status of Borrower since the date of the financial statements delivered to
Lender  most  recently  prior  to  the  date  of  this  Agreement.  All  written

                                      -15-

<PAGE>

information  now or  heretofore  furnished  by  Borrower  to  Lender is true and
correct as of the date with respect to which such information was furnished.

     (b) Locations.

     The office where Borrower keeps its books,  records and accounts (or copies
thereof) concerning the Collateral,  Borrower's  principal place of business and
all of Borrower's  other places of business,  locations of  Collateral  and post
office boxes and locations of bank accounts are as set forth in Exhibit D and at
other locations  within the  continental  United States of which Lender has been
advised by Borrower in accordance  with  subsection  10(b)(i).  The  Collateral,
including,  without  limitation,  the  equipment  (except any part thereof which
Borrower  shall have advised Lender in writing  consists of Collateral  normally
used in more than one state) is kept, or, in the case of vehicles,  based,  only
at the  addresses  set forth on  Exhibit  D, and at other  locations  within the
continental  United  States of which  Lender  has been  advised by  Borrower  in
writing in accordance with subsection 10(b)(i) hereof.

     (c) Loans by Borrower.

     Borrower  has not made any  loans or  advances  to any  Affiliate  or other
Person  except for  advances  authorized  hereunder to  employees,  officers and
directors  of Borrower  for travel and other  expenses  arising in the  ordinary
course of Borrower's business.

     (d)  Bond and Mortgage Loans.

     Each Bond and Mortgage Loan which Borrower shall request Lender to classify
as eligible for purposes of serving as Collateral  and to be used by Borrower to
comply with the collateral  coverage  covenant under Section 12(b) hereof shall,
as of the time when such request is made and at all times thereafter, conform in
all respects to the requirements of such classification established and approved
by Lender  from time to time.  Borrower  hereby  acknowledges  and agrees to use
Bonds to  achieve  the  collateral  coverage  covenant  and shall  only  deliver
Mortgage Loans to Lender if Bonds are insufficient to meet such covenant.

     (e)  Liens.

     Borrower  is the  lawful  owner of the  Collateral,  free  from all  liens,
claims, security interests and encumbrances  whatsoever,  whether voluntarily or
involuntarily created and whether or not perfected.

     (f) Organization, Authority and No Conflict.

     Borrower is a  corporation  duly  organized,  validly  existing and in good
standing  in the State of  Minnesota,  its state  organizational  identification
number is MN 8G-616 and Borrower is duly  qualified  and in good standing in all
states  where the  nature  and extent of the  business  transacted  by it or the
ownership of its assets makes such  qualification  necessary  or, if Borrower is
not so qualified,  Borrower may cure any such failure  without losing any of its
rights,  incurring  any liens or  material  penalties,  or  otherwise  affecting
Lender's  rights.  Borrower has the right and power and is duly  authorized  and
empowered  to enter  into,  execute  and deliver  this  Agreement  and the Other
Agreements  and perform its  obligations  hereunder and  thereunder.

                                      -16-

<PAGE>

Borrower's  execution,  delivery and performance of this Agreement and the Other
Agreements does not conflict with the provisions of the organizational documents
of  Borrower,  any  statute,  regulation,  ordinance  or  rule  of  law,  or any
agreement,  contract or other  document which may now or hereafter be binding on
Borrower,  except for conflicts with  agreements,  contracts or other  documents
which  would not have a Material  Adverse  Effect on  Borrower,  and  Borrower's
execution,  delivery and performance of this Agreement and the Other  Agreements
shall not result in the imposition of any lien or other  encumbrance upon any of
Borrower's property under any existing indenture,  mortgage, deed of trust, loan
or credit agreement or other agreement or instrument by which Borrower or any of
its property may be bound or affected.

     (g) Litigation.

     Except as disclosed to Lender on Schedule 9(g) hereto, there are no actions
or  proceedings  which  are  pending  or, to the best of  Borrower's  knowledge,
threatened against Borrower which is, in the determination of Lender, reasonably
likely to have a  Material  Adverse  Effect on  Borrower,  and  Borrower  shall,
promptly  upon  becoming  aware of any such  pending  or  threatened  action  or
proceeding, give written notice thereof to Lender.

     (h) Compliance with Laws and Maintenance of Permits.

     Borrower has obtained all governmental consents, franchises,  certificates,
licenses, authorizations,  approvals and permits, the lack of which would have a
Material  Adverse Effect on Borrower.  Borrower is in compliance in all material
respects with all applicable federal, state, local and foreign statutes, orders,
regulations, rules and ordinances, the failure with which to comply would have a
Material Adverse Effect on Borrower.

     (i) Affiliate Transactions.

     Except as set forth on  Schedule  9(i) hereto or as  permitted  pursuant to
subsection 9(c) hereof,  Borrower is not conducting,  permitting or suffering to
be conducted,  transactions  with any  Affiliate  other than  transactions  with
Affiliates  for the  purchase or sale of  Inventory  or services in the ordinary
course of business pursuant to terms that are no less favorable to Borrower than
the terms upon which such  transactions  would have been made had they been made
to or with a Person that is not an Affiliate.

     (j) Names and Trade Names.

     Borrower's  name has  always  been as set forth on the  first  page of this
Agreement and Borrower uses no trade names,  assumed names,  fictitious names or
division names in the operation of its business, except as set forth on Schedule
9(j) hereto.

     (k) Enforceability.

     This  Agreement and the Other  Agreements to which  Borrower is a party are
the legal, valid and binding obligations of Borrower and are enforceable against
Borrower in accordance with their respective terms.

                                      -17-

<PAGE>

     (l) Solvency.

     Borrower is, after giving effect to the transactions  contemplated  hereby,
solvent,  able to pay its debts as they become due,  has capital  sufficient  to
carry on its business,  now owns property  having a value both at fair valuation
and at present fair saleable  value greater than the amount  required to pay its
debts, and will not be rendered  insolvent by the execution and delivery of this
Agreement or any of the Other  Agreements or by  completion of the  transactions
contemplated hereunder or thereunder.

     (m) Indebtedness.

     Except as set forth on Schedule  9(m)  hereto,  Borrower  is not  obligated
(directly or indirectly) for any loans or other  indebtedness for borrowed money
other than the Loans and the Permitted Indebtedness.

     (n) Margin Security and Use of Proceeds.

     Borrower  does not own any margin  securities,  and none of the proceeds of
the Loans  hereunder shall be used for the purpose of purchasing or carrying any
margin  securities  or for the purpose of reducing or retiring any  indebtedness
which was originally incurred to purchase any margin securities or for any other
purpose not  permitted by  Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.

     (o) Parent, Subsidiaries and Affiliates.

     Except as set forth on  Schedule  9(o)  hereto,  Borrower  has no  Parents,
Subsidiaries or other  Affiliates or divisions,  nor is Borrower  engaged in any
joint venture or partnership with any other Person.

     (p) No Defaults.

     To  Borrower's  knowledge,  Borrower is not in default  under any  material
contract,  lease or  commitment  to which it is a party or by which it is bound,
nor  does  Borrower  know  of any  dispute  regarding  any  contract,  lease  or
commitment which would have a Material Adverse Effect on Borrower.

     (q) Employee Matters.

     There are no controversies pending or, to Borrower's knowledge,  threatened
between  Borrower and any of its employees,  agents or  independent  contractors
other than employee  grievances arising in the ordinary course of business which
would not, in the aggregate,  have a Material Adverse Effect on Borrower, and to
Borrower's  knowledge  Borrower is in compliance with all federal and state laws
respecting employment and employment terms,

                                      -18-

<PAGE>

conditions and practices except for such non-compliance which would not have a
Material Adverse Effect on Borrower.

     (r) Intellectual Property.

     Borrower  possesses  adequate  licenses,   patents,   patent  applications,
copyrights, service marks, trademarks,  trademark applications,  tradestyles and
trade names to continue to conduct its business as  heretofore  conducted by it,
except to the extent  that the  failure to possess  such items  would not have a
Material Adverse Effect on Borrower.

     (s) ERISA Matters.

     Borrower has paid and discharged all obligations  and  liabilities  arising
under ERISA of a character which, if unpaid or unperformed,  might result in the
imposition of a lien against any of its properties or assets.

     10. AFFIRMATIVE COVENANTS.

     Until payment and  satisfaction  in full of all Liabilities and termination
of this  Agreement,  unless  Borrower  obtains  Lender's  prior written  consent
waiving or  modifying  any of  Borrower's  covenants  hereunder  in any specific
instance, Borrower covenants and agrees as follows:

     (a) Maintenance of Records.

     Borrower shall at all times keep accurate and complete  books,  records and
accounts with respect to all of Borrower's  business  activities,  in accordance
with sound accounting  practices and generally  accepted  accounting  principles
consistently  applied, and shall keep such books, records and accounts,  and any
copies thereof, only at the addresses indicated for such purpose on Exhibit D.

     (b) Notices.

     Borrower shall:

     (i)  Locations.  Promptly (but in no event less than ten (10) days prior to
the occurrence thereof) notify Lender of the proposed opening of an new place of
business or new location of  Collateral,  the closing of any  existing  place of
business or location of Collateral,  any change of in the location of Borrower's
books,  records and accounts (or copies thereof),  the opening or closing of any
post  office box,  the opening or closing of any bank  account or, if any of the
Collateral consists of Goods of a type normally used in more than one state, the
use of any such  Goods in any state  other  than a state in which  Borrower  has
previously advised Lender that such Goods will be used.

     (ii)  Ineligible  Bonds and Mortgage Loans.  Promptly,  upon becoming aware
thereof,  notify  Lender if any Bond or Mortgage Loan subject to a lien in favor
of the Lender is in default.

                                      -19-

<PAGE>

     (iii)  Litigation  and  Proceedings.  Promptly upon becoming aware thereof,
notify  Lender of any actions or  proceedings  which are  pending or  threatened
against Borrower which would have a Material Adverse Effect on Borrower.

     (iv)  Names and Trade  Names.  Notify  Lender  within  ten (10) days of the
change of its name or the use of any trade name,  assumed name,  fictitious name
or division name not previously disclosed to Lender in writing.

     (v) ERISA  Matters.  Promptly  notify  Lender of (x) the  occurrence of any
"reportable  event" (as defined in ERISA) which might result in the  termination
by the Pension Benefit Guaranty Corporation (the "PBGC") of any employee benefit
plan ("Plan")  covering any officers or employees of the Borrower,  any benefits
of which are, or are required to be,  guaranteed by the PBGC, (y) receipt of any
notice  from  the  PBGC of its  intention  to seek  termination  of any  Plan or
appointment of a trustee  therefor or (z) its intention to terminate or withdraw
from any Plan.

     (vi)  Default;  Material  Adverse  Change.  Promptly  advise  Lender of any
material adverse change in the business, property, assets, prospects, operations
or condition,  financial or otherwise,  of Borrower, the occurrence of any Event
of Default  hereunder or the  occurrence  of any event which,  if uncured,  will
become an Event of Default after notice or lapse of time (or both).

All of the foregoing notices shall be provided by Borrower to Lender in writing.

     (c) Compliance with Laws and Maintenance of Permits.

     Borrower   shall   maintain   all   governmental   consents,    franchises,
certificates, licenses, authorizations, approvals and permits, the lack of which
would have a Material  Adverse Effect on Borrower,  and Borrower shall remain in
compliance  with all  applicable  federal,  state,  local and foreign  statutes,
orders,  regulations,  rules and  ordinances,  the failure  with which to comply
would have a Material Adverse Effect on Borrower.

     (d) Inspection and Audits.

     Borrower shall permit Lender,  or any Persons  designated by it, to call at
Borrower's  places of business at any  reasonable  times upon at least 24 hours'
prior notice,  and, without hindrance or delay, to inspect the Collateral and to
inspect,  audit,  check  and  make  extracts  from  Borrower's  books,  records,
journals,  orders,  receipts and any  correspondence  and other data relating to
Borrower's  business,  the  Collateral or any  transactions  between the parties
hereto, and shall have the right to make such verification concerning Borrower's
business as Lender may consider  reasonable  under the  circumstances.  Borrower
shall furnish to Lender such information  relevant to Lender's rights under this
Agreement and the Other  Agreements as Lender shall at any time and from time to
time request. Lender, through its officers,  employees or agents, shall have the
right,  in Lender's  name,  to verify the  validity,  amount or any other matter
relating to any of Borrower's Accounts, the Bonds or the Mortgage Loans by mail,
telephone,  telecopy,  electronic mail, or otherwise. Borrower authorizes Lender
to discuss the affairs,  finances and  business of Borrower  with any  officers,
employees or  directors  of Borrower

                                      -20-

<PAGE>

or with its Parent or any Affiliate or the  officers,  employees or directors of
its Parent or any Affiliate,  and to discuss the financial condition of Borrower
with Borrower's  independent public  accountants.  Any such discussions shall be
without  liability to Lender or to Borrower's  independent  public  accountants.
Borrower shall pay to Lender all customary fees and all costs and  out-of-pocket
expenses incurred by Lender in the exercise of its rights hereunder,  and all of
such fees, costs and expenses shall constitute Liabilities  hereunder,  shall be
payable on demand and, until paid,  shall bear interest at the highest rate then
applicable to Loans hereunder.

     (e) Use of Proceeds.

     All monies and other property  obtained by Borrower from Lender pursuant to
this Agreement shall be used solely for business purposes of Borrower.

     (f) Taxes.

     Borrower  shall file all required tax returns and pay all of its taxes when
due,  subject to any  extensions  granted by the  applicable  taxing  authority,
including,  without  limitation,  taxes  imposed by federal,  state or municipal
agencies, and shall cause any liens for taxes to be promptly released; provided,
that Borrower  shall have the right to contest the payment of such taxes in good
faith by appropriate proceedings so long as (i) the amount so contested is shown
on Borrower's financial statements;  and (ii) the contesting of any such payment
does not give rise to a lien for taxes.  If Borrower fails to pay any such taxes
and in the  absence of any such  contest by  Borrower,  Lender may (but shall be
under no obligation  to) advance and pay any sums required to pay any such taxes
and/or to secure the release of any lien  therefor,  and any sums so advanced by
Lender shall constitute Loans hereunder,  shall be payable by Borrower to Lender
on demand,  and,  until  paid,  shall bear  interest  at the  highest  rate then
applicable to Loans hereunder.

     (g) Intellectual Property.

     Borrower shall maintain adequate licenses,  patents,  patent  applications,
copyrights, service marks, trademarks,  trademark applications,  tradestyles and
trade  names to  continue  its  business  as  heretofore  conducted  by it or as
hereafter  conducted by it unless the failure to maintain  any of the  foregoing
could not reasonably be expected to have a Material Adverse Effect on Borrower.

     (h) Checking Accounts.

     Borrower  shall  maintain  its  general  checking/controlled   disbursement
account with  Lender.  Normal  charges  shall be assessed  thereon.  Although no
compensating  balance is required,  Borrower must keep monthly balances in order
to merit earnings  credits which will cover  Lender's  service charge for demand
deposit account activities.

     11. NEGATIVE COVENANTS.

     Until payment and  satisfaction  in full of all Liabilities and termination
of this  Agreement,  unless  Borrower  obtains  Lender's  prior written  consent
waiving or  modifying  any of  Borrower's  covenants  hereunder  in any specific
instance, Borrower agrees as follows:

                                      -21-

<PAGE>

     (a) Indebtedness.

     Borrower shall not create,  incur,  assume or become obligated (directly or
indirectly),  for any loans or other  indebtedness for borrowed money other than
the Loans and Permitted  Indebtedness.  Notwithstanding the foregoing,  Borrower
may also (i) borrow money from a Person  other than Lender on an  unsecured  and
subordinated  basis if a subordination  agreement in favor of Lender and in form
and  substance  satisfactory  to  Lender is  executed  and  delivered  to Lender
relative thereto; (ii) maintain its present indebtedness listed on Schedule 9(m)
hereto;  (iii) incur  unsecured  indebtedness to trade creditors in the ordinary
course of business;  (iv) incur purchase money indebtedness or capitalized lease
obligations  in  connection  with  capital  expenditures  not to  exceed  in the
aggregate $50,000.00 during the term of this Agreement;  and (v) incur operating
lease obligations in the ordinary course of business.

     (b) Liens.

     Borrower shall not grant or permit to exist  (voluntarily or involuntarily)
any lien, claim, security interest or other encumbrance whatsoever on any of the
Collateral.

     (c)  Mergers,  Sales,  Acquisitions,  Subsidiaries  and Other  Transactions
Outside the Ordinary Course of Business.

     Borrower  shall not (i)  change  its name;  (ii)  enter  into any merger or
consolidation;  (iii) change the state of Borrower's  organization or enter into
any  transaction   which  has  the  effect  of  changing   Borrower's  state  of
organization;  (iv) sell, lease or otherwise  dispose of any of its assets other
than in the ordinary course of business; or (v) purchase the stock, other equity
interests  or all or a material  portion of the assets of any Person or division
of such Person.

     (d) [Intentionally Deleted].

     (e) Investments.

     Borrower shall not purchase or otherwise  acquire,  or contract to purchase
or otherwise  acquire,  the  obligations  or stock of any Person  (collectively,
"Investments"),  other  than  (a)  direct  obligations  of  the  United  States,
obligations insured by the Federal Deposit Insurance Corporation and obligations
unconditionally  guaranteed by the United  States,  (b)  Investments in Mortgage
Loans and Bonds (including  Excluded Mortgage Loans and Bonds),  (c) Investments
in "Unimproved Real Property" (as such term is defined in Borrower's 2006 annual
report), (d) OREO, and (e) Interim Loans.

     (f) Fundamental Changes, Line of Business.

     Borrower shall not amend its organizational  documents or change its Fiscal
Year or enter into a new line of business  materially  different from Borrower's
current  business  unless (i) such  actions  would not have a  Material  Adverse
Effect on the Borrower;  (ii) such actions would not affect the  obligations  of
Borrower to Lender;  (iii) such actions would not affect the  interpretation  of
any of the terms of this Agreement or the Other Agreements;  and (iv) Lender has
received ten (10) days prior written notice of such amendment or change.

                                      -22-

<PAGE>

     (g) Affiliate Transactions.

     Except as set forth on Schedule  11(g) hereto or as  permitted  pursuant to
subsection  9(c)  hereof,  Borrower  shall not  conduct,  permit or suffer to be
conducted, transactions with Affiliates other than transactions for the purchase
or sale of Inventory or services in the ordinary course of business  pursuant to
terms  that are no less  favorable  to  Borrower  than the terms upon which such
transactions would have been made had they been made to or with a Person that is
not an Affiliate.

     (h) Settling of Bonds/Mortgage Loans.

     Following the occurrence and during the continuance of an Event of Default,
Borrower  shall not  settle or adjust  any Bond or  Mortgage  Loan  without  the
consent of Lender.

     (i) Bond/Mortgage Loan Defaults.

     Borrower  shall,  within  thirty  (30) days after a default  (which must be
declared  by  Borrower no later than ninety (90) days after the event of default
by the  Mortgage  Loan  Obligor)  in any Bond or Mortgage  Loan  included in the
Borrowing Base, inform Lender, in writing, of such default.

     (j) Management Fees; Compensation.

          (i)  Management  Fees:  Borrower  shall  not  pay  any  management  or
               consulting  fees to any Persons  (including,  but not limited to,
               American  Investors Group, Inc. and Church Loan Advisors,  Inc.),
               above and beyond what is  authorized  in the  written  management
               agreements   previously   delivered  to  Lender   (including  the
               Management Agreement).

          (ii) Director and Officer Compensation:  Borrower shall not pay annual
               aggregate compensation, whether as salary, bonus or otherwise, to
               all  directors  or  officers of Borrower in excess of one hundred
               ten  percent  (110%) of the  aggregate  compensation,  whether as
               salary,  bonus or  otherwise,  to all  directors  and officers of
               Borrower  in effect on the date of this  Agreement  for the first
               year and one  hundred  ten  percent  (110%) of the  prior  year's
               aggregate compensation amount for each subsequent year during the
               term of this Agreement.  The aggregate annual compensation amount
               shall  be  adjusted  each  year for the net  addition  or loss of
               directors or officers.

     12. FINANCIAL COVENANTS.

     (a) Debt to Tangible Net Worth Covenant.

     Borrower's  Debt to Tangible Net Worth ratio shall not, as of September 30,
2008, and on the last day of each calendar quarter thereafter,  be more than 3.0
to 1.0.  "Debt" being defined for purposes of this subsection as all current and
long term indebtedness of Borrower,  all as determined under generally  accepted
accounting   principles  applied  on  a  basis  consistent  with  the  financial
statements dated June 30, 2008.  "Tangible Net Worth" being defined for purposes
of this  subsection  as  Borrower's  shareholders'  equity  (including  retained
earnings) less the book

                                      -23-

<PAGE>

value of all  intangible  assets as determined  solely by Lender on a consistent
basis plus the amount of any debt  subordinated  to  Lender,  all as  determined
under generally  accepted  accounting  principles  applied on a basis consistent
with the financial statement dated June 30, 2008.

     (b) Collateral Coverage Covenant.

     At all times the unpaid principal balance of the Qualifying  Mortgage Loans
and the Qualifying  Bonds must exceed 1.25 times the outstanding  balance of the
Loans. Borrower may deliver qualifying Mortgage Loans to the Lender, in form and
substance acceptable to the Lender in its reasonable discretion,  to achieve the
foregoing  collateral  coverage  covenant  if  available  Qualifying  Bonds  are
insufficient to satisfy such covenant.

     (c) Debt Service Coverage.

     The Borrower will not, as of the end of any fiscal quarter of the Borrower,
permit the Borrower's EBITDA (earnings before interest,  taxes, depreciation and
amortization)  for the  period  covered  by  four  previous  consecutive  fiscal
quarters (treated as a single accounting  period) to be less than 1.20 times the
interest expense of the Borrower for such period.

     13. DEFAULT.

     The occurrence of any one or more of the following  events shall constitute
an "Event of Default" by Borrower hereunder:

     (a) Payment.

     The failure of any Obligor to pay,  within ten (10) days of when due any of
the Liabilities.

     (b) Breach of this Agreement and the Other Agreements.

     The  failure  of any  Obligor  to  perform,  keep  or  observe  (after  any
applicable notice and cure period) any of the covenants,  conditions,  promises,
agreements or obligations of such Obligor under (i) this Agreement or any of the
Other  Agreements  for a period of fifteen  (15)  calendar  days  after  written
notice,  specifying  such default and requesting  that it be remedied,  given to
such  party by the  Lender  unless  the  Lender  shall  agree in  writing  to an
extension  of such  time  prior to its  expiration  or (ii) any  other  material
agreement with any Person if such failure has a Material  Adverse Effect on such
Obligor.

     (c) Breach of Representations and Warranties.

     The making or  furnishing  by any Obligor to Lender of any  representation,
warranty,  certificate,  schedule,  report or other  communication  within or in
connection with this

                                      -24-
<PAGE>

Agreement or the Other  Agreements  or in  connection  with any other  agreement
between such Obligor and Lender,  which is untrue or  misleading in any material
respect as of the date made.

     (d) Loss of Collateral.

     The loss,  theft,  damage or destruction of or (except as permitted hereby)
sale, lease or furnishing under a contract of service of any of the Collateral.

     (e) Levy, Seizure or Attachment.

     The  making or any  attempt  by any  Person to make any  levy,  seizure  or
attachment upon any of the Collateral not included in the Borrowing Base, unless
the same is contested in good faith by Borrower and by appropriate  proceedings.
If the  Collateral is included in the Borrowing  Base,  the making or attempt to
make any levy,  seizure or attachment  thereon  constitutes  an Event of Default
unless Borrower cures such default by promptly providing replacement  Qualifying
Bonds or  Qualifying  Mortgage  Loans  reasonably  acceptable  to Lender for the
Collateral which is the subject of the levy, seizure or attachment.

     (f) Bankruptcy or Similar Proceedings.

     The commencement of any proceedings in bankruptcy by or against any Obligor
or for the liquidation or reorganization  of any Obligor,  or alleging that such
Obligor  is  insolvent  or unable to pay its  debts as they  mature,  or for the
readjustment  or  arrangement of any Obligor's  debts,  whether under the United
States Bankruptcy Code or under any other law, whether state or federal,  now or
hereafter  existing,  for the  relief of  debtors,  or the  commencement  of any
analogous  statutory  or  non-statutory   proceedings   involving  any  Obligor;
provided, however, that if such commencement of proceedings against such Obligor
is involuntary, such action shall not constitute an Event of Default unless such
proceedings are not dismissed within forty five (45) days after the commencement
of such  proceedings,  though  Lender shall have no  obligation to make Loans to
Borrower  during  such forty five (45) day  period  or, if  earlier,  until such
proceedings are dismissed.

     (g) Appointment of Receiver.

     The  appointment  of a receiver or trustee for any Obligor,  for any of the
Collateral  or  for  any  substantial  part  of  any  Obligor's  assets  or  the
institution  of any  proceedings  for the  dissolution,  or the full or  partial
liquidation,  or  the  merger  or  consolidation,  of  any  Obligor  which  is a
corporation, limited liability company or a partnership; provided, however, that
if such  appointment  or  commencement  of  proceedings  against such Obligor is
involuntary,  such action shall not  constitute an Event of Default  unless such
appointment is not revoked or such  proceedings  are not dismissed  within forty
five (45) days after the commencement of such  proceedings,  though Lender shall
have no  obligation  to make Loans to  Borrower  during such forty five (45) day
period or, if earlier, until such proceedings are dismissed.

                                      -25-

<PAGE>

     (h) Judgment.

     The entry of any  judgments or orders  aggregating  in excess of $50,000.00
against any Obligor which remains  unsatisfied or undischarged and in effect for
thirty (30) days after such entry without a stay of enforcement or execution.

     (i) Death or Dissolution of Obligor.

     The death of any Obligor who is a natural Person, or of any general partner
who is a natural Person of any Obligor which is a partnership, or any member who
is a natural Person of any Obligor which is a limited  liability  company or the
dissolution of any Obligor which is a partnership,  limited  liability  company,
corporation or other entity.

     (j) Criminal Proceedings.

     The institution in any court of a criminal  proceeding  against any Obligor
which would have a Material Adverse Effect on such Obligor, or the indictment of
any  Obligor  for  any  crime  other  than  traffic  and  boating   tickets  and
misdemeanors not punishable by jail terms.

     (k) Change in Management.

     The failure of Church Loan  Advisors,  Inc. to continue  serving as Advisor
and Manager of Borrower pursuant to the Management Agreement.

     (l) Material Adverse Change.

     Any material adverse change in the Collateral,  business, property, assets,
prospects,  operations or condition  (financial or otherwise) of the Borrower or
any other Obligor which (i) in the reasonable  opinion of the Lender  materially
increases  its  risk  with  respect  to  repayment  of the  Loans,  (ii)  in the
reasonable opinion of Lender constitutes a Material Adverse Effect, or (iii) the
Lender otherwise in good faith deems itself insecure.

     14. REMEDIES UPON AN EVENT OF DEFAULT.

     (a) Upon the occurrence  and during the  continuance of an Event of Default
described in subsection 13(g) hereof,  all of the Liabilities  shall immediately
and automatically  become due and payable,  without notice of any kind. Upon the
occurrence of any other Event of Default,  all Liabilities may, at the option of
Lender,  and without  demand,  notice or legal process of any kind, be declared,
and immediately shall become, due and payable.

     (b) Upon the occurrence and during the  continuance of an Event of Default,
Lender may exercise  from time to time any rights and  remedies  available to it
under the Uniform  Commercial Code and any other  applicable law in addition to,
and not in lieu of, any rights and remedies  expressly granted in this Agreement
or in any of the Other  Agreements and all of Lender's rights and remedies shall
be cumulative and  non-exclusive  to the extent permitted by law. In particular,
but not by way of  limitation  of the  foregoing,  Lender may,  without  notice,
demand  or legal  process  of any  kind,  take  possession  of any or all of the
Collateral  (in  addition to  Collateral  of which it already  has  possession),
wherever it may be found,  and for that purpose

                                      -26-

<PAGE>

may  pursue  the  same  wherever  it may be  found,  and may  enter  onto any of
Borrower's  premises  where any of the  Collateral  may be, and search for, take
possession of, remove, keep and store any of the Collateral until the same shall
be sold or  otherwise  disposed of, and Lender shall have the right to store the
same at any of Borrower's  premises without cost to Lender. At Lender's request,
Borrower  shall,  at Borrower's  expense,  assemble the  Collateral  and make it
available  to  Lender  at one or more  places to be  designated  by  Lender  and
reasonably  convenient  to Lender  and  Borrower.  Borrower  recognizes  that if
Borrower  fails to perform,  observe or discharge any of its  Liabilities  under
this Agreement or the Other  Agreements,  no remedy at law will provide adequate
relief to Lender,  and agrees that Lender  shall be  entitled to  temporary  and
permanent  injunctive  relief in any such case without the  necessity of proving
actual  damages.  Any  notification  of  intended  disposition  of  any  of  the
Collateral  required  by law will be  deemed  to be a  reasonable  authenticated
notification  of  disposition  if  given at least  ten (10)  days  prior to such
disposition  and such  notice  shall (i)  describe  Lender  and  Borrower,  (ii)
describe the Collateral that is the subject of the intended  disposition,  (iii)
state the  method of the  intended  disposition,  (iv) state  that  Borrower  is
entitled to an accounting of the Liabilities  and state the charge,  if any, for
an accounting and (v) state the time and place of any public  disposition or the
time  after  which any  private  sale is to be made.  Lender  may  disclaim  any
warranties  that  might  arise  in  connection  with  the  sale,  lease or other
disposition of the Collateral and has no obligation to provide any warranties at
such time.  Any Proceeds of any  disposition  by Lender of any of the Collateral
may be  applied by Lender to the  payment of  expenses  in  connection  with the
Collateral,   including,  without  limitation,  legal  expenses  and  reasonable
attorneys'  fees,  and any  balance  of such  Proceeds  may be applied by Lender
toward the payment of such of the Liabilities, and in such order of application,
as Lender may from time to time elect.

     15. CONDITIONS PRECEDENT.

     The  obligation  of  Lender  to fund the  initial  Loan is  subject  to the
satisfaction or waiver on or before the date hereof of the following  conditions
precedent:

     (a) Lender shall have received each of the agreements,  opinions,  reports,
approvals,  consents,  certificates and other documents set forth on the closing
document  list  attached  hereto  as  Schedule  15(a)  in each  case in form and
substance satisfactory to Lender;

     (b) Since June 30,  2008,  no event  shall have  occurred  which has had or
could  reasonably be expected to have a Material  Adverse Effect on any Obligor,
as determined by Lender in its reasonable discretion, determined in good faith;

     (c) Lender  shall have  received  payment in full of all fees and  expenses
payable to it by  Borrower or any other  Person in  connection  herewith,  on or
before disbursement of the initial Loan hereunder;

     (d) The Obligors shall have executed and delivered to Lender all such other
documents,  instruments  and agreements  which Lender  determines are reasonably
necessary to consummate the transactions contemplated hereby;

     (e) KeyBank shall have  provided a payoff letter  pursuant to which KeyBank
has agreed to release its liens and security interests in and to the Collateral.

                                      -27-

<PAGE>

     (f) Borrower,  Lender and Herring Bank shall have  executed the  Securities
Account Control Agreement.

     16. INDEMNIFICATION.

     Borrower agrees to defend (with counsel  satisfactory to Lender),  protect,
indemnify and hold harmless Lender,  each affiliate or subsidiary of Lender, and
each of their respective officers,  directors,  employees,  attorneys and agents
(each  an  "Indemnified  Party")  from  and  against  any and  all  liabilities,
obligations,  losses, damages,  penalties,  actions,  judgments,  suits, claims,
costs,  expenses and  disbursements  of any kind or nature  (including,  without
limitation,  the  disbursements  and the  reasonable  fees of  counsel  for each
Indemnified  Party in  connection  with  any  investigative,  administrative  or
judicial proceeding,  whether or not the Indemnified Party shall be designated a
party thereto),  which may be imposed on, incurred by, or asserted against,  any
Indemnified  Party (whether direct,  indirect or consequential and whether based
on  any  federal,  state  or  local  laws  or  regulations  including,   without
limitation, securities laws and regulations and commercial laws and regulations,
under common law or in equity,  or based on contract or otherwise) in any manner
relating to or arising out of this Agreement or any Other Agreement, or any act,
event or transaction  related or attendant  thereto,  the making or issuance and
the  management of the Loans or any Letters of Credit or the use or intended use
of the proceeds of the Loans or any Letters of Credit;  provided,  however, that
Borrower shall not have any obligation  hereunder to any Indemnified  Party with
respect to matters caused by or resulting  from the willful  misconduct or gross
negligence of such  Indemnified  Party.  To the extent that the  undertaking  to
indemnify set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy,  Borrower shall satisfy such  undertaking
to the maximum extent  permitted by applicable  law. Any liability,  obligation,
loss, damage,  penalty,  cost or expense covered by this indemnity shall be paid
to each  Indemnified  Party on  demand,  and,  failing  prompt  payment,  shall,
together  with  interest  thereon at the highest rate then  applicable  to Loans
hereunder  from  the date  incurred  by each  Indemnified  Party  until  paid by
Borrower,  be  added  to the  Liabilities  of  Borrower  and be  secured  by the
Collateral. The provisions of this Section 16 shall survive the satisfaction and
payment of the other Liabilities and the termination of this Agreement.

     17. NOTICE.

     All written notices and other written  communications  with respect to this
Agreement shall be sent by ordinary, certified or overnight mail, by telecopy or
delivered  in  person,  and in the case of  Lender  shall be sent to it at 19765
Highway 7, Shorewood,  MN 55331, and in the case of Borrower shall be sent to it
at its principal place of business set forth on Exhibit D hereto or as otherwise
directed  by Borrower in writing.  All  notices  shall be deemed  received  upon
actual receipt thereof or refusal of delivery.

     18. CHOICE OF GOVERNING LAW; CONSTRUCTION; FORUM SELECTION.

     This Agreement and the Other Agreements are submitted by Borrower to Lender
for Lender's  acceptance or rejection at Lender's principal place of business as
an offer by

                                      -28-

<PAGE>

Borrower to borrow monies from Lender now and from time to time  hereafter,  and
shall not be binding upon Lender or become  effective  until accepted by Lender,
in writing, at said place of business.  If so accepted by Lender, this Agreement
and the Other  Agreements  shall be  deemed  to have been made at said  place of
business.  THIS  AGREEMENT  AND THE  OTHER  AGREEMENTS  SHALL  BE  GOVERNED  AND
CONTROLLED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA AS TO  INTERPRETATION,
ENFORCEMENT,   VALIDITY,  CONSTRUCTION,  EFFECT,  AND  IN  ALL  OTHER  RESPECTS,
INCLUDING,  WITHOUT  LIMITATION,  THE  LEGALITY OF THE  INTEREST  RATE AND OTHER
CHARGES,  BUT  EXCLUDING  PERFECTION  OF THE SECURITY  INTERESTS  IN  COLLATERAL
LOCATED  OUTSIDE  OF THE  STATE  OF  MINNESOTA,  WHICH  SHALL  BE  GOVERNED  AND
CONTROLLED BY THE LAWS OF THE RELEVANT  JURISDICTION IN WHICH SUCH COLLATERAL IS
LOCATED. If any provision of this Agreement shall be held to be prohibited by or
invalid under  applicable law, such provision  shall be ineffective  only to the
extent of such prohibition or invalidity,  without invalidating the remainder of
such provision or remaining provisions of this Agreement.

     To induce  Lender to accept this  Agreement,  Borrower  irrevocably  agrees
that, subject to Lender's sole and absolute election, ALL ACTIONS OR PROCEEDINGS
IN ANY  WAY,  MANNER  OR  RESPECT,  ARISING  OUT OF OR FROM OR  RELATED  TO THIS
AGREEMENT,  THE OTHER  AGREEMENTS OR THE COLLATERAL SHALL BE LITIGATED IN COURTS
HAVING  SITUS WITHIN THE CITY OF CHASKA,  STATE OF  MINNESOTA.  BORROWER  HEREBY
CONSENTS AND SUBMITS TO THE  JURISDICTION OF ANY STATE COURT LOCATED WITHIN SAID
CITY AND  STATE  OR ANY  FEDERAL  COURT  LOCATED  IN  MINNEAPOLIS  OR ST.  PAUL,
MINNESOTA.  BORROWER HEREBY WAIVES  PERSONAL  SERVICE OF ANY AND ALL PROCESS AND
AGREES  THAT ALL SUCH  SERVICE  OF  PROCESS  MAY BE MADE UPON SUCH  BORROWER  BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT  REQUESTED,  ADDRESSED TO BORROWER,
AT THE ADDRESS SET FORTH FOR NOTICE IN THIS  AGREEMENT AND SERVICE SO MADE SHALL
BE  COMPLETE  TEN (10) DAYS  AFTER THE SAME HAS BEEN  POSTED.  Lender  agrees to
endeavor  to  provide  a copy of such  process  to the law  firm of  Winthrop  &
Weinstine,  P.A. by mail at the address of 225 South Sixth  Street,  Suite 3500,
Minneapolis,  Minnesota 55402 or by facsimile  transmission at facsimile  number
(612)  604-6942.  Failure of Lender to provide a copy of such process  shall not
impair  Lender's  rights  hereunder,  create a cause of action against Lender or
create any claim or right on behalf of  Borrower  or any third  party.  BORROWER
HEREBY  WAIVES  ANY RIGHT IT MAY HAVE TO  TRANSFER  OR  CHANGE  THE VENUE OF ANY
LITIGATION BROUGHT AGAINST BORROWER BY LENDER IN ACCORDANCE WITH THIS SECTION.

     19. MODIFICATION AND BENEFIT OF AGREEMENT.

     This  Agreement and the Other  Agreements  may not be modified,  altered or
amended  except by an  agreement  in writing  signed by  Borrower  or such other
Person who is a party to such Other Agreement and Lender. Borrower may not sell,
assign or  transfer  this  Agreement,  or the Other  Agreements  or any  portion
thereof,  including,  without limitation,  Borrower's rights, titles,  interest,
remedies, powers or duties hereunder and thereunder. Borrower hereby consents to
Lender's sale, assignment, transfer or other disposition, at any time

                                      -29-

<PAGE>

and from time to time hereafter, of this Agreement, or the Other Agreements,  or
of  any  portion  thereof,  or  participations   therein,   including,   without
limitation,  Lender's rights, titles, interest,  remedies,  powers and/or duties
and agrees  that it shall  execute  and  deliver  such  documents  as Lender may
request  in  connection  with  any  such  sale,  assignment,  transfer  or other
disposition.

     20. HEADINGS OF SUBDIVISIONS.

     The headings of  subdivisions  in this  Agreement  are for  convenience  of
reference only, and shall not govern the interpretation of any of the provisions
of this Agreement.

     21. POWER OF ATTORNEY.

     Borrower  acknowledges  and agrees  that its  appointment  of Lender as its
attorney and  agent-in-fact  for the purposes  specified in this Agreement is an
appointment  coupled with an interest and shall be irrevocable  until all of the
Liabilities are satisfied and paid in full and this Agreement is terminated.

     22. CONFIDENTIALITY.

     Lender hereby agrees to use commercially  reasonable efforts to assure that
any and all information  relating to Borrower which is (i) furnished by Borrower
to Lender (or to any affiliate of Lender); and (ii) non-public,  confidential or
proprietary in nature, shall be kept confidential by Lender or such affiliate in
accordance with applicable law;  provided,  however,  that such  information and
other credit  information  relating to Borrower may be  distributed by Lender or
such affiliate to Lender's or such affiliate's directors,  officers,  employees,
attorneys, affiliates, assignees, participants, auditors, agents and regulators,
and upon the order of a court or other governmental  agency having  jurisdiction
over Lender or such affiliate,  to any other party.  Borrower and Lender further
agree that this  provision  shall  survive the  termination  of this  Agreement.
Notwithstanding  the foregoing,  Borrower hereby consents to Lender publishing a
tombstone or similar advertising material relating to the financing  transaction
contemplated by this Agreement.

     23. COUNTERPARTS.

     This Agreement, any of the Other Agreements,  and any amendments,  waivers,
consents or  supplements  may be executed in any number of  counterparts  and by
different  parties  hereto in  separate  counterparts,  each of  which,  when so
executed  and  delivered,  shall  be  deemed  an  original,  but  all  of  which
counterparts together shall constitute but one agreement.

     24. ELECTRONIC SUBMISSIONS.

     Upon not less than thirty (30) days' prior  written  notice (the  "Approved
Electronic  Form  Notice"),  Lender  may  permit  or  require  that  any  of the
documents, certificates, forms, deliveries or other communications,  authorized,
required or contemplated by this Agreement or the Other Agreements, be submitted
to Lender in "Approved  Electronic Form" (as hereafter defined),  subject to any
reasonable  terms,  conditions  and  requirements  in  the  applicable  Approved
Electronic  Forms Notice.  For purposes hereof  "Electronic  Form" means e-mail,
e-mail attachments, data submitted on web-based forms or any other communication
method that

                                      -30-

<PAGE>

delivers  machine  readable  data  or  information  to  Lender,   and  "Approved
Electronic  Form" means an Electronic  Form that has been approved in writing by
Lender  (which  approval has not been revoked or modified by Lender) and sent to
Borrower in an Approved Electronic Form Notice. Except as otherwise specifically
provided in the applicable Approved Electronic Form Notice, any submissions made
in an applicable  Approved  Electronic Form shall have the same force and effect
that the same submissions would have had if they had been submitted in any other
applicable  form  authorized,  required or contemplated by this Agreement or the
Other Agreements.

     25. WAIVER OF JURY TRIAL; OTHER WAIVERS.

     (a) BORROWER  AND LENDER EACH HEREBY  WAIVES ALL RIGHTS TO TRIAL BY JURY IN
ANY  ACTION  OR  PROCEEDING  WHICH  PERTAINS  DIRECTLY  OR  INDIRECTLY  TO  THIS
AGREEMENT,  ANY OF THE OTHER AGREEMENTS,  THE LIABILITIES,  THE COLLATERAL,  ANY
ALLEGED TORTIOUS CONDUCT BY BORROWER OR LENDER OR WHICH, IN ANY WAY, DIRECTLY OR
INDIRECTLY,  ARISES OUT OF OR RELATES TO THE  RELATIONSHIP  BETWEEN BORROWER AND
LENDER.  IN NO EVENT SHALL LENDER BE LIABLE FOR LOST  PROFITS OR OTHER  SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.

     (b)  Borrower  hereby  waives  demand,  presentment,  protest and notice of
nonpayment,  and further  waives the  benefit of all  valuation,  appraisal  and
exemption laws.

     (c)  Borrower  hereby  waives the  benefit of any law that would  otherwise
restrict  or limit  Lender or any  Affiliate  of Lender in the  exercise  of its
right,  which is hereby  acknowledged  and  agreed to, to  set-off  against  the
Liabilities, without notice at any time hereafter, any indebtedness,  matured or
unmatured,  owing by Lender or such Affiliate of Lender to Borrower,  including,
without limitation any deposit account at Lender or such Affiliate.

     (d)  BORROWER  HEREBY  WAIVES ALL RIGHTS TO NOTICE AND  HEARING OF ANY KIND
PRIOR TO THE EXERCISE BY LENDER OF ITS RIGHTS TO  REPOSSESS  THE  COLLATERAL  OF
BORROWER  WITHOUT  JUDICIAL  PROCESS  OR TO  REPLEVY,  ATTACH  OR LEVY UPON SUCH
COLLATERAL,  PROVIDED  THAT IN THE EVENT THAT LENDER SEEKS TO ENFORCE ITS RIGHTS
HEREUNDER BY JUDICIAL  PROCESS OR SELF HELP,  LENDER SHALL PROVIDE BORROWER WITH
SUCH NOTICES AS ARE REQUIRED BY LAW.

     (e) Lender's  failure,  at any time or times  hereafter,  to require strict
performance  by Borrower of any provision of this  Agreement or any of the Other
Agreements shall not waive, affect or diminish any right of Lender thereafter to
demand strict compliance and performance therewith.  Any suspension or waiver by
Lender of an Event of Default  under this  Agreement or any default under any of
the Other  Agreements  shall not  suspend,  waive or affect  any other  Event of
Default  under  this  Agreement  or any  other  default  under  any of the Other
Agreements,  whether the same is prior or subsequent  thereto and whether of the
same or of a different kind or character.  No delay on the part of Lender in the
exercise  of any right or remedy

                                      -31-
<PAGE>

under this  Agreement or any Other  Agreement  shall  preclude  other or further
exercise  thereof  or  the  exercise  of  any  right  or  remedy.  None  of  the
undertakings,  agreements, warranties, covenants and representations of Borrower
contained  in this  Agreement  or any of the  Other  Agreements  and no Event of
Default under this Agreement or default under any of the Other  Agreements shall
be deemed to have been  suspended or waived by Lender unless such  suspension or
waiver is in writing, signed by a duly authorized officer of Lender and directed
to Borrower specifying such suspension or waiver.

     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first written above.

AMERICAN CHURCH MORTGAGE                BEACON BANK, A MINNESOTA
COMPANY, A MINNESOTA CORPORATION        BANKING CORPORATION

By                                      By
Title                                   Title

                                      -32-
<PAGE>

                     EXHIBIT A - BORROWING BASE CERTIFICATE

                         (TO BE PROVIDED BY BEACON BANK)

<PAGE>

                   EXHIBIT B - BOND/MORTGAGE LOAN CERTIFICATE

     The undersigned, _________________________________, the President and Chief
Financial  Officer of American Church Mortgage  Company,  do hereby certify that
the following  constitute  Qualifying  Bonds and/or  Qualifying  Mortgage  Loans
pursuant to the terms of the Loan and Security  Agreement by and between  Beacon
Bank and American Church Mortgage Company dated as of September _____, 2008:

(insert bond description or mortgage loan description by issuer/obligor, dollar
          amount, principal balance, interest rate and maturity date)

     For any  Mortgage  Loan,  the note  delivered  to  Beacon  Bank is the sole
original note for such Mortgage Loan.

     American  Church  Mortgage  Company is the lawful  owner of the  Collateral
described  above,  free  from  all  liens,   claims,   security   interests  and
encumbrances  whatsoever,  whether  voluntarily  or  involuntarily  created  and
whether or not perfected.

                                            AMERICAN CHURCH MORTGAGE COMPANY

                                        ----------------------------------------
                                        By:
                                        Its:     President

                                        ----------------------------------------
                                        By:
                                        Its:     Chief Financial Officer

<PAGE>

                       EXHIBIT C - COMPLIANCE CERTIFICATE

     Attached to and made a part of that certain Loan and Security Agreement, as
it may be amended in accordance with its terms from time to time,  including all
exhibits  attached  thereto  (the  "Agreement")  of even date  herewith  between
AMERICAN CHURCH MORTGAGE COMPANY ("Borrower") and BEACON BANK ("Lender").

     This  Certificate  is  submitted   pursuant  to  subsection  7(c)  of  this
Agreement.

     The  undersigned  hereby  certifies  to Lender  that as of the date of this
Certificate:

     1. The undersigned is the _____________________ of Borrower.

     2. There exists no event or circumstance which is or which with the passage
of time, the giving of notice, or both would constitute an Event of Default,  as
that term is defined  in this  Agreement,  or, if such an event of  circumstance
exists, a writing  attached hereto  specifies the nature thereof,  the period of
existence  thereof  and the action that  Borrower  has taken or proposes to take
with respect thereto.

     3. No material  adverse  change in the  condition,  financial or otherwise,
business,  property,  or results of  operations  of Borrower has occurred  since
[date of last Compliance  Certificate/last  financial statements delivered prior
to  closing],  or, if such a change  has  occurred,  a writing  attached  hereto
specifies the nature  thereof and the action that Borrower has taken or proposes
to take with respect thereto.

     4.  Borrower is in  compliance  with the  representations,  warranties  and
covenants  in this  Agreement,  or, if  Borrower is not in  compliance  with any
representations,  warranties or covenants in this Agreement,  a writing attached
hereto  specifies the nature  thereof,  the period of existence  thereof and the
action that Borrower has taken or proposes to take with respect thereto.

     5. The  financial  statements  of  Borrower  being  concurrently  delivered
herewith have been prepared in accordance  with  generally  accepted  accounting
principles  consistently  applied  and there  have been no  material  changes in
accounting  policies or financial reporting practices of Borrower since [date of
the last  Compliance  Certificate/date  of last financial  statements  delivered
prior to closing]  or, if any such  change has  occurred,  such  changes are set
forth in a writing attached hereto.

     6.  Attached  hereto is a true and  correct  calculation  of the  financial
covenants contained in this Agreement.

                                               AMERICAN CHURCH MORTGAGE COMPANY

                                               By______________________________
                                               Its_____________________________

<PAGE>

                 EXHIBIT D -- BUSINESS AND COLLATERAL LOCATIONS

     Attached to and made a part of that certain Loan and Security  Agreement of
even date herewith  between  AMERICAN CHURCH MORTGAGE  COMPANY  ("Borrower") and
BEACON BANK ("Lender").

B.   Borrower's  business  locations  (please  indicate  which  location  is the
     principal place of business and at which locations originals and all copies
     of Borrower's books, records and accounts are kept).

C.   Other locations of Collateral  (including,  without  limitation,  warehouse
     locations, processing locations, consignment locations) and all post office
     boxes of Borrower.  Please  indicate the  relationship  of such location to
     Borrower (i.e. public warehouse, processor, etc.).

D.   Bank Accounts of Borrower (other than those at Lender):

Bank (with address)              Account Number                 Type of AccountExhibit 10.2
                                     FORM OF
                                 REVOLVING NOTE

                                                              _________ __, 2008
$8,000,000.00

     American Church Mortgage Company, a Minnesota corporation (the "Borrower"),
for value  received,  hereby  promises  to pay to the order of  Beacon  Bank,  a
Minnesota banking  corporation  ("Lender"),  at the Lender's  principal place of
business at 19765 Highway Seven,  Shorewood, MN 55331, or at such other place as
may be designated by the holder hereof,  in lawful money of the United States of
America,  the principal sum of Eight Million  Dollars  ($8,000,000.00),  or such
lesser  amount as may be advanced  from time to time,  together with interest at
the  Wall  Street  Journal  Prime  Rate  (the  "Prime  Rate")  as  such  rate is
established from time to time. The Prime Rate is currently 5%. The interest rate
is subject to a floor of 5%. If the Prime Rate is greater  than 6%, the interest
rate hereon shall be reduced by 50 basis points, subject to a floor of 6% (e.g.,
if the Prime Rate is 6.25%,  the  interest  rate hereon shall be equal to 6%; if
the Prime Rate is 7%, then the  interest  rate  hereon  shall be equal to 6.5%).
Interest  shall  be due and  payable  monthly  on the  first  day of each  month
commencing on October 1, 2008.  All payments shall be applied first to interest,
then to reduction of  principal.  Interest  shall be  calculated on the basis of
actual  days  elapsed in a 360 day year.  The entire  unpaid  principal  and all
accrued and unpaid  interest  shall be due and payable in full on September  12,
2010, or such earlier date as is defined in a Loan and Security Agreement ("Loan
Agreement")  entered  into by and  between  Borrower  and  Lender  of even  date
herewith. This is a balloon payment.

     Pursuant to the terms of the Loan  Agreement,  principal  may be  advanced,
repaid and readvanced.  The Loan Agreement contains limitations and restrictions
on advances and other terms and conditions.

     Borrower  shall pay to Lender a late  charge  of five  percent  (5%) of any
monthly  installment  not received by the Lender  within ten (10) days after the
installment  is due, but such late charge  shall not apply to the final  balloon
payment due hereon  provided the final  balloon  payment is paid within  fifteen
(15) days of the date on which it is due.

     The  holder of this Note may,  at its  option,  without  notice  (provided,
however,  that only after regular  monthly  payments have commenced on the Note,
Lender  will give  Borrower,  at  Borrower's  last known  address  ten (10) days
written  notice  [calculated  from the date of mailing]  prior to  acceleration)
declare this Note  immediately  due and payable for the entire unpaid  principal
hereof plus accrued  interest hereon upon or at any time after the occurrence of
any of the following  events:  (i) any default in the payment of this Note; (ii)
any default under the terms or conditions of any security herewith or heretofore
or  hereafter  given to or acquired and held by the holder of this Note to which
any maker, co-maker,  endorser,  surety or guarantor hereof is a party; (iii) or
if the holder hereof, after giving due consideration to commercially  reasonable
standards,  deems itself  insecure.  The Lender shall have no obligation to make

<PAGE>

further  advances under any loan  commitment  regardless of the amount loaned at
any time Lender considers the loan insecure for any reason.

     Each maker,  co-maker,  endorser,  surety and guarantor  hereto jointly and
severally  agrees to pay this Note and  guarantees  payment  hereof  and  waives
demand,  presentment,  protest  and  notice of  dishonor,  and  consents  to any
extensions and renewals hereof without notice and consents to the release by the
holder of this Note with or without consideration of any of them, and exonerates
the holder of this Note from any duty or obligation to make demand on anyone for
payment or any collateral now or hereafter  securing this Note or to give notice
to anyone of  nonpayment  thereof or to collect or sell the same and consents to
the  extension,  renewal,  exchange,  surrender or release by the holder of this
Note with or without consideration of any such collateral,  and agrees that when
or at any time after this Note  becomes due, the holder of this Note may without
notice,  offset or charge this Note  against any bank  account or other  account
then  maintained  by any of them with the  holder of this Note or then  existing
between any of them and the holder of this Note and to pay any  deficiency,  and
agree  in  case  of any  default  to pay  all  costs  of  collection,  including
reasonable attorney's fees.

     Lender has the right to further  extend this Note.  Any such  extension may
provide for an extended period of time for principal  repayment,  an increase or
decrease in the interest rate,  advancement of additional principal sums, or any
combination  thereof  (together  with the inclusion of fees and costs related to
such  extension)  resulting in principal,  interest and monthly  payment amounts
equal to or exceeding those originally stated.

                                               BORROWER

                                               AMERICAN CHURCH MORTGAGE COMPANY

                                               By:      ______________________
                                                          Phillip J. Myers
                                              Its:        President

4035798v1

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