Document:

exv10w24

Exhibit 10.24

SUMMARY OF BOARD COMPENSATION

Non-employee directors of Pacific Sunwear of California, Inc. (the “Company”) receive compensation
for their services to the Board of Directors and related committees as follows:

	 	 	 	 	 
	Amount	 	Description
	$	50,000	 	 	Lead director annual retainer, disbursed in five equal payments for each
regularly scheduled Board meeting.

	 	 	 	 	 

	 	30,000	 	 	Annual retainer for all other non-employee directors, disbursed in five equal
payments for each regularly scheduled Board meeting.

	 	 	 	 	 

	 	10,000	 	 	Audit committee chairman annual retainer, disbursed in same manner as Board
member annual retainer (excludes lead director).

	 	 	 	 	 

	 	5,000	 	 	Non-audit committee chairman annual retainer, disbursed in same manner as Board
member annual retainer (excludes lead director).

	 	 	 	 	 

	 	3,000	 	 	Attendance fee for each in-person Board meeting.

	 	 	 	 	 

	 	1,250	 	 	Attendance fee for each telephonic Board meeting or committee meeting of any kind.

     All directors are reimbursed for expenses incurred in attending meetings of the Board of
Directors.1 Each non-employee director of the Company currently receives, and will
continue to receive, an annual award grant of 9,000 stock appreciation rights, which have a base
price equal to the closing market price of the Company’s common stock on the date of the grant and
are payable in shares of common stock. Sally Frame Kasaks, who is the Chief Executive Officer of
the Company, is not paid any fees or additional remuneration for her services as a member of the
Board of Directors.

 

			
	1	 	To the extent any expense reimbursements provided for
in this Summary of Board Compensation are taxable to a director and provide for
a deferral of compensation within the meaning of Section 409A of the Internal
Revenue Code, the director shall complete all steps required for reimbursement
so as to facilitate payment, and any such reimbursements shall be paid to the
Director on or before December 31 of the calendar year following the calendar
year in which the expense was incurred. Such reimbursements shall not be
subject to liquidation or exchange for other benefits, and the expenses
eligible for reimbursement in one calendar year shall not affect the expenses
eligible for reimbursement in any other calendar year.exv10w25

EXHIBIT 10.25

SUMMARY OF NAMED EXECUTIVE OFFICERS’ COMPENSATION FOR FISCAL 2009

Base Salaries. Following are the current annual salaries for the executive officers of Pacific
Sunwear of California, Inc. (the “Company”) who will appear on the Summary Compensation Table
included in the Company’s proxy statement to be filed with the Securities and Exchange Commission
for the Company’s 2009 Annual Meeting of Shareholders (the “Named Executive Officers”):

	 	 	 	 	 	 	 	 	 
	Named Executive Officer	 	Title	 	Annual Base Salary
	Sally Frame Kasaks
	 	Chairman of the Board and Chief Executive Officer	 	$	1,250,000	 
	Michael L. Henry
	 	Senior Vice President, Chief Financial Officer and Secretary	 	$	300,000	 

Annual Bonuses. The Company provides each of the Named Executive Officers with an annual incentive
bonus opportunity based on the performance of the Company and/or the executive. Actual bonus
amounts are determined by the Compensation Committee of the Company’s Board of Directors. Ms.
Kasaks’ target incentive bonus is 100% of her base salary with a maximum incentive bonus of 200% of
her base salary. Mr. Henry’s target incentive bonus is 50% of his base salary with maximum
incentive bonus of 100% of his base salary..

Additional Compensation. The Named Executive Officers are also entitled to participate in various
Company plans, and are subject to other written agreements, in each case as set forth in exhibits
to the Company’s filings with the Securities and Exchange Commission. In addition, the Named
Executive Officers may be eligible to receive perquisites and other personal benefits as disclosed
in the Company’s proxy statements filed with the Securities and Exchange Commission in connection
with the Company’s annual meetings of shareholders.EXHIBIT 4.1

                                    INDENTURE

                  AMERICAN CHURCH MORTGAGE COMPANY, as obligor

                     Series C Secured Investor Certificates

                                   $20,000,000

                            HERRING BANK, as trustee

                            Dated as of April 1, 2009

<PAGE>

                                TABLE OF CONTENTS

CROSS-REFERENCE TABLE ....................................................    IV

ARTICLE I.        DEFINITIONS AND INCORPORATION BY REFERENCE .............     1

  SECTION 1.1     DEFINITIONS ............................................     1
  SECTION 1.2     OTHER DEFINITIONS ......................................     4
  SECTION 1.3     INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT ......     4
  SECTION 1.4     RULES OF CONSTRUCTION ..................................     5

ARTICLE II.       THE SECURITIES .........................................     5

  SECTION 2.1     UNLIMITED AMOUNT; ACCOUNTS; INTEREST; MATURITY .........     5
  SECTION 2.2     TRANSACTION STATEMENT; RESCISSION ......................     6
  SECTION 2.3     REGISTRAR AND PAYING AGENT .............................     6
  SECTION 2.4     DEPOSIT OF PRINCIPAL AND INTEREST WITH PAYING AGENT ....     6
  SECTION 2.5     LIST OF HOLDERS ........................................     7
  SECTION 2.6     TRANSFER AND EXCHANGE ..................................     7
  SECTION 2.7     PAYMENT OF PRINCIPAL AND INTEREST; PRINCIPAL AND
                  INTEREST RIGHTS PRESERVED ..............................     7
  SECTION 2.8     RESERVED ...............................................     8
  SECTION 2.9     OUTSTANDING SECURITIES .................................     8
  SECTION 2.10    TREASURY SECURITIES ....................................     9
  SECTION 2.11    RESERVED ...............................................     9
  SECTION 2.12    RESERVED ...............................................     9
  SECTION 2.13    DEFAULTED INTEREST .....................................     9
  SECTION 2.14    BOOK-ENTRY REGISTRATION ................................     9
  SECTION 2.15    INITIAL AND PERIODIC STATEMENTS ........................    10

ARTICLE III.      REDEMPTION .............................................    10

  SECTION 3.1     REDEMPTION OF SECURITIES AT THE COMPANY'S ELECTION .....    10
  SECTION 3.2     REDEMPTION OF SECURITIES AT THE HOLDER'S ELECTION ......    11
  SECTION 3.3     OFFER TO REDEEM SECURITIES UPON CHANGE OF THE
                  COMPANY'S ADVISOR ......................................    11

ARTICLE IV.       COVENANTS ..............................................    12

  SECTION 4.1     PAYMENT OF SECURITIES ..................................    12
  SECTION 4.2     MAINTENANCE OF OFFICE OR AGENCY ........................    12
  SECTION 4.3     SEC REPORTS AND OTHER REPORTS ..........................    13
  SECTION 4.4     COMPLIANCE CERTIFICATE .................................    13
  SECTION 4.5     STAY, EXTENSION AND USURY LAWS .........................    14
  SECTION 4.6     LIQUIDATION ............................................    14
  SECTION 4.7     FINANCIAL COVENANTS ....................................    14
  SECTION 4.8     RESTRICTIONS ON DIVIDENDS AND CERTAIN TRANSACTIONS
                  WITH AFFILIATES ........................................    14
  SECTION 4.9     COLLATERAL .............................................    15

<PAGE>

  SECTION 4.10    APPOINTMENT AS ATTORNEY-IN-FACT ........................    16

ARTICLE V.        SUCCESSORS .............................................    18

  SECTION 5.1     WHEN THE COMPANY MAY MERGE, ETC. .......................    18
  SECTION 5.2     SUCCESSOR CORPORATION SUBSTITUTED ......................    18

ARTICLE VI.       DEFAULTS AND REMEDIES ..................................    19

  SECTION 6.1     EVENTS OF DEFAULT ......................................    19
  SECTION 6.2     ACCELERATION ...........................................    20
  SECTION 6.3     OTHER REMEDIES .........................................    20
  SECTION 6.4     WAIVER OF PAST DEFAULTS ................................    21
  SECTION 6.5     CONTROL BY MAJORITY ....................................    21
  SECTION 6.6     LIMITATION ON SUITS ....................................    21
  SECTION 6.7     RIGHTS OF HOLDERS TO RECEIVE PAYMENT ...................    21
  SECTION 6.8     COLLECTION SUIT BY TRUSTEE .............................    22
  SECTION 6.9     TRUSTEE MAY FILE PROOFS OF CLAIM .......................    22
  SECTION 6.10    PRIORITIES .............................................    22
  SECTION 6.11    UNDERTAKING FOR COSTS ..................................    23

ARTICLE VII.      TRUSTEE ................................................    23

  SECTION 7.1     DUTIES OF TRUSTEE ......................................    23
  SECTION 7.2     RIGHTS OF TRUSTEE ......................................    24
  SECTION 7.3     INDIVIDUAL RIGHTS OF TRUSTEE ...........................    25
  SECTION 7.4     TRUSTEE'S DISCLAIMER ...................................    25
  SECTION 7.5     NOTICE OF DEFAULTS .....................................    25
  SECTION 7.6     REPORTS BY TRUSTEE TO HOLDERS ..........................    25
  SECTION 7.7     COMPENSATION AND INDEMNITY .............................    26
  SECTION 7.8     REPLACEMENT OF TRUSTEE .................................    27
  SECTION 7.9     SUCCESSOR TRUSTEE BY MERGER, ETC. ......................    27
  SECTION 7.10    ELIGIBILITY; DISQUALIFICATION ..........................    28
  SECTION 7.11    PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY ......    28

ARTICLE VIII.     DISCHARGE OF INDENTURE .................................    28

  SECTION 8.1     TERMINATION OF COMPANY'S OBLIGATIONS ...................    28
  SECTION 8.2     APPLICATION OF TRUST MONEY .............................    29
  SECTION 8.3     REPAYMENT TO COMPANY ...................................    29
  SECTION 8.4     REINSTATEMENT ..........................................    30

ARTICLE IX.       AMENDMENTS .............................................    30

  SECTION 9.1     WITHOUT CONSENT OF HOLDERS .............................    30
  SECTION 9.2     WITH CONSENT OF HOLDERS ................................    30
  SECTION 9.3     COMPLIANCE WITH TRUST INDENTURE ACT ....................    31
  SECTION 9.4     REVOCATION AND EFFECT OF CONSENTS ......................    31
  SECTION 9.5     NOTATION ON OR EXCHANGE OF SECURITIES ..................    31
  SECTION 9.6     TRUSTEE TO SIGN AMENDMENTS, ETC. .......................    31

ARTICLE X.        MISCELLANEOUS ..........................................    32

  SECTION 10.1    TRUST INDENTURE ACT CONTROLS ...........................    32

                                       ii

<PAGE>

  SECTION 10.2    NOTICES ................................................    32
  SECTION 10.3    COMMUNICATION BY HOLDERS WITH OTHER HOLDERS ............    33
  SECTION 10.4    CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT .....    33
  SECTION 10.5    STATEMENTS REQUIRED IN CERTIFICATE OR OPINION ..........    33
  SECTION 10.6    RULES BY TRUSTEE AND AGENTS ............................    33
  SECTION 10.7    LEGAL HOLIDAYS .........................................    34
  SECTION 10.8    NO RECOURSE AGAINST OTHERS .............................    34
  SECTION 10.9    DUPLICATE ORIGINALS ....................................    34
  SECTION 10.10   GOVERNING LAW ..........................................    34
  SECTION 10.11   NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS ..........    34
  SECTION 10.12   SUCCESSORS .............................................    34
  SECTION 10.13   SEVERABILITY ...........................................    34
  SECTION 10.14   COUNTERPART ORIGINALS ..................................    34
  SECTION 10.15   TABLE OF CONTENTS, HEADINGS, ETC. ......................    35

SIGNATURES        ........................................................    36

                                       iii

<PAGE>

CROSS-REFERENCE TABLE

*Trust Indenture Act Section ...............................   Indenture Section
310(a)(1) ..................................................                7.10
(a)(2) .....................................................                7.10
(a)(3) .....................................................                N.A.
(a)(4) .....................................................                N.A.
(a)(5) .....................................................                N.A.
(b) ........................................................           7.8; 7.10
(c) ........................................................                N.A.
311(a) .....................................................                7.11
(b) ........................................................                7.11
(c) ........................................................                N.A.
312(a) .....................................................                 2.5
(b) ........................................................                11.3
(c) ........................................................                11.3
313(a) .....................................................                 7.6
(b)(1) .....................................................                N.A.
(b)(2) .....................................................                 7.6
(c) ........................................................           7.6; 11.2
(d) ........................................................                 7.6
314(a) .....................................................      4.3; 4.4; 11.2
(b) ........................................................              4.9(c)
(c)(1) .....................................................                11.4
(c)(2) .....................................................                11.4
(c)(3) .....................................................                N.A.
(d) ........................................................                N.A.
(e) ........................................................                11.5
(f) ........................................................                N.A.
315(a) .....................................................              7.1(b)
(b) ........................................................           7.5; 11.2
(c) ........................................................              7.1(a)
(d) ........................................................              7.1(c)
(e) ........................................................                6.11
316(a)(last sentence) ......................................                2.10
(a)(1)(A) ..................................................                 6.5
(a)(1)(B) ..................................................                 6.4
(a)(2) .....................................................                N.A.
(b) ........................................................                 6.7
(c) ........................................................                N.A.
317(a)(1) ..................................................                 6.8
(a)(2) .....................................................                 6.9
(b) ........................................................                 2.4
318(a) .....................................................                11.1

N.A. means not applicable
* This Cross Reference Table is not part of the Indenture

                                       iv

<PAGE>

      THIS  INDENTURE is hereby entered into as of April 1, 2009, by and between
American Church Mortgage Company, a Minnesota  corporation (the "Company"),  and
Herring Bank, as trustee (the "Trustee").

      The Company and the Trustee agree as follows for the benefit of each other
and for the equal and  ratable  benefit  of the  Holders of the Series C Secured
Investor   Certificates   of  the  Company  issued  pursuant  to  the  Company's
registration  statement  on Form S-11 (Reg. No. 333-154831)  declared  effective
by the Securities and Exchange  Commission on March 30, 2009 (the  "Registration
Statement"):

                                   ARTICLE I.

                   DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.1 Definitions.

      "Account"  means  the  record  of  beneficial   ownership  of  a  Security
maintained by the Registrar.

      "Advisor" means Church Loan Advisors, Inc., the Company's advisor.

      "Advisory  Agreement"  means the  Company's  advisory  agreement  with the
Advisor  pursuant to which the Advisor  manages the  business and affairs of the
Company, as the same has been or may be amended from time to time.

      "Affiliate"  of any  specified  Person means any other Person  directly or
indirectly  controlling  or  controlled  by or under  direct or indirect  common
control  with  such  specified  Person.  For the  purposes  of this  definition,
"control"  (including,  with  correlative  meanings,  the  terms  "controlling,"
"controlled  by" and "under common control  with"),  as used with respect to any
Person,  shall mean the  possession,  directly  or  indirectly,  of the power to
direct or cause the  direction  of the  management  or policies of such  Person,
whether through the ownership of voting securities, by agreement or otherwise.

      "Agent"  means  any  Registrar,   Paying  Agent  or  co-registrar  of  the
Securities.

      "Board of  Directors"  means the Board of  Directors of the Company or any
authorized committee of the Board of Directors.

      "Business Day" means any day other than a Legal Holiday.

      "Company"  means  American  Church  Mortgage  Company,  unless  and  until
replaced by a successor in accordance with Article V hereof and thereafter means
such successor.

      "Corporate  Trust  Office"  means the  office of the  Trustee at which the
corporate  trust  business of the Trustee  shall,  at any  particular  time,  be
principally  administered,  which  office  is,  at the  date  as of  which  this
Indenture is  originally  dated,  located at 1608 S. Polk St.,  Amarillo,  Texas
79102, Attention: Catana Gray, Vice-President.

<PAGE>

      "Default"  means  any  event  that is or with the  passage  of time or the
giving of notice or both would be an Event of Default.

      "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      "Fiscal Year" means initially a December 31 year end.

      "GAAP" means, as of any date, generally accepted accounting principles set
forth in the opinions and  pronouncements of the Accounting  Principles Board of
the American  Institute of  Certified  Public  Accountants  and  statements  and
pronouncements  of the  Financial  Accounting  Standards  Board or in such other
statements  by such other  entity as  approved by a  significant  segment of the
accounting profession, which are in effect from time to time.

      "Guarantee"  means a guarantee  (other than by  endorsement  of negotiable
instruments  for  collection  in the  ordinary  course of  business),  direct or
indirect,  in any manner (including,  without limitation,  letters of credit and
reimbursement  agreements  in  respect  thereof),  of  all or  any  part  of any
Indebtedness.

      "Holder" means a Person in whose name a Security is registered.

      "Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent,  in respect of borrowed money or evidenced by
bonds,  notes,  debentures  or  similar  instruments  or  letters  of credit (or
reimbursement  agreements  in  respect  thereof)  or  representing  the  balance
deferred and unpaid of the purchase  price of any  property  (including  capital
Lease  obligations) or  representing  any hedging  obligations,  except any such
balance that  constitutes an accrued  expense or a trade payable,  if and to the
extent  any of the  foregoing  indebtedness  (other  than  letters of credit and
hedging  obligations)  would appear as a liability  upon a balance sheet of such
Person  prepared in accordance  with GAAP, and also includes,  to the extent not
otherwise  included,  (a) the  Guarantee of items that would be included  within
this definition,  and (b) liability for items that would arise by operation of a
Person's status as a general partner of a partnership.

      "Indenture"  means, this Indenture as amended or supplemented from time to
time.

      "Interest Accrual Period" means, as to each Security,  the period from the
later of the Issue Date of such  Security or the day after the last Payment Date
upon which an interest payment was made until the following  Payment Date during
which interest accrues on each Security with respect to any Payment Date.

      "Issue Date" means,  with respect to any Security,  the date on which such
Security is deemed  registered on the books and records of the Registrar,  which
shall be the date the Company  accepts funds for the purchase of the Security if
such funds are received prior to 12:01 p.m. (Central Time) on a Business Day, or
if such funds are received after such time, on the next Business Day.

      "Maturity Date" means, with respect to any Security, the date on which the
principal of such Security becomes due and payable as therein provided.

                                        2

<PAGE>

      "Maturity  Record Date" means,  with respect to any Security,  as of 11:59
p.m. on the date fifteen (15) days prior to the Maturity Date or Redemption Date
applicable to such Security.

      "Obligations"  means  any  principal,  interest  (including  Post-Petition
Interest), penalties, fees, indemnifications,  reimbursements, damages and other
liabilities payable under the documentation governing any Indebtedness.

      "Officer" means the Chairman of the Board or principal  executive  officer
of the Company,  the  President or operating  officer of the Company,  the Chief
Financial Officer or principal financial officer of the Company,  the Treasurer,
any  Assistant  Treasurer,  Controller  or  principal  officer  of the  Company,
Secretary or any Vice-President of the Company.

      "Officer's Certificate" means a certificate signed by an Officer.

      "Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable  to the Trustee.  The counsel may be an employee of or counsel to the
Company or the Trustee.

      "Payment Date" means the last day of each calendar quarter, or if such day
is not a Business Day, the Business Day immediately following such day and, with
respect to a specific  Security,  the Maturity Date or  Redemption  Date of such
Security.

      "Person" means any individual,  corporation,  partnership,  joint venture,
association,   joint  stock  company,  trust,   unincorporated  organization  or
government or any agency or political subdivision thereof.

      "Post-Petition Interest" means interest accruing after the commencement of
any bankruptcy or insolvency  case or proceeding  with respect to the Company or
any  receivership,   liquidation,   reorganization  or  other  similar  case  or
proceeding in connection therewith, at the rate applicable to such Indebtedness,
whether or not such interest is an allowable claim in any such proceeding.

      "Prospectus"  means the prospectus  relating to the Securities,  including
any prospectus supplement, forming part of the Registration Statement.

      "Redemption Date" has the meaning given in Article III hereof.

      "Redemption Price" means, with respect to any Security to be redeemed, the
principal  amount of such Security  plus the interest  accrued but unpaid during
the Interest Accrual Period up to the Redemption Date for such security.

      "Regular  Record Date" means,  with  respect to each Payment  Date,  as of
11:59 p.m. on the date fifteen (15) days prior to such Payment Date.

      "Responsible  Officer"  when used with respect to the  Trustee,  means any
officer in its Corporate  Trust Office,  or any other  assistant  officer of the
Trustee in its Corporate Trust Office customarily  performing  functions similar
to  those  performed  by the  Persons  who at the time  shall be such  officers,
respectively,  or to whom any corporate trust matter is referred  because of his
or her knowledge of and familiarity with the particular subject.

                                        3

<PAGE>

      "SEC" means the U.S. Securities and Exchange Commission.

      "Security" or "Securities"  means, the Company's Series C Secured Investor
Certificates issued under this Indenture pursuant to the Registration Statement.

      "TIA"  means  the  Trust   Indenture   Act  of  1939   (15 U.S.C.   ss.ss.
77aaa-77bbbb)  as in effect on the date on which  this  Indenture  is  qualified
under the TIA.

      "Trustee" means Herring Bank, until a successor  replaces it in accordance
with the  applicable  provisions  of this  Indenture  and  thereafter  means the
successor serving hereunder.

      "U.S.  Government  Obligations"  means  direct  obligations  of the United
States of America,  or any agency or instrumentality  thereof for the payment of
which the full faith and credit of the United States of America is pledged.

Section 1.2 Other Definitions.

            Term ..................................   Defined in Section

            "Bankruptcy Law" ......................                  6.1
            "Collateral" ..........................               4.9(a)
            "Custodian" ...........................                  6.1
            "Event of Default" ....................                  6.1
            "Legal Holiday" .......................                 10.7
            "Paying Agent" ........................                  2.3
            "Registrar" ...........................                  2.3
            "Registration Statement" ..............         Introduction
            "Securities Register" .................                  2.3
            "Transfer" ............................               4.9(h)

Section 1.3 Incorporation by Reference of Trust Indenture Act.

      Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated  by reference in and made a part of this  Indenture.  The following
TIA terms used in this Indenture have the following meanings:

            "indenture securities" means the Securities;

            "indenture security holder" means any Holder of the Securities;

            "indenture to be qualified" means this Indenture;

            "indenture trustee" or "institutional trustee" means the Trustee;

            "obligor"  on the  Securities  means the  Company  or any  successor
            obligor upon the Securities.

                                        4

<PAGE>

      All  other  terms  used in this  Indenture  that are  defined  by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.

Section 1.4 Rules of Construction.

      Unless the context otherwise requires: (a) a term has the meaning assigned
to it; (b) an accounting term not otherwise  defined has the meaning assigned to
it in accordance  with GAAP; (c) references to GAAP, as of any date,  shall mean
GAAP in effect in the United  States as of such date and  consistently  applied;
(d) "or" is not exclusive;  (e) words in the singular include the plural, and in
the plural include the singular;  and (f) provisions apply to successive  events
and transactions.

                                   ARTICLE II.

                                 THE SECURITIES

Section 2.1 Unlimited Amount; Accounts; Interest; Maturity.

      (a)   The outstanding aggregate principal amount of Securities outstanding
at any time is limited to $20,000,000,  provided,  however, that the Company and
the Trustee  may,  without the consent of any Holder,  increase  such  aggregate
principal  amount of  Securities  which  may be  outstanding  at any  time.  The
Securities may be subject to notations, legends or endorsements required by law,
stock exchange rule, agreements to which the Company is subject or usage.

      (b)   Except as provided in Section 2.14 hereof,  each Security  shall not
be evidenced by a promissory  note.  The record of  beneficial  ownership of the
Securities  shall  be  maintained  and  updated  by the  Registrar  through  the
establishment and maintenance of Accounts.  Initially, each Security shall be in
such  denominations as may be designated from time to time by the Company.  Each
Security  shall have a term of not less than thirteen (13) years and not greater
than  twenty  (20)  years as shall be  designated  by the  Holder at the time of
purchase, subject to the Company's acceptance thereof.

      (c)   Each Security  shall bear interest from and  commencing on its Issue
Date at such rate of interest as the Company shall  determine from time to time,
as set forth in the Prospectus. The interest rate of each Security will be fixed
for the term of such Security upon issuance,  subject to change upon the renewal
of the Security at maturity.  Interest on the Securities will not compound.  The
Company shall pay the Holders  interest on the Securities  quarterly on the last
day of each  quarter  during  which each such  Security is  outstanding.  To the
extent any applicable interest payment date is not a Business Day, then interest
shall be paid instead on the next succeeding Business Day.

      (d)   The  Company  will give each  Holder of a Security a written  notice
approximately  thirty (30) but not less than ten (10) days prior to the Maturity
Date of the Security held by such Holder  reminding  such Holder of the Maturity
Date of the  Security.  If the Company is offering  renewal of  Securities,  the
Company  will  provide  such Holder  with a schedule  of interest  rates then in
effect and a form for the Holder to use to notify the Company whether the Holder
wishes to renew the  Security.  To be  effective,  a notice of  renewal  must be
returned to the Company (or

                                        5

<PAGE>

its agent) not later than the Maturity Date of the maturing  Security.  Unless a
Security is properly  renewed,  no interest  will accrue after the Maturity Date
for such  Security.  If a Security is not  renewed,  the  Company  shall pay the
Holder the principal amount on the maturing Security,  together with accrued but
unpaid interest thereon, within ten (10) days after the Maturity Date.

      (e)   If the Company is offering renewal of Securities and a Holder renews
a Security,  then interest  shall  continue to accrue from the first day of such
renewal term at the applicable rate then in effect.  Such Security,  as renewed,
will continue in all its provisions, including provisions relating to payment.

      (f)   The  terms  and  provisions   contained  in  the  Securities   shall
constitute,  and are hereby  expressly made, a part of this Indenture and to the
extent applicable,  the Company and the Trustee, by their execution and delivery
of this Indenture, and the Holders by accepting the Securities,  expressly agree
to such terms and provisions and to be bound thereby. In case of a conflict, the
provisions of this Indenture shall control.

Section 2.2 Transaction Statement; Rescission.

      (a)   A Security shall not be validly issued until a written  confirmation
of the  acceptance  of a  Subscription  in the form of a  transaction  statement
executed  by a duly  authorized  officer or agent of the  Company is sent to the
purchaser  thereof and an Account is established by the Registrar in the name of
such purchaser or transferee.

      (b)   For a period of five (5) days following  delivery of a Prospectus to
a Holder in regard to issuance  of a Security at the time of original  purchase,
but not upon  transfer,  the Holder shall have the right to rescind the Security
and receive  payment of the  principal by  presenting  a written  request to the
Company.  Payment  of the  principal  shall be made  within ten (10) days of the
Company's  receipt of such request from the Holder. No interest shall be paid on
any such rescinded Security.

Section 2.3 Registrar and Paying Agent.

      The Trustee shall maintain (i) an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar") and (ii) an
office or agency where Securities may be presented for payment ("Paying Agent").
The Registrar  shall keep a register of the Securities and of their transfer and
exchange,  which  shall  include  the name,  address  for notices and payment of
principal  and interest to the Holder,  principal  amount and interest  rate for
each Security,  and such other information as the Company shall request that the
Registrar  maintain with regard to Holders or the  Securities  (the  "Securities
Register").  The Registrar  shall not be required to maintain any records beyond
those (i) specifically required by the terms of this Indenture,  (ii) reasonably
requested  in writing by the Company and (iii) and as are or become  required to
be maintained by applicable law.

Section 2.4 Deposit of Principal and Interest With Paying Agent.

      Prior to each  Payment  Date,  the Company  shall  deposit with the Paying
Agent  sufficient  funds to pay  principal  and interest  then  becoming due and
payable in cash.

                                        6

<PAGE>

Section 2.5 List of Holders.

      The  Trustee  shall  preserve  in as  current  a  form  as  is  reasonably
practicable  the most recent list  available to it of the names and addresses of
Holders and shall otherwise comply with TIA ss.312(a). If the Trustee is not the
Registrar,  the Registrar  shall furnish to the Trustee each quarter  during the
term of this  Indenture  and at such other  times as the  Trustee may request in
writing,  a list in such form and as of such date as the Trustee may  reasonably
require of the  names,  addresses  and  Account  balances  of  Holders,  and the
aggregate  principal  amount  outstanding and the Company shall otherwise comply
with TIA ss.312(a).

Section 2.6 Transfer and Exchange.

      (a)   The  Securities  are  not  negotiable   instruments  and  cannot  be
transferred  without the prior written  consent of the Company.  Requests to the
Registrar for the transfer of any Account maintained for the benefit of a Holder
shall be:

            (1)   made to the  Company  in  writing  on a form  supplied  by the
Company;

            (2)   duly  executed  by  the  current  holder  of the  Account,  as
reflected on the Registrar's  records as of the date of receipt of such transfer
request, or his attorney duly authorized in writing;

            (3)   accompanied  by the  written  consent  of the  Company  to the
transfer; and

            (4)   if requested by the  Company,  an opinion of Holder's  counsel
(which counsel shall be reasonably  acceptable to the Company) that the transfer
does not violate any applicable securities laws and/or a signature guarantee.

      (b)   Upon  transfer  of a  Security,  the  Company  will  provide the new
registered  owner  of the  Security  with a  transaction  statement  which  will
evidence the transfer of the Account in the Securities Register.

      (c)   The Company or the Trustee  may assess  service  charges to a Holder
for any  registration  or  transfer  or  exchange,  and the  Company may require
payment of a sum  sufficient  to cover any transfer tax or similar  governmental
charge  payable in connection  therewith  (other than any such transfer taxes or
similar  governmental  charge  payable  upon  exchange  pursuant  to Section 9.5
hereof).

      (d)   The Company  shall  treat the  individual  or entity  listed on each
Account  maintained  by the  Registrar  as the  absolute  owner of the  Security
represented thereby for purposes of receiving payments thereon and for all other
purposes whatsoever.

Section 2.7 Payment of Principal  and Interest;  Principal  and Interest  Rights
Preserved.

      (a)   Each Security  shall accrue  interest at the rate specified for such
Security in the  Securities  Register and such interest shall be payable on each
Payment Date  following  the Issue Date for such  Security,  until the principal
thereof has been paid. Any installment of interest payable on a Security that is
caused to be punctually paid or duly provided for by the Company

                                        7

<PAGE>

on the  applicable  Payment Date shall be paid by the Paying Agent to the Holder
in whose name such  Security is  registered  in the  Securities  Register on the
applicable  Regular Record Date with respect to the Securities  outstanding,  by
the Paying Agent mailing a check for the amount of such interest  payment to the
Holder's address as it appears in the Securities Register on such Regular Record
Date.  The Paying  Agent  shall not be  required  to make any payment or partial
payment  of  principal  if the Paying  Agent does not have funds on deposit  and
received from the Company in an amount  sufficient to pay Holders amounts due to
them on a Payment  Date,  but shall make full payments of interest to the extent
that sufficient  funds are on deposit to make such payments.  Any installment of
interest not punctually paid or duly provided for shall be payable in the manner
and to the Holders as specified in Section 2.13 hereof.

      (b)   Each of the Securities shall have stated  maturities of principal as
shall  be  indicated  on such  Securities  and as set  forth  in the  Securities
Register.  The  principal of each  Security and any accrued but unpaid  interest
thereon shall be paid in full no later than five (5) days following the Maturity
Date thereof  unless the term of such  Security is extended  pursuant to Section
2.1 hereof or such  Security  becomes  due and  payable  at an  earlier  date by
acceleration,  redemption  or  otherwise.  Notwithstanding  any of the foregoing
provisions  with  respect  to  payments  of  principal  of and  interest  on the
Securities,  if the  Securities  have  become or been  declared  due and payable
following an Event of Default, then payments of principal of and interest on the
Securities shall be made in accordance with Article 6 hereof.

      (c)   All  computations of interest due with respect to any Security shall
be made, unless otherwise specified in the Security, based upon a 365 day year.

      (d)   In the event that any check  mailed to a Holder  for the  purpose of
payment of  principal or interest is returned to the Paying Agent for want of an
accurate address or is not presented for payment,  the funds represented thereby
shall be held and disbursed as provided in Section 8.3 hereof.

      (e)   The Company or the Trustee may withhold from any payment of interest
amounts required by the Internal Revenue Service or other taxing authority to be
so withheld,  including,  without limitation,  upon the failure of any Holder to
provide the Company or the Trustee with his or her tax identification number.

Section 2.8 Reserved.

Section 2.9 Outstanding Securities.

      (a)   The Securities  outstanding at any time are the outstanding balances
of all Accounts  representing  the Securities  maintained by the Company or such
other entity as the Company designated as Registrar.

      (b)   If the  principal  amount of any Security is  considered  paid under
Section 4.1 hereof,  it ceases to be  outstanding  and  interest on it ceases to
accrue.

      (c)   Subject  to Section  2.10  hereof,  a Security  does not cease to be
outstanding  because  the  Company  or an  Affiliate  of the  Company  holds the
Security.

                                        8

<PAGE>

Section 2.10 Treasury Securities.

      In  determining  whether the holders of the required  principal  amount of
Securities have concurred in any direction,  waiver or consent, Securities owned
by the Company or any Affiliate of the Company shall be considered as though not
outstanding,  except that for purposes of determining  whether the Trustee shall
be  protected  in  relying  on any  such  direction,  waiver  or  consent,  only
Securities  that a Responsible  Officer of the Trustee  actually  knows to be so
owned shall be so disregarded.

Section 2.11 Reserved.

Section 2.12 Reserved.

Section 2.13 Defaulted Interest.

      If the  Company  defaults in a payment of  interest  or  principal  on any
Security,  it shall pay the defaulted  interest or principal plus, to the extent
lawful,  any interest  payable thereon at the rate provided in the Security,  to
the Holder of such Security as of a subsequent  special record date,  which date
shall be at the earliest practicable date, but in all events within fifteen (15)
days following the scheduled Payment Date of the defaulted interest. The Company
shall, with written  notification to the Trustee,  fix or cause to be fixed each
such special  record date and payment  date.  Prior to any such  special  record
date,  the  Company  (or the  Trustee,  in the name of and at the expense of the
Company)  shall mail to Holder(s) a notice that states the special  record date,
the related  payment date and the amount of principal,  interest and  additional
accrued interest to be paid.

Section 2.14 Book-Entry Registration.

      (a)   The Registrar shall maintain a book-entry  registration and transfer
system  through  the  establishment  of  Accounts  for the benefit of Holders of
Securities  as the sole  method of  recording  the  ownership  and  transfer  of
ownership  interests in such Securities.  The registered  owners of the Accounts
established by the Registrar in connection  with the purchase or transfer of the
Securities  shall be deemed to be the Holders of the Securities  outstanding for
all purposes under this  Indenture.  The Company shall promptly notify (or cause
an agent to notify) the Registrar of the acceptance of a  subscriber's  order to
purchase a Security and the Registrar  shall credit its book-entry  registration
and transfer  system to the Account of each  Security  purchaser,  the principal
amount of such Security owned of record by the purchaser.

      (b)   Book-entry accounts  representing  interests in the Securities shall
not be exchangeable  for Securities fully registered in the names of the Holders
thereof  unless (a) the Company at its option  advises the Trustee in writing of
its election to terminate the book-entry  system, or (b) after the occurrence of
any Event of Default,  Holders of a majority of the Securities then  outstanding
(as determined based upon the latest statement  provided to the Trustee pursuant
to Section 4.3(d) hereof) advise the Trustee in writing that the continuation of
the book-entry system is no longer in the best interests of such Holders and the
Trustee  notifies  all  Holders of the  Securities,  as the case may be, of such
event and the availability of definitive notes to the Holders of Securities,  as
the case may be, requesting such notes in definitive form.

                                        9

<PAGE>

      (c)   The Registrar shall issue fully registered Securities if required by
the  administrator of an Individual  Retirement  Account or similar tax deferred
account in which the Holder has acquired Securities.  The Registrar may charge a
Holder a $10 fee per Securities issuance.

Section 2.15 Initial and Periodic Statements.

      (a)   The Trustee shall provide an initial book entry  acknowledgement  to
initial  purchasers and registered  owners,  within thirty (30) business days of
the purchase, transfer or pledge of a Security.

      (b)   The  Trustee  shall  send  each  Holder  of  a  Security  (and  each
registered pledgee) via U.S. mail not later than ninety (90) Business Days after
each year end in which such Holder had an  outstanding  balance in such holder's
Account,  a statement  which indicates as of the year end preceding the mailing:
(i) the balance of such Account; (ii) interest credited; (iii) withdrawals made,
if any;  (iv) the  interest  rate  payable on such  Security;  and (v) any other
information  required on IRS Form 1099. The Trustee or the Company shall provide
additional  statements as the Holders of the Securities  may reasonably  request
from time to time. The Company or the Trustee may charge such Holders requesting
such  statements  a fee to cover the  charges  incurred  by the  Company  or the
Trustee in providing such additional statements.

                                  ARTICLE III.

                                   REDEMPTION

Section 3.1 Redemption of Securities at the Company's Election.

      (a)   At any  time  and  from  time to  time,  the  Company,  in its  sole
discretion,  may redeem any number or all of the Securities by providing  thirty
(30) days' written notice to the Holders thereof.  The Company may redeem any or
all of the  Securities  pursuant  to this  paragraph  and  need not  redeem  the
Securities  on a pro rata or other basis.  The Company shall provide the Holders
of any Securities to be redeemed pursuant to this paragraph with notice thereof,
which  notice  shall  set forth the date for such  redemption  (the  "Redemption
Date") and set forth the  Redemption  Price for the  Securities  to be redeemed.
Each such notice shall also  include the amount of interest and  principal to be
paid to the  Holder  on the  Redemption  Date.  No  interest  shall  accrue on a
Security to be redeemed  under this Section 3.1 for any period of time after the
Redemption Date for such Security, provided that the Company has timely tendered
the Redemption Price to the Holder.

      (b)   The  Company  shall have no  mandatory  redemption  or sinking  fund
obligations with respect to any of the Securities.

      (c)   In its sole  discretion,  the Company may offer certain  Holders the
ability to extend the maturity of an existing Security through the redemption of
the current Security and the issuance of a new Security.  This redemption option
shall not be subject to the thirty (30) day notice of  redemption  described  in
this section.

                                       10

<PAGE>

Section 3.2 Redemption of Securities at the Holder's Election.

      (a)   Subject to paragraph (b) below,  within  forty-five (45) days of the
death of a Holder who is a natural person,  the personal  representative  of the
estate of such Holder may  require  the  Company to redeem,  in whole and not in
part,  without penalty,  the Security held by such Holder,  by delivering to the
Company a certified  copy of the Holder's death  certificate  and an irrevocable
written  election (a "Redemption  Election")  requiring the Company to make such
redemption.  In the event a  Security  is held  jointly  by two or more  natural
persons  (including,  without  limitation,  joint  owners  that are not  legally
married), the Company shall redeem such Security upon proper notice if either of
joint Holders of such Security has died. If the Security is held by a Holder who
is not a natural  person,  such as a trust,  partnership,  corporation  or other
similar entity, the right of redemption upon death does not apply, except in the
case of the death of a natural person who is the beneficial  owner of Securities
held of record in an individual retirement account.

      (b)   The Company  will not be required to redeem  Securities  pursuant to
Redemption Elections received pursuant to paragraph (a) above to the extent that
such redemptions exceed $25,000 in the aggregate for all holders in any calendar
quarter.  For the  purposes  of such limit on  aggregate  Redemption  Elections,
Redemption  Elections will be honored in the order received,  and any Redemption
Election not paid in the quarter received due to this limitation will be honored
in the subsequent  quarter,  to the extent possible,  as such limit on aggregate
Redemption Elections will also apply to the subsequent quarter.

      (c)   Subject to Section  3.2(b),  upon receipt of a  Redemption  Election
pursuant to Section 3.2(a),  the Company shall designate the Redemption Date for
the Security to be  redeemed,  which  Redemption  Date shall be no more than ten
(10) days after the Company's receipt of the Redemption Election,  and shall pay
the  Redemption  Price  to the  estate  of the  Holder  in  accordance  with the
provisions  set forth in Section  2.7  hereof.  No  interest  shall  accrue on a
Security to be redeemed  under this Section 3.2 for any period of time after the
Redemption Date for such Security, provided that the Company has timely tendered
the  Redemption  Price  to  the  estate  of the  Holder.  Securities  for  which
redemption  is  delayed  pursuant  to Section  3.2(b)  will  continue  to accrue
interest  until the Company  establishes  a  Redemption  Date  therefor  and the
Security is redeemed.

      (d)   The  Company may at its option and in its sole  discretion  and from
time to time accept for redemption  Securities tendered to it by Holders and may
impose  such  conditions  thereon as it deems  appropriate,  including  an early
redemption penalty with regard thereto.

Section 3.3 Offer to Redeem Securities Upon Change of the Company's Advisor.

      (a)   If the Company terminates the Advisory Agreement for any reason, the
Company shall provide all Holders with a notice  thereof within ten (10) days of
such termination, pursuant to which the Company shall offer to redeem all of the
Securities  outstanding  as of the  date  of  the  termination  of the  Advisory
Agreement.  Each Holder shall have thirty (30) days from the date of such notice
to provide the Company with a Redemption  Election with regard to the Securities
owned by such  Holder,  upon timely  receipt of which the Company  shall  become
bound to

                                       11

<PAGE>

redeem the electing Holder's Securities. This Section 3.3 shall not apply in the
case that the Advisor terminates or elects not to renew the Advisory Agreement.

      (b)   Upon receipt of a Redemption  Election  pursuant to Section  3.3(a),
the  Company  shall  designate  the  Redemption  Date  for each  Security  to be
redeemed,  which  Redemption  Date shall be no more than ten (10) days after the
Company's receipt of the Redemption Election, and shall pay the Redemption Price
to the Holder in accordance with the provisions set forth in Section 2.7 hereof.
No interest shall accrue on a Security to be redeemed under this Section 3.3 for
any period of time after the Redemption  Date for such  Security,  provided that
the Company has timely tendered the Redemption Price to the Holder.

                                   ARTICLE IV.

                                    COVENANTS

Section 4.1 Payment of Securities.

      (a)   Principal and interest (to the extent such interest is paid in cash)
shall be considered  paid on the date due if the Paying Agent, if other than the
Company, holds at least one Business Day before that date money deposited by the
Company in immediately  available funds and designated for and sufficient to pay
all  principal  and  interest  then due.  Such Paying  Agent shall return to the
Company,  no later than five (5) days  following the date of payment,  any money
(including  accrued interest) that exceeds such amount of principal and interest
paid on the Securities in accordance with this Section 4.1.

      (b)   To the extent  lawful,  the Company  shall pay  interest  (including
Post-Petition  Interest in any proceeding  under any Bankruptcy  Law) on overdue
principal at the rate borne by the Securities;  it shall pay interest (including
Post-Petition  Interest in any proceeding  under any Bankruptcy  Law) on overdue
installments of interest  (without regard to any applicable grace period) at the
same rate.

Section 4.2 Maintenance of Office or Agency.

      (a)   The  Company  will  maintain  an office or agency  (which  may be an
office of the Trustee) where  Securities may be surrendered for  registration of
transfer  or  exchange  and where  notices and demands to or upon the Company in
respect of the  Securities  and this  Indenture may be served.  The Company will
give prompt written notice to the Trustee of the location, and any change in the
location,  of such office or agency.  If at any time the  Company  shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof,  such presentations,  surrenders,  notices and demands
may be made or served at the Corporate Trust Office of the Trustee.

      (b)   The Company may also from time to time  designate  one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such  purposes and may from time to time rescind such  designations.  The
Company will give prompt written  notice to the Trustee of any such  designation
or  rescission  and of any change in the  location  of any such other  office or
agency.

                                       12

<PAGE>

      (c)   The Company hereby designates its office as one such office of the
Company.

Section 4.3 SEC Reports and Other Reports.

      (a)   The Company  shall file with the Trustee,  within  fifteen (15) days
after filing with the SEC, copies of the annual reports and of the  information,
documents, and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations  prescribe) that the Company is required
to file with the SEC  pursuant to Sections 13 or 15(d) of the  Exchange  Act. If
the Company is not subject to the  requirements  of such Sections 13 or 15(d) of
the  Exchange  Act,  the  Company  shall  continue  to file with the SEC and the
Trustee on the same timely basis such reports,  information  and other documents
as it would file if it were subject to the  requirements of Sections 13 or 15(d)
of the  Exchange  Act.  The Company  shall also comply  with the  provisions  of
TIAss.314(a).  Notwithstanding  anything contrary herein, the Trustee shall have
no duty to review such documents for purposes of determining compliance with any
provisions of the Indenture.

      (b)   Upon the  request of any  Holder,  the Company  shall  provide  such
Holder  with a copy of the  Company's  annual  report on Form 10-K or  quarterly
reports on Form 10-Q without charge. The Company will not be required to provide
Holders with any other reports or financial information or to provide reports to
Holders absent a specific request therefor.

Section 4.4 Compliance Certificate.

      (a)   The Company shall deliver to the Trustee,  within one hundred twenty
(120) days after the end of each Fiscal Year, an Officer's  Certificate  stating
that a review of the activities of the Company during the preceding  fiscal year
has been made under the  supervision  of the signing  Officer(s)  with a view to
determining whether the Company has kept, observed,  performed and fulfilled its
obligations under this Indenture, and further stating that to the best of his or
her knowledge the Company has kept,  observed,  performed and fulfilled each and
every  covenant  contained  in  this  Indenture  and is not  in  default  in the
performance or observance of any of the terms,  provisions and conditions hereof
(or, if a Default or Event of Default shall have  occurred,  describing all such
Defaults  or Events of  Default of which he or she may have  knowledge  and what
action each is taking or proposes to take with respect  thereto) and that to the
best of his or her  knowledge  no event has occurred and remains in existence by
reason of which payments on account of the principal of or interest,  if any, on
the Securities  are  prohibited or if such event has occurred,  a description of
the  event and what  action  each is taking  or  proposes  to take with  respect
thereto. The foregoing Officer's  Certificate shall state whether the promissory
notes  constituting part of the Collateral are valid and binding  obligations of
the obligor  thereof and whether any such  promissory  note has  experienced  an
event of default thereon during the period covered by the Officer's Certificate.

      (b)   The Company will, so long as any of the Securities are  outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officer's  Certificate  specifying such Default or Event
of Default  and what  action  the  Company  is taking or  proposes  to take with
respect thereto.

                                       13

<PAGE>

Section 4.5 Stay, Extension and Usury Laws.

      The Company  covenants  (to the extent that it may lawfully do so) that it
will not at any time insist upon,  plead, or in any manner  whatsoever  claim or
take the benefit or  advantage  of, any stay,  extension  or usury law  wherever
enacted,  now or at any time hereafter in force,  which may affect the covenants
or the  performance  of this  Indenture.  The Company (to the extent that it may
lawfully do so) hereby  expressly  waives all  beneficial  advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and  permit  the  execution  of every  such power as though no such law has been
enacted.

Section 4.6 Liquidation.

      Neither the Board of Directors nor the  shareholders  of the Company shall
adopt a plan of liquidation that provides for,  contemplates or the effectuation
of which is preceded by (a) the sale, lease,  conveyance or other disposition of
all  or  substantially   all  of  the  assets  of  the  Company  otherwise  than
substantially  as an entirety  (Section 5.1 of this Indenture  being the Section
hereof  which  governs any such sale,  lease,  conveyance  or other  disposition
substantially  as an entirety) and (b) the  distribution of all or substantially
all of the proceeds of such sale, lease,  conveyance or other disposition and of
the  remaining  assets of the  Company to the  holders  of capital  stock of the
Company,  unless  the  Company,  prior to making  any  liquidating  distribution
pursuant to such plan,  makes  provision for the  satisfaction  of the Company's
Obligations  hereunder  and under the  Securities as to the payment of principal
and interest.

Section 4.7 Financial Covenants

      The  Company  covenants  that,  so  long  as  any of  the  Securities  are
outstanding:  (i) the Company will maintain a positive net worth, which includes
all equity  held by the  Company's  common and  preferred  shareholders  and the
Company's  subordinated  debt, and (ii) the Company's long term liabilities will
not exceed three hundred  percent of the Company's  shareholders'  equity at the
end of any fiscal year,  or such higher  amount as authorized by the Bylaws from
time to time.

Section 4.8 Restrictions on Dividends and Certain Transactions with Affiliates

      (a)   The Company  covenants  that, so long as any of the  Securities  are
outstanding, it shall not declare or pay any dividends or other payments of cash
or other property to its common or preferred  shareholders  unless no Default or
Event of Default  with  respect to the  Securities  then  exists or would  exist
immediately  following  the  declaration  or payment of such  dividend  or other
payment.

      (b)   The Company  covenants  that, so long as any of the  Securities  are
outstanding, it shall not guarantee,  endorse or otherwise become liable for any
obligations of any of the Company's Affiliates.

                                       14

<PAGE>

Section 4.9 Collateral

      (a)   The Company  shall from time to time  assign,  deliver and pledge to
the  Trustee,  as security  for the  payment of  principal  and  interest on the
Securities, mortgage-secured promissory notes or debt securities (including, but
not limited to church  bonds) issued by churches and other  nonprofit  religious
organizations  evidencing loans or investments  made by the Company,  or cash or
cash  equivalents,  which at all times shall have an aggregate  unpaid principal
balance of at least 100% of the outstanding  principal  amount of the Securities
(the "Collateral").  Except as described in Section 4.9(g), the Company will not
be obligated to assign the mortgages securing the Collateral to the Trustee.  If
any  of the  promissory  notes  or  debt  securities  constituting  part  of the
Collateral  shall be in default for in excess of ninety  (90) days,  the Company
shall provide  replacement  Collateral for such promissory note or debt security
sufficient  to maintain  such 100%  coverage  without  regard to such  defaulted
promissory note or debt security.  The Company shall deliver to the Trustee such
documents  as the  Trustee  deems  necessary  to create a  perfected  first lien
security  interest in the  Collateral  under the  applicable  provisions  of the
Uniform Commercial Code. If an Event of Default has occurred,  the Company shall
deliver to the Trustee such  documents as the Trustee deems  necessary to enable
the Trustee to exercise its remedies  with regard to the  Collateral,  including
those  necessary  for the Trustee to obtain  direct  payments  under the pledged
promissory  notes and church bonds or to sell or transfer such promissory  notes
and church bonds to third parties.

      (b)   At any time and from time to time,  upon the written  request of the
Trustee,  and at the sole expense of the Company,  the Company will promptly and
duly execute and deliver,  or will  promptly  cause to be executed or delivered,
such further  instruments  and  documents  and take such  further  action as the
Trustee may  reasonably  request for the purpose of obtaining or preserving  the
full benefits of Collateral,  including,  without limitation,  the filing of any
financing or continuation statements under the Uniform Commercial Code in effect
in any jurisdiction.  The Company also hereby authorizes the Trustee to file any
such financing or continuation statement without the signature of the Company to
the extent permitted by applicable law.

      (c)   The Company shall furnish the following to the Trustee in connection
with its pledge of the Collateral to the Trustee:

            (1)   Upon  delivery  of  Collateral,  an  Opinion of Counsel to the
effect  that all  necessary  action has been taken to create and perfect a first
lien and  security  interest in favor of the  Trustee in the pledged  promissory
notes, debt securities, cash or cash equivalents.

            (2)   A UCC-1 financing statement or equivalent recordable form.

            (3)   At least  annually,  an Opinion of Counsel to the effect  that
all  necessary  action  has been taken to  maintain  a first  lien and  security
interest in favor of the Trustee in the pledged promissory notes or stating that
no such action is necessary.

      (d)   In  connection  with  any  release  or  substitution  of  Collateral
assigned to the Trustee  under  Section  4.9(a),  the Company  will,  subject to
Section  4.9(e),  deliver to the Trustee  the  certificate  or opinion,  if any,
required by Section 314(d) of the Trust Indenture Act as to the fair

                                       15

<PAGE>

value of any  Collateral to be released,  dated as of a date not more than sixty
(60) calendar days prior to the date of release.

      (e)   Notwithstanding   anything   contained  in  this  Indenture  to  the
contrary,  the  provisions  of 4.9(d) will not be  applicable  to any release or
substitution  of  Collateral  provided  that the  release and  substitution  was
performed in or a result of changes in the Company's  properties  arising in the
ordinary  course of the Company's  business and the aggregate  unpaid  principal
balance of the Collateral after the release or substitution and giving effect to
additional Collateral assigned to the Trustee contemporaneously therewith was at
least 100% of the outstanding  principal  amount of the Securities.  The Company
will deliver to the Trustee  semi-annually an Officer's  Certificate  certifying
that all releases and  substitutions  of Collateral  pursuant to this  provision
during the  immediately  proceeding  six  months  were in  compliance  with this
subsection.

      (f)   The  Company  shall not change its name or  corporate  structure  or
change the  jurisdiction  under which it is  incorporated  or organized  without
first giving the Trustee at least thirty (30) days prior written  notice thereof
and shall have  delivered to the Trustee all Uniform  Commercial  Code financing
statements  and  amendments  thereto as the Trustee  shall request and taken all
other actions deemed  necessary by the Trustee to continue its perfected  status
in the Collateral with same or better priority.

      (g)   Upon the request of the Trustee where there is a continuing Event of
Default,  the Company  shall assign to the Trustee such  mortgages  securing the
promissory  notes  constituting  part of  Collateral  as are  identified  by the
Trustee, in its discretion.

      (h)   The Company  covenants  that, so long as any of the  Securities  are
outstanding,  the Company  will not  Transfer  any part of the  Collateral.  For
purposes  of this  subsection,  the term  "Transfer"  means a sale,  assignment,
transfer or other disposition  (whether voluntary or by operation of law) of, or
the granting or creating of a lien,  encumbrance or security interest in, any of
the Collateral;  provided,  that the term "Transfer" does not include (i) a sale
or disposition of any of the Collateral which is  contemporaneously  replaced by
other promissory notes, or debt securities, or cash or cash equivalents that are
otherwise  eligible  to  constitute  part of the  Collateral  and where the 100%
Collateral coverage  requirement is at all times met; or (ii) the creation of an
involuntary lien against the Collateral that is released or discharged of record
or otherwise remedied within sixty (60) days of creation.

Section 4.10 Appointment as Attorney-in-Fact.

      (a)   The Company hereby irrevocably  constitutes and appoints the Trustee
and any officer or agent thereof,  with full power of substitution,  as its true
and lawful  attorney-in-fact  with full  irrevocable  power and authority in the
place  and stead of the  Company  and in the name of the  Company  or in its own
name, from time to time in the Trustee's discretion, for the purpose of carrying
out the terms of this Indenture relating to the Collateral,  to take any and all
appropriate  action and to execute any and all documents and  instruments  which
may be necessary or desirable to  accomplish  the purposes of this  Indenture as
they relate to the  Collateral  and the Trustee's  rights and powers with regard
thereto;  provided  that  Trustee  hereby  agrees that it shall not exercise its
rights as  attorney-in-fact  unless an Event of  Default  shall  have

                                       16

<PAGE>

occurred.  Without limiting the generality of the foregoing,  the Company hereby
gives the Trustee the power and right, on behalf of the Company,  without assent
by, but with notice to, the Company,  if an Event of Default shall have occurred
and be continuing, to do the following:

            (1)   in the name of the Company or its own name, or  otherwise,  to
take  possession  of  and  endorse  and  collect  any  checks,   drafts,  notes,
acceptances  or other  instruments  for the  payment  of  moneys  due  under any
mortgage insurance or church bond or with respect to any other Collateral and to
file any claim or to take any other action or  proceeding in any court of law or
equity or  otherwise  deemed  appropriate  by the  Trustee  for the  purpose  of
collecting  any and all such  moneys due under any such  mortgage  insurance  or
church bond or with respect to any other Collateral whenever payable;

            (2)   to pay or  discharge  taxes and  liens  levied or placed on or
threatened against the Collateral;

            (3)   (A) to  direct  any party  liable  for any  payment  under any
Collateral to make payment of any and all moneys due or to become due thereunder
directly  to the Trustee or as the Trustee  shall  direct;  (B) to ask or demand
for, collect, receive payment of and receipt for, any and all moneys, claims and
other  amounts  due or to become due at any time in respect of or arising out of
any   Collateral;   (C)  to  sign  and   endorse  any   invoices,   assignments,
verifications,  notices  and  other  documents  in  connection  with  any of the
Collateral;  (D) to commence and prosecute any suits,  actions or proceedings at
law or in  equity  in  any  court  of  competent  jurisdiction  to  collect  the
Collateral  or any  thereof  and to  enforce  any other  right in respect of any
Collateral;  (E) to defend any suit,  action or proceeding  brought  against the
Company with respect to any Collateral;  (F) to settle, compromise or adjust any
suit,  action or  proceeding  described  in clause (E) above and, in  connection
therewith,  to  give  such  discharges  or  releases  as the  Trustee  may  deem
appropriate; and (G) generally, to sell, transfer, pledge and make any agreement
with  respect  to or  otherwise  deal  with any of the  Collateral  as fully and
completely  as though  the  Trustee  were the  absolute  owner  thereof  for all
purposes,  and to do, at the Trustee's option and the Company's expense,  at any
time,  and from  time to time,  all acts and  things  which  the  Trustee  deems
necessary to protect,  preserve or realize upon the Collateral and the Trustee's
liens thereon and to effect the intent of this Loan Agreement,  all as fully and
effectively as the Company might do; and

            (4)   to  execute  in the  name and file on  behalf  of the  Company
assignments of mortgages  securing the  promissory  notes  constituting  part of
Collateral where there is a continuing Event of Default.

      The Company hereby  ratifies all that said attorneys  shall lawfully do or
cause to be done by virtue  hereof.  This power of attorney  is a power  coupled
with an interest and shall be irrevocable.

      (b)   The Company also  authorizes the Trustee,  at any time and from time
to time,  to execute  any  endorsements,  assignments  or other  instruments  of
conveyance or transfer with respect to the Collateral.

                                       17

<PAGE>

      (c)   The powers  conferred  on the  Trustee  are  solely to  protect  the
Trustee's  interests  in the  Collateral  and shall not impose any duty upon the
Trustee to exercise any such powers.  The Trustee shall be accountable  only for
amounts  that it actually  receives as a result of the  exercise of such powers,
and neither the Trustee nor any of its officers,  directors,  or employees shall
be responsible  to the Company for any act or failure to act  hereunder,  except
for its own gross negligence or willful misconduct.

                                   ARTICLE V.

                                   SUCCESSORS

Section 5.1 When the Company May Merge, etc.

      (a)   The Company may not  consolidate  or merge with or into  (whether or
not the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise  dispose of all or  substantially  all of its  properties or
assets in one or more related  transactions  to another  corporation,  Person or
entity unless (i) the Company is the surviving  corporation or the entity or the
Person  formed by or surviving any such  consolidation  or merger (if other than
the Company) or to which such sale, assignment,  transfer,  lease, conveyance or
other  disposition  shall have been made is a corporation  organized or existing
under the laws of the  United  States,  any state  thereof  or the  District  of
Columbia;   (ii)  the  entity  or  Person   formed  by  or  surviving  any  such
consolidation  or merger (if other than the  Company) or the entity or Person to
which such sale, assignment,  transfer,  lease,  conveyance or other disposition
will have been made assumes all the  obligations of the Company by execution and
delivery of a supplemental  indenture in a form  reasonably  satisfactory to the
Trustee;  and (iii)  immediately  after such  transaction no Default or Event of
Default exists.

      (b)   The Company shall  deliver to the Trustee prior to the  consummation
of the proposed transaction an Officer's Certificate to the foregoing effect and
an  Opinion  of  Counsel   stating  that  the  proposed   transaction  and  such
supplemental indenture comply with this Indenture. The Trustee shall be entitled
to conclusively rely upon such Officer's Certificate and Opinion of Counsel.

Section 5.2 Successor Corporation Substituted.

      Upon any consolidation or merger, or any sale, lease,  conveyance or other
disposition  of  all  or  substantially  all of the  assets  of the  Company  in
accordance  with  Section  5.1,  the  successor   corporation   formed  by  such
consolidation  or into or with  which the  Company,  is merged or to which  such
sale,  lease,  conveyance or other  disposition is made shall succeed to, and be
substituted  for, and may exercise  every right and power of, the Company  under
this Indenture  with the same effect as if such successor  Person has been named
as the Company herein; provided, however, that the Company shall not be released
or  discharged  from the  obligation  to pay the principal of or interest on the
Securities.

                                       18

<PAGE>

                                   ARTICLE VI.

                              DEFAULTS AND REMEDIES

Section 6.1 Events of Default.

      An "Event of Default" occurs if:

      (a)   the Company  defaults in the payment of interest on a Security  when
the same  becomes  due and payable  and the  Default  continues  for a period of
thirty (30) days;

      (b)   the Company defaults in the payment of the principal of any Security
when the same becomes due and payable at maturity, upon a required redemption or
otherwise, and the Default continues for a period of thirty (30) days;

      (c)   the Company fails to observe or perform any  covenant,  condition or
agreement  on the part of the Company to be observed  or  performed  pursuant to
Section 4.6 or 5.1 hereof;

      (d)   the Company  defaults in its obligations  described in clause (b) or
(c) of Section 4.9 and such default continues for a period of sixty (60) days;

      (e)   the  Company  fails to comply  with any of its other  agreements  or
covenants in, or provisions of, the Securities or this Indenture and the Default
continues for the period and after the notice specified below;

      (f)   the Company  pursuant to or within the meaning of any Bankruptcy Law
(i)  commences  a  voluntary  case;  (ii)  consents to the entry of an order for
relief against it in an involuntary case; (iii) consents to the appointment of a
Custodian of it or for all or  substantially  all of its property;  (iv) makes a
general  assignment for the benefit of its  creditors;  or (v) admits in writing
its inability to pay debts as the same become due; or

      (g)   a court of  competent  jurisdiction  enters an order or decree under
any  Bankruptcy Law that (i) is for relief against the Company in an involuntary
case; (ii) appoints a Custodian of the Company or for all or  substantially  all
of its property;  (iii) orders the liquidation of the Company,  and the order or
decree remains  unstayed and in effect for one hundred twenty (120)  consecutive
days.

      The   term  "Bankruptcy  Law" means  Title 11,  U.S.  Code or any  similar
Federal or state law for the relief of debtors.  The term "Custodian"  means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.

      A Default  under clause (e) of this Section 6.1 is not an Event of Default
until the Trustee or the Holders of at least a majority in  principal  amount of
the then  outstanding  Securities  notify  the  Company of the  Default  and the
Company  does not cure the Default or such Default is not waived  within  thirty
(30) days after  receipt of the  notice.  The notice must  specify the  Default,
demand that it be remedied and state that the notice is a "Notice of Default."

                                       19

<PAGE>

Section 6.2 Acceleration.

      If an Event of  Default  (other  than an Event  of  Default  specified  in
clauses  (f) or (g) of Section  6.1)  occurs and is  continuing,  the Trustee by
notice to the Company or the Holders of at least a majority in principal  amount
of the then  outstanding  Securities  by written  notice to the  Company and the
Trustee may declare the unpaid  principal of and any accrued interest on all the
Securities  to be due and  payable.  Upon such  declaration  the  principal  and
interest shall be due and payable immediately.  If an Event of Default specified
in clause  (f) or (g) of Section  6.1  occurs,  such an amount  shall ipso facto
become and be immediately  due and payable  without any declaration or other act
on the part of the  Trustee or any  Holder.  The  Trustee,  or the  Holders of a
majority  in  principal  amount of the then  outstanding  Securities  by written
notice to the Trustee,  may rescind an acceleration  and its consequences if the
rescission  would not  conflict  with any judgment or decree and if all existing
Events of Default  (except  nonpayment  of principal or interest that has become
due solely because of the acceleration) have been cured or waived.

Section 6.3 Other Remedies.

      (a)   If an Event of Default  occurs and is  continuing,  the  Trustee may
pursue any  available  remedy to collect the payment of principal or interest on
the Securities or to enforce the  performance of any provision of the Securities
or this  Indenture,  including,  without  limitations,  all rights and  remedies
available to a secured party under the Uniform  Commercial Code. The Trustee may
maintain a proceeding  even if it does not possess any of the Securities or does
not produce any of them in the  proceeding.  Without  limiting the generality of
the  foregoing,  the Trustee  without  demand of  performance  or other  demand,
presentment,  protest,  advertisement  or notice of any kind  (except any notice
required by law  referred  to below) to or upon the Company or any other  Person
(each  and all of which  demands,  presentments,  protests,  advertisements  and
notices  are  hereby  waived),  may in  such  circumstances  forthwith  collect,
receive,  appropriate  and realize  upon the  Collateral,  or any part  thereof,
and/or may forthwith sell, lease, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing),  in one or more parcels or as an entirety at public
or  private  sale or sales,  at any  exchange,  broker's  board or office of the
Trustee or elsewhere upon such terms and conditions as it may deem advisable and
at such prices as it may deem best, for cash or on credit or for future delivery
without assumption of any credit risk. The Trustee shall have the right upon any
such public sale or sales,  and, to the extent  permitted by law,  upon any such
private sale or sales,  to purchase the whole or any part of the  Collateral  so
sold,  free of any right or equity of redemption in the Company,  which right or
equity  is  hereby  waived or  released.  The  Company  further  agrees,  at the
Trustee's  request,  to assemble  the  Collateral  and make it  available to the
Trustee at places  which the Trustee  shall  reasonably  select,  whether at the
Company's  premises  or  elsewhere.  If any notice of a  proposed  sale or other
disposition of Collateral  shall be required by law, such notice shall be deemed
reasonable  and proper if given at least ten (10) days before such sale or other
disposition.

      (b)   A delay or omission by the Trustee or any Holder in  exercising  any
right or remedy  accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or  acquiescence  in the Event of Default.  All
remedies are cumulative to the extent permitted by law.

                                       20

<PAGE>

Section 6.4 Waiver of Past Defaults.

      The  Trustee  may waive any past  Default or Event of Default  without the
consent of the Holders, provided that such Default is wholly cured. Holders of a
majority in principal amount of the then outstanding Securities by notice to the
Trustee may waive an existing Default or Event of Default and its  consequences,
and a continuing  Default or Event of Default in the payment of the principal of
or interest on any Security held by a  non-consenting  Holder may also be waived
upon the consent of the Holders of at least a majority of the  principal  amount
of the then  outstanding  Securities.  Upon actual receipt of any such notice of
waiver by a  Responsible  Officer of the Trustee,  such  Default  shall cease to
exist,  and any Event of Default arising  therefrom shall be deemed to have been
cured for every  purpose of this  Indenture;  but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereon.

Section 6.5 Control by Majority.

      The  Holders of a majority  in  principal  amount of the then  outstanding
Securities  may direct the time,  method and place of conducting  any proceeding
for any  remedy  available  to the  Trustee  or  exercising  any  trust or power
conferred on it,  provided,  that  indemnification  for the  Trustee's  fees and
expenses,  in a form  reasonably  satisfactory  to the Trustee,  shall have been
provided. However, the Trustee may refuse to follow any direction that conflicts
with  law  or  this  Indenture,  that  the  Trustee  determines  may  be  unduly
prejudicial to the rights of other  Holders,  or that may involve the Trustee in
personal liability.

Section 6.6 Limitation on Suits.

      A Holder  may  pursue a  remedy  with  respect  to this  Indenture  or the
Securities only if:

      (a)   the Holder gives to the Trustee written notice of a continuing Event
of Default;

      (b)   the Holders of at least a majority in  principal  amount of the then
outstanding  Securities  make a written  request  to the  Trustee  to pursue the
remedy;

      (c)   such  Holder or Holders  offer  and,  if  requested,  provide to the
Trustee  indemnity  satisfactory to the Trustee  against any loss,  liability or
expense;

      (d)   the Trustee does not comply with the request  within sixty (60) days
after receipt of the request and the offer and, if  requested,  the provision of
indemnity; and

      (e)   during  such  sixty (60) day  period  the  Holders of a majority  in
principal  amount of the then  outstanding  Securities do not give the Trustee a
direction inconsistent with the request.

      A Holder may not use this  Indenture  to  prejudice  the rights of another
Holder or to obtain a preference or priority over another Holder.

Section 6.7 Rights of Holders to Receive Payment.

      Except as  provided  in this  Indenture,  the  right  of any  Holder  of a
Security to receive  payment of principal  and interest on the  Security,  on or
after the respective due dates expressed

                                       21

<PAGE>

in the Security,  or to bring suit for the enforcement of any such payment on or
after such  respective  dates,  shall not be impaired  or  affected  without the
consent of the Holder.

Section 6.8 Collection Suit by Trustee.

      If an Event of Default  specified  in Section  6.1(a) or (b) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee  of an  express  trust  against  the  Company  for the  whole  amount of
principal  and  interest  remaining  unpaid on the  Securities  and  interest on
overdue principal and, to the extent lawful, interest and such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable  compensation,  expenses,  disbursements and advances of the Trustee,
its agents and counsel.

Section 6.9 Trustee May File Proofs of Claim.

      The Trustee is authorized to file such proofs of claim and other papers or
documents  as may be  necessary  or advisable in order to have the claims of the
Trustee  (including  any  claim  for  the  reasonable  compensation,   expenses,
disbursements  and  advances of the  Trustee,  its agents and  counsel)  and the
Holders  allowed in any  judicial  proceedings  relative  to the Company (or any
other obligor upon the  Securities),  its creditors or its property and shall be
entitled and  empowered to collect,  receive and  distribute  any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee,  and in the event that the Trustee  shall  consent to the making of
such payments  directly to the Holders,  to pay to the Trustee any amount due to
it for the reasonable compensation,  expenses, disbursements and advances of the
Trustee,  its agents and counsel,  and any other  amounts due the Trustee  under
Section  7.7 hereof.  To the extent  that the payment of any such  compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other  amounts due the Trustee under Section 7.7 hereof out of the estate in
any such proceeding,  shall be denied for any reason,  payment of the same shall
be secured  by a lien on,  and shall be paid out of, any and all  distributions,
dividends,  money,  securities  and other  properties  which the  Holders of the
Securities may be entitled to receive in such proceeding  whether in liquidation
or under any plan of reorganization or arrangement or otherwise.  Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or  composition  affecting the Securities or the rights of any Holder
thereof,  or to  authorize  the  Trustee  to vote in respect of the claim of any
Holder in any such proceeding.

Section 6.10 Priorities.

      If the Trustee  collects  any money  pursuant to this  Article,  it shall,
subject  to the  provisions  of  Article  10  hereof,  pay out the  money in the
following order:

      (a)   First:  to the  Trustee,  its agents and  attorneys  for amounts due
under  Section  7.7,  including  payment  of  all  compensation,   expenses  and
liabilities  incurred,  and all  advances  made,  if any, by the Trustee and the
costs and expenses of collection;

                                       22

<PAGE>

      (b)   Second:  to Holders for amounts due and unpaid on the Securities for
principal, ratably, without preference or priority of any kind, according to the
amounts due and payable on the Securities for principal;

      (c)   Third:  to Holders  for  amounts  due and  unpaid on the  Securities
interest,  ratably, without preference or priority of any kind, according to the
amounts due and payable on the Securities for interest; and

      (d)   Fourth:  to the  Company  or to such  party as a court of  competent
jurisdiction shall direct.

      The   Trustee may fix a record  date and  payment  date for any payment to
Holders.

Section 6.11 Undertaking for Costs.

      In any  suit  for the  enforcement  of any  right  or  remedy  under  this
Indenture  or in any suit against the Trustee for any action taken or omitted by
it as a Trustee,  a court in its  discretion may require the filing by any party
litigant  in the suit of an  undertaking  to pay the costs of the suit,  and the
court in its  discretion  may  assess  reasonable  costs,  including  reasonable
attorneys'  fees,  against any party litigant in the suit,  having due regard to
the merits and good faith of the claims or defenses made by the party  litigant.
This  Section  does  not  apply  to a suit by the  Trustee,  a suit by a  Holder
pursuant  to Section  6.7,  or a suit by  Holders of more than 10% in  principal
amount of the then outstanding Securities.

                                  ARTICLE VII.

                                     TRUSTEE

Section 7.1 Duties of Trustee.

      (a)   If an Event of Default has occurred and is  continuing,  the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a reasonably prudent
person would  exercise or use under the  circumstances  in the conduct of his or
her own affairs.

      (b)   Except during the continuance of an Event of Default:

            (1)   The duties of the Trustee  shall be  determined  solely by the
express  provisions  of this  Indenture  and the Trustee need perform only those
duties that are specifically  set forth in this Indenture and no others,  and no
implied  covenants or obligations  shall be read into this Indenture against the
Trustee.

            (2)   In the  absence  of bad faith on its  part,  the  Trustee  may
conclusively  rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon resolutions,  statements,  reports,  documents,
orders, certificates, opinions or other instruments furnished to the Trustee and
conforming to the requirements of this Indenture. However, in the case of any of
the above that are specifically required to be furnished to the Trustee pursuant
to

                                       23

<PAGE>

this  Indenture,  the Trustee  shall  examine  them to  determine  whether  they
substantially conform to the requirements of this Indenture.

      (c)   The  Trustee  may  not be  relieved  from  liabilities  for  its own
negligent  action,  its  own  negligent  failure  to  act,  or its  own  willful
misconduct, except that:

            (1)   This   paragraph  does  not  limit  the  effect  of  paragraph
7.1(b)(2) of this Section.

            (2)   The Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.

            (3)   The Trustee  shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction  received by
it pursuant to Section 6.5.

      (d)   Whether or not therein  expressly  so provided,  every  provision of
this  Indenture  that in any way relates to the Trustee is subject to paragraphs
(a), (b) and (c) of this Section.

      (e)   No provision of this  Indenture  shall require the Trustee to expend
or risk its own funds or incur any liability.  The Trustee may refuse to perform
any  duty  or  exercise  any  right  or  power  unless  it  receives   indemnity
satisfactory to it against any loss, liability or expense.

      (f)   The Trustee  shall not be liable for interest on any money  received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the  Trustee  need not be  segregated  from other  funds  except to the
extent required by law.

Section 7.2 Rights of Trustee.

      (a)   The Trustee may conclusively  rely upon any document  believed by it
to be genuine and to have been signed or presented  to it by the proper  Person.
The Trustee need not investigate any fact or matter stated in the document.  The
Trustee  shall  have no duty to inquire as to the  performance  of the  Issuers'
covenants  in Article 4. In  addition,  the Trustee  shall not be deemed to have
knowledge of any Default or any Event of Default  except any Default or Event of
Default  of which the  Trustee  shall  have  received  written  notification  or
obtained actual knowledge.

      (b)   Before the Trustee acts or refrains  from acting,  it may require an
Officer's Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable  for any action it takes or omits to take in good  faith in  reliance  on
such Officer's  Certificate or Opinion of Counsel.  The Trustee may consult with
counsel and the written  advice of such counsel or any Opinion of Counsel  shall
be full and complete  authorization  and protection from liability in respect of
any action  taken,  suffered  or omitted  by it  hereunder  in good faith and in
reliance thereon.

      (c)   The  Trustee  may  act  through  agents,  attorneys,  custodians  or
nominees and shall not be  responsible  for the  misconduct or negligence or the
supervision  of any agents,  attorneys,  custodians or nominees  appointed by it
with due care.

                                       24

<PAGE>

      (d)   The Trustee  shall not be liable for any action it takes or omits to
take in good faith which it believes  to be  authorized  or within the rights or
powers conferred upon it by this Indenture.

      (e)   Unless  otherwise  specifically  provided  in  this  Indenture,  any
demand,  request,  direction or notice from the Company  shall be  sufficient if
signed by an Officer of the Company.

      (f)   The  Trustee  shall  not be  deemed  to have  notice  of an Event of
Default for any purpose under this  Indenture  unless  notified of such Event of
Default by the Company or a Holder of the Securities.

Section 7.3 Individual Rights of Trustee.

      The Trustee in its  individual or any other  capacity may become the owner
or pledgee of Securities and may otherwise deal with the Company or an Affiliate
of the Company  with the same rights it would have if it were not  Trustee.  Any
Agent may do the same with like  rights.  However,  the  Trustee  is  subject to
Sections 7.10 and 7.11.

Section 7.4 Trustee's Disclaimer.

      The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this  Indenture or the  Securities.  It shall not be
accountable  for the Company's  use of the proceeds  from the  Securities or any
money paid to the Company or upon the  Company's  direction  under any provision
hereof.  It shall not be responsible  for any statement or recital herein or any
statement in the Securities or any other document in connection with the sale of
the  Securities  or pursuant to this  Indenture  other than its  certificate  of
authentication.

Section 7.5 Notice of Defaults.

      If a Default or Event of Default  occurs  and is  continuing  and if it is
known to a Responsible Officer of the Trustee, the Trustee shall mail to Holders
at their  addresses  as they appear in the  Securities  Register a notice of the
Default or Event of  Default  within  ninety  (90) days after it occurs or first
becomes  known to the  Trustee.  At least  five (5)  Business  Days prior to the
mailing of any notice to Holders  under this  Section  7.5,  the  Trustee  shall
provide the Company with notice of its intent to mail such notice. Except in the
case of a Default or Event of Default in payment on any  Security,  the  Trustee
may withhold the notice if and so long as the Responsible Officer of the Trustee
in good faith  determines  that  withholding  the notice  would have no material
adverse effect on the Holders.

Section 7.6 Reports by Trustee to Holders.

      (a)   Within  sixty (60) days after  December  31 of each  calendar  year,
commencing  December 31, 2008,  the Trustee shall mail to Holders a brief report
dated as of such  reporting  date that  complies  with TIA ss. 313(a) (but if no
event  described in TIA ss. 313(a) has occurred  within the 12 months  preceding
the reporting date, no report need be prepared or transmitted). The Trustee also
shall comply with TIA ss.  313(b).  The Trustee  shall also transmit by mail all
reports as required by TIA ss. 313(c).

                                       25

<PAGE>

      (b)   Commencing at the time this Indenture is qualified  under the TIA, a
copy of each report mailed to Holders under this Section 7.6 (at the time of its
mailing to Holders) shall be filed with the SEC and each stock exchange, if any,
on which the  Securities  are listed.  The  Company  shall  promptly  notify the
Trustee if and when the Securities are listed on any stock exchange.

Section 7.7 Compensation and Indemnity.

      (a)   The Company  shall pay to the Trustee  from time to time  reasonable
compensation  for its  acceptance of this  Indenture and its  performance of the
duties and services required hereunder.  The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall   reimburse  the  Trustee   promptly  upon  request  for  all   reasonable
disbursements,  advances and expenses  incurred or made by it in addition to the
compensation  for its  services.  Such  expenses  shall  include the  reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.

      (b)   The Company shall  indemnify the Trustee against any and all losses,
liabilities or expenses  incurred by it arising out of or in connection with the
acceptance or administration  of its duties under this Indenture,  except as set
forth in paragraph 7.7(d) hereof.  The Trustee shall notify the Company promptly
of any claim for  which it may seek  indemnity.  Failure  by the  Trustee  to so
notify the Company shall not relieve the Company of its  obligations  hereunder,
except to the extent the Company is prejudiced thereby. The Company shall defend
the claim and the  Trustee  shall  reasonably  cooperate  in such  defense.  The
Trustee may have separate  counsel and the Company shall pay the reasonable fees
and expenses of such counsel.  The Company need not pay for any settlement  made
without its consent, which consent shall not be unreasonably withheld.

      (c)   The  obligations of the Company under this Section 7.7 shall survive
the satisfaction and discharge of this Indenture.

      (d)   The Company need not reimburse any expense or indemnify  against any
loss or  liability  incurred by the Trustee  through its own  negligence  or bad
faith.

      (e)   To secure the Company's  payment  obligations  in this Section,  the
Trustee shall have a lien prior to the  Securities on all money or property held
or  collected  by the Trustee,  except that held in trust to pay  principal  and
interest  on a  Payment  Date  scheduled  to occur  within  ten (10) days of the
Trustee's   intended  exercise  of  such  lien.  Such  lien  shall  survive  the
satisfaction  and  discharge of this  Indenture.  The Trustee  shall provide the
Company with notice of its exercise of the lien provided for herein concurrently
with its exercise of such lien.

      (f)   When the Trustee incurs expenses or renders  services after an Event
of Default  specified  in Section  6.1(e) or (f) occurs,  the  expenses  and the
compensation   for  the  services  are  intended  to   constitute   expenses  of
administration under any Bankruptcy Law.

                                       26

<PAGE>

Section 7.8 Replacement of Trustee.

      (a)   A  resignation  or  removal  of the  Trustee  and  appointment  of a
successor  Trustee  shall become  effective  only upon the  successor  Trustee's
acceptance of appointment as provided in this Section 7.8.

      (b)   Upon appointment of a successor Trustee,  the Trustee may resign and
be discharged  from the trust hereby  created by so notifying  the Company.  The
Holders of a majority in principal amount of the then outstanding Securities may
remove the Trustee by so notifying  the Trustee and the Company in writing.  The
Company may remove the Trustee if:

            (1)   the Trustee fails to comply with Section 7.10;

            (2)   the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;

            (3)   a Custodian or public  officer  takes charge of the Trustee or
its property;

            (4)   the Trustee becomes  incapable of acting as Trustee under this
Indenture; or

            (5)   the Company so elects,  provided such  replacement  Trustee is
qualified and reasonably acceptable.

      (c)   If the Trustee  resigns or is removed or if a vacancy  exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.

      (d)   If a successor  Trustee does not take office within thirty (30) days
after  notice  that the  Trustee  has been  removed,  the  Company may appoint a
successor Trustee.

      (e)   If the Trustee after  written  request by any Holder fails to comply
with Section 7.10, such Holder may petition any court of competent  jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.

      (f)   A  successor  Trustee  shall  deliver  a written  acceptance  of its
appointment  to  the  retiring  Trustee  and  to  the  Company.   Thereupon  the
resignation or removal of the retiring Trustee shall become  effective,  and the
successor  Trustee  shall have all the rights,  powers and duties of the Trustee
under  this  Indenture.  The  successor  Trustee  shall  mail  a  notice  of its
succession  to all Holders.  The retiring  Trustee shall  promptly  transfer all
property held by it as Trustee to the successor Trustee, provided all sums owing
to the Trustee  hereunder have been paid and subject to the lien provided for in
Section 7.7. Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Company's  obligations  under Section 7.7 hereof shall continue for the
benefit of the retiring Trustee.

Section 7.9 Successor Trustee by Merger, etc.

      If the Trustee consolidates,  merges or converts into, or transfers all or
substantially all of its corporate trust business to, another  corporation,  the
successor  corporation  without any further

                                       27

<PAGE>

act shall be the successor  Trustee.  The Trustee  shall  provide  notice of any
event  described in this Section to the Company prior to or as soon as practical
after the occurrence thereof.

Section 7.10 Eligibility; Disqualification.

      (a)   There  shall at all times be a Trustee  hereunder  which  shall be a
corporation  or  association  organized and doing business under the laws of the
United States of America or of any state or territory thereof or of the District
of Columbia  authorized  under such laws to exercise  corporate  trustee  power,
shall be subject to supervision or examination by Federal, state, territorial or
District of Columbia  authority and shall have a combined capital and surplus of
at least  $5,000,000 as set forth in its most recent  published annual report of
condition.

      (b)   This  Indenture  shall  always  have a  Trustee  who  satisfies  the
requirements  of TIAss.  310(a)(1)  and (2).  The  Trustee  is subject to TIAss.
310(b).

Section 7.11 Preferential Collection of Claims Against Company.

      The  Trustee  is  subject  to  TIA  ss.  311(a),  excluding  any  creditor
relationship  listed in TIA ss.  311(b).  A  Trustee  who has  resigned  or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.

                                  ARTICLE VIII.

                             DISCHARGE OF INDENTURE

Section 8.1 Termination of Company's Obligations.

      (a)   This Indenture  shall cease to be of further effect (except that the
Company's  obligations under Sections 7.7 and 8.4, and the Company's,  Trustee's
and  Paying  Agent's  obligations  under  Section  8.3 shall  survive)  when all
outstanding  Securities have been paid in full and the Company has paid all sums
payable by the Company hereunder.  In addition, the Company may terminate all of
its obligations under this Indenture if:

            (1)   the Company irrevocably  deposits in trust with the Trustee or
at the option of the  Trustee,  with a trustee  reasonably  satisfactory  to the
Trustee and the Company  under the terms of an  irrevocable  trust  agreement in
form  and  substance  satisfactory  to the  Trustee,  money  or U.S.  Government
Obligations  sufficient  to pay  principal  and  interest on the  Securities  to
maturity or redemption, as the case may be, and to pay all other sums payable by
it hereunder,  provided that (i) the trustee of the irrevocable trust shall have
been  irrevocably  instructed  to pay such  money or the  proceeds  of such U.S.
Government  Obligations  to the  Trustee  and (ii) the  Trustee  shall have been
irrevocably  instructed  to  apply  such  money  or the  proceeds  of such  U.S.
Government  Obligations  to the  payment of said  principal  and  interest  with
respect to the Securities;

            (2)   the Company  delivers to the Trustee an Officer's  Certificate
stating that all  conditions  precedent to  satisfaction  and  discharge of this
Indenture have been complied with; and

                                       28

<PAGE>

            (3)   no Event of Default or event  (including  such deposit) which,
with notice or lapse of time,  or both,  would  become an Event of Default  with
respect to the  Securities  shall have occurred and be continuing on the date of
such deposit.

Then,  this Indenture shall cease to be of further effect (except as provided in
this paragraph), and the Trustee, on demand of the Company, shall execute proper
instruments  acknowledging  confirmation  of and discharge under this Indenture.
The Company may make the deposit only if Article X hereof does not prohibit such
payment.  However,  the party's obligations in Sections 2.3, 2.4, 2.5, 2.6, 2.7,
4.1, 4.2, 4.3, 7.7, 7.8, 8.3 and 8.4 shall survive until the  Securities  are no
longer outstanding.  Thereafter,  only the Company's obligations in Sections 7.7
and 8.4 and the Company's,  Trustee's and Paying Agent's  obligations in Section
8.3 shall survive.

      (b)   After such irrevocable deposit made pursuant to this Section 8.1 and
satisfaction of the other conditions set forth herein,  the Trustee upon written
request shall acknowledge in writing the discharge of the Company's  obligations
under this Indenture except for those surviving obligations specified above.

      (c)   In order to have money  available on a payment date to pay principal
or interest on the Securities,  the U.S. Government Obligations shall be payable
as to  principal  or interest at least one Business Day before such payment date
in such amounts as will provide the necessary money. U.S. Government Obligations
shall not be callable at the issuer's option.

Section 8.2 Application of Trust Money.

      The   Trustee or a trustee  satisfactory  to the  Trustee  and the Company
shall  hold in trust  money or U.S.  Government  Obligations  deposited  with it
pursuant to Section 8.1. It shall apply the  deposited  money and the money from
U.S. Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal and interest on the Securities.

Section 8.3 Repayment to Company.

      (a)   The Trustee and the Paying  Agent shall  promptly pay to the Company
upon written  request any excess money or  securities  held by them at any time.
All money deposited with the Trustee  pursuant to Section 8.1 (and held by it or
the Paying Agent) for the payment of Securities  subsequently converted shall be
returned to the Company upon request.

      (b)   The  Trustee  and the Paying  Agent  shall pay to the  Company  upon
written  request any money held by them for the payment of principal or interest
that remains  unclaimed for two years after the right to such money has matured;
provided,  however,  that the Company  shall cause  notice of such payment to be
mailed to each  Holder  entitled  thereto no less than thirty (30) days prior to
such repayment. After payment to the Company, Holders entitled to the money must
look to the  Company  for  payment  as  unsecured  general  creditors  unless an
abandoned  property law designates  another Person. If money is delivered to the
Company  pursuant to this Section  8.3(b),  all liability of the Trustee and the
Paying Agent with respect to such money shall cease.

                                       29

<PAGE>

Section 8.4 Reinstatement.

      If    the  Trustee  or  Paying  Agent is unable to apply any money or U.S.
Government  Obligations  in  accordance  with Section 8.2 by reason of any legal
proceeding  or by reason of any order or judgment  of any court or  governmental
authority enjoining,  restraining or otherwise prohibiting such application, the
Company's  obligations  under this Indenture and the Securities shall be revived
and  reinstated as though no deposit had occurred  pursuant to Section 8.1 until
such time as the Trustee or Paying Agent is permitted to apply all such money or
U.S. Government  Obligations in accordance with Section 8.2; provided,  however,
that if the Company has made any  payment of  interest  on or  principal  of any
Securities because of the reinstatement of its obligations, the Company shall be
subrogated  to the rights of the  Holders  of such  Securities  to receive  such
payment,  as long as no money is owed to the  Trustee by the  Company,  from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.

                                   ARTICLE IX.

                                   AMENDMENTS

Section 9.1 Without Consent of Holders.

      The   Company and the Trustee may amend this  Indenture or the  Securities
without the consent of any Holder:

      (a)   to cure any ambiguity, defect or inconsistency;

      (b)   to comply with Section 5.1;

      (c)   to make any  change  that would  provide  any  additional  rights or
benefits to Holders of Securities  or that does not  adversely  affect the legal
rights hereunder of any Holder;

      (d)   to increase the aggregate  dollar amount of Securities  which may be
outstanding under this Indenture;

      (e)   make any  change in Section  3.2;  provided,  however,  that no such
change shall adversely affect the rights of any outstanding Security;

      (f)   to comply with any  requirements  of the SEC in connection  with the
qualification  of this  Indenture  under  the TIA or any  requirements  of state
securities  regulators  imposed  in  connection  with the  qualification  of the
Indenture or the Securities under state law; or

      (g)   to make any change  necessary to maintain the Company's  status as a
real estate investment trust.

Section 9.2 With Consent of Holders.

      (a)   The  Company  and  the  Trustee  may  amend  this  Indenture  or the
Securities  with the  written  consent of the  Holders of at least a majority in
principal amount of the then

                                       30

<PAGE>

outstanding  Securities.  The  Holders of a majority  in  principal  of the then
outstanding  Securities may also waive any existing  default or compliance  with
any provision of this Indenture or the Securities.

      (b)   It shall not be necessary  for the consent of the Holders under this
Section to approve the particular form of any proposed  amendment or waiver, but
it shall be sufficient if such consent approves the substance thereof.

Section 9.3 Compliance with Trust Indenture Act.

      If at the time this  Indenture  shall be  qualified  under the TIA,  every
amendment  to  this  Indenture  or  the  Securities  shall  be  set  forth  in a
supplemental indenture that complies with the TIA as then in effect.

Section 9.4 Revocation and Effect of Consents.

      (a)   Until an amendment or waiver becomes effective, a consent to it by a
Holder of a Security is a continuing  consent by the Holder and every subsequent
Holder of a Security or portion of a Security  that  evidences  the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security.  An amendment or waiver becomes  effective in accordance  with its
terms and thereafter binds every Holder.

      (b)   The Company may fix a record date for determining which Holders must
consent to such  amendment or waivers.  If the Company fixes a record date,  the
record  date  shall be fixed at (i) the later of thirty  (30) days  prior to the
first  solicitation  of such  consent  or the  date of the most  recent  list of
Holders furnished to the Trustee prior to such solicitation  pursuant to Section
2.5, or (ii) such other date as the Company shall designate.

Section 9.5 Notation on or Exchange of Securities.

      The Trustee may place an appropriate notation about an amendment or waiver
on any Security, if certificated,  or any Account statement. Failure to make any
notation or issue a new  Security  shall not affect the  validity  and effect of
such amendment or waiver.

Section 9.6 Trustee to Sign Amendments, etc.

      The Trustee shall sign any amendment or supplemental  indenture authorized
pursuant  to this  Article 9 if, in the  Trustee's  reasonable  discretion,  the
amendment  does  not  adversely  affect  the  rights,  duties,   liabilities  or
immunities of the Trustee.  If it does,  the Trustee may, but need not, sign it.
In signing or refusing to sign such  amendment or  supplemental  indenture,  the
Trustee  shall be entitled to receive,  if  requested,  an indemnity  reasonably
satisfactory  to it and to receive and,  subject to Section 7.1,  shall be fully
protected in relying  upon, an Officer's  Certificate  and an Opinion of Counsel
(or written  advice of counsel) as conclusive  evidence  that such  amendment or
supplemental indenture is authorized or permitted by this Indenture,  that it is
not  inconsistent  herewith,  and that it will be  valid  and  binding  upon the
Company in accordance with its terms.

                                       31

<PAGE>

                                   ARTICLE X.

                                  MISCELLANEOUS

Section 10.1 Trust Indenture Act Controls.

            If any provision of this  Indenture  limits,  qualifies or conflicts
with the duties imposed by TIA ss. 318(c), the imposed duties shall control.

Section 10.2 Notices.

      (a)   Any notice, instruction,  direction,  request or other communication
by the  Company,  the  Trustee  or any  Holder to the others is duly given if in
writing and delivered in person or mailed by  first-class  mail  (registered  or
certified, return receipt requested), telex, telecopier or overnight air courier
guaranteeing next day delivery, to the other's address:

      If to the Company:

            AMERICAN CHURCH MORTGAGE COMPANY
            10237 Yellow Circle Drive
            Minnetonka, MN 55343
            Attention: President
            Fax: (952) 945-9433

      If to the Trustee:

            HERRING BANK
            Corporate Trust Department
            1608 S. Polk St.
            Amarillo, TX 79102
            Fax: (806) 378-6655

      (b)   The  Company or the Trustee by notice to the Company and the Trustee
may  designate  additional  or different  addresses  for  subsequent  notices or
communications.

      (c)   All  notices and  communications  (other than those sent to Holders)
shall be deemed  to have been duly  given:  at the time  delivered  by hand,  if
personally delivered;  five (5) Business Days after being deposited in the mail,
postage  prepaid,  if mailed;  when  answered  back,  if telexed;  when  receipt
acknowledged,  if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.

      (d)   Any  notice  or  communication  to  a  Holder  shall  be  mailed  by
first-class  mail,  certified or registered,  return receipt  requested,  to his
address shown on the register kept by the Registrar. Failure to mail a notice or
communication  to a Holder or any defect in it shall not affect its  sufficiency
with respect to other Holders.

      (e)   If a notice or  communication is mailed in the manner provided above
within the time  prescribed,  it is duly  given,  whether  or not the  addressee
receives it.

                                       32

<PAGE>

      (f)   If the Company mails a notice or communication to Holders,  it shall
mail a copy to the Trustee and each Agent at the same time.

Section 10.3 Communication by Holders with Other Holders.

      Holders may communicate pursuant to TIA ss. 312(b) with other Holders with
respect to their rights  under this  Indenture  or the  Securities.  The Trustee
shall provide information regarding other Holders to any Holder only as required
by TIA ss. 312(b). The Company, the Trustee, the Registrar and anyone else shall
have the protection of TIA ss. 312(c).

Section 10.4 Certificate and Opinion as to Conditions Precedent.

      Upon any request or  application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:

      (a)   an  Officer's   Certificate   in  form  and   substance   reasonably
satisfactory  to the Trustee  (which shall include the  statements  set forth in
Section  10.5)  stating  that,  in the opinion of the  signers,  all  conditions
precedent and covenants,  if any, provided for in this Indenture relating to the
proposed action have been complied with; and

      (b)   an Opinion of Counsel in form and substance reasonably  satisfactory
to the Trustee  (which shall include the  statements  set forth in Section 10.5)
stating that, in the opinion of such counsel,  all such conditions precedent and
covenants have been complied with.

Section 10.5 Statements Required in Certificate or Opinion.

      Each certificate or opinion with respect to compliance with a condition or
covenant  provided  for in this  Indenture  (other than a  certificate  provided
pursuant to TIA ss. 314(a)(4)) shall include:

      (a)   a statement  that the Person making such  certificate or opinion has
read such covenant or condition;

      (b)   a brief  statement as to the nature and scope of the  examination or
investigation   upon  which  the  statements  or  opinions   contained  in  such
certificate or opinion are based;

      (c)   a statement  that,  in the opinion of such Person,  he has made such
examination  or  investigation  as is  necessary  to enable  him to  express  an
informed opinion whether such covenant or condition has been complied with; and

      (d)   a statement whether,  in the opinion of such Person,  such condition
or covenant has been complied with.

Section 10.6 Rules by Trustee and Agents.

      The  Trustee  may make  reasonable  rules for action by or at a meeting of
Holders.  The  Registrar  or  Paying  Agent  may make  reasonable  rules and set
reasonable requirements for its functions.

                                       33

<PAGE>

Section 10.7 Legal Holidays.

      A  "Legal  Holiday"  is a  Saturday,  a Sunday  or a day on which  banking
institutions  in the State of Minnesota or at a place of payment are  authorized
or  obligated  by law,  regulation  or executive  order to remain  closed.  If a
payment  date is a Legal  Holiday at a place of payment,  payment may be made at
that  place  on the next  succeeding  day  that is not a Legal  Holiday,  and no
interest shall accrue for the intervening period.

Section 10.8 No Recourse Against Others.

      No director,  officer,  employee,  agent,  manager or  stockholder  of the
Company as such,  shall have any  liability for any  obligations  of the Company
under the  Securities or this Indenture or for any claim based on, in respect of
or by reason of such  obligations or their creation.  Each Holder by accepting a
Security waives and releases all such liability.

Section 10.9 Duplicate Originals.

      The  parties may sign any number of copies of this  Indenture.  One signed
copy is enough to prove this Indenture.

Section 10.10 Governing Law.

      THE INTERNAL LAW OF THE STATE OF MINNESOTA SHALL GOVERN THIS INDENTURE AND
THE SECURITIES, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.

Section 10.11 No Adverse Interpretation of Other Agreements.

      This  Indenture may not be used to interpret  another  indenture,  loan or
debt agreement of the Company.  Any such  indenture,  loan or debt agreement may
not be used to interpret this Indenture.

Section 10.12 Successors.

      All agreements of the Company in this  Indenture and the Securities  shall
bind its successors.  All agreements of the Trustee in this Indenture shall bind
its successor.

Section 10.13 Severability.

      In case any  provision  in this  Indenture or in the  Securities  shall be
invalid, illegal or unenforceable,  the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

Section 10.14 Counterpart Originals.

      The parties may sign any number of copies of this  Indenture.  Each signed
copy  shall  be an  original,  but  all of  them  together  represent  the  same
agreement.

                                       34

<PAGE>

Section 10.15 Table of Contents, Headings, etc.

      The Table of Contents,  Cross-Reference Table and Headings of the Articles
and Sections of this Indenture  have been inserted for  convenience of reference
only,  are not to be  considered  a part  hereof  and shall in no way  modify or
restrict any of the terms or provisions thereof.

                  [Remainder of page intentionally left blank.]

                                       35

<PAGE>

SIGNATURES

      IN WITNESS  WHEREOF,  the parties  hereto have caused this Indenture to be
duly executed and their  respective  corporate seals to be hereunto  affixed and
attested, as of the day and year first written above.

                                      AMERICAN CHURCH MORTGAGE COMPANY

                                      By:     /s/ Philip J. Myers
                                          ----------------------------------
                                              Philip J. Myers, President

STATE OF MINNESOTA  )
                    ) ss.
COUNTY OF HENNEPIN  )

The  foregoing  was  acknowledged  before me this 1st day of April 1,  2009,  by
Philip J. Myers,  in his  capacity as  President  of  American  Church  Mortgage
Company, a Minnesota corporation.

/s/ Kristen S. Hurley
---------------------
Notary Public

                                      HERRING BANK, as Trustee

                                      By:     /s/ Catana Gray
                                            --------------------------------
                                      Name: Catana Gray
                                      Title: Vice-President

STATE OF TEXAS      )
                    ) ss.
COUNTY OF POTTER    )

The  foregoing  was  acknowledged  before me this 1st day of April 1,  2009,  by
Catana Gray, in her capacity as Vice-President of Herring Bank.

/s/ Denise Messer
--------------------------
Notary Public

                          {SIGNATURE PAGE TO INDENTURE}

                                       36

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