Exhibit 10.2
FORM OF
REVOLVING NOTE
_________ __, 2008
$8,000,000.00
American Church Mortgage Company, a Minnesota corporation (the "Borrower"),
for value received, hereby promises to pay to the order of Beacon Bank, a
Minnesota banking corporation ("Lender"), at the Lender's principal place of
business at 00000 Xxxxxxx Xxxxx, Xxxxxxxxx, XX 00000, or at such other place as
may be designated by the holder hereof, in lawful money of the United States of
America, the principal sum of Eight Million Dollars ($8,000,000.00), or such
lesser amount as may be advanced from time to time, together with interest at
the Wall Street Journal Prime Rate (the "Prime Rate") as such rate is
established from time to time. The Prime Rate is currently 5%. The interest rate
is subject to a floor of 5%. If the Prime Rate is greater than 6%, the interest
rate hereon shall be reduced by 50 basis points, subject to a floor of 6% (e.g.,
if the Prime Rate is 6.25%, the interest rate hereon shall be equal to 6%; if
the Prime Rate is 7%, then the interest rate hereon shall be equal to 6.5%).
Interest shall be due and payable monthly on the first day of each month
commencing on October 1, 2008. All payments shall be applied first to interest,
then to reduction of principal. Interest shall be calculated on the basis of
actual days elapsed in a 360 day year. The entire unpaid principal and all
accrued and unpaid interest shall be due and payable in full on September 12,
2010, or such earlier date as is defined in a Loan and Security Agreement ("Loan
Agreement") entered into by and between Borrower and Lender of even date
herewith. This is a balloon payment.
Pursuant to the terms of the Loan Agreement, principal may be advanced,
repaid and readvanced. The Loan Agreement contains limitations and restrictions
on advances and other terms and conditions.
Borrower shall pay to Lender a late charge of five percent (5%) of any
monthly installment not received by the Lender within ten (10) days after the
installment is due, but such late charge shall not apply to the final balloon
payment due hereon provided the final balloon payment is paid within fifteen
(15) days of the date on which it is due.
The holder of this Note may, at its option, without notice (provided,
however, that only after regular monthly payments have commenced on the Note,
Lender will give Borrower, at Borrower's last known address ten (10) days
written notice [calculated from the date of mailing] prior to acceleration)
declare this Note immediately due and payable for the entire unpaid principal
hereof plus accrued interest hereon upon or at any time after the occurrence of
any of the following events: (i) any default in the payment of this Note; (ii)
any default under the terms or conditions of any security herewith or heretofore
or hereafter given to or acquired and held by the holder of this Note to which
any maker, co-maker, endorser, surety or guarantor hereof is a party; (iii) or
if the holder hereof, after giving due consideration to commercially reasonable
standards, deems itself insecure. The Lender shall have no obligation to make
further advances under any loan commitment regardless of the amount loaned at
any time Xxxxxx considers the loan insecure for any reason.
Each maker, co-maker, endorser, surety and guarantor hereto jointly and
severally agrees to pay this Note and guarantees payment hereof and waives
demand, presentment, protest and notice of dishonor, and consents to any
extensions and renewals hereof without notice and consents to the release by the
holder of this Note with or without consideration of any of them, and exonerates
the holder of this Note from any duty or obligation to make demand on anyone for
payment or any collateral now or hereafter securing this Note or to give notice
to anyone of nonpayment thereof or to collect or sell the same and consents to
the extension, renewal, exchange, surrender or release by the holder of this
Note with or without consideration of any such collateral, and agrees that when
or at any time after this Note becomes due, the holder of this Note may without
notice, offset or charge this Note against any bank account or other account
then maintained by any of them with the holder of this Note or then existing
between any of them and the holder of this Note and to pay any deficiency, and
agree in case of any default to pay all costs of collection, including
reasonable attorney's fees.
Lender has the right to further extend this Note. Any such extension may
provide for an extended period of time for principal repayment, an increase or
decrease in the interest rate, advancement of additional principal sums, or any
combination thereof (together with the inclusion of fees and costs related to
such extension) resulting in principal, interest and monthly payment amounts
equal to or exceeding those originally stated.
BORROWER
AMERICAN CHURCH MORTGAGE COMPANY
By: ______________________
Xxxxxxx X. Xxxxx
Its: President
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