SECURITY AGREEMENT
(COLLATERAL PLEDGE AGREEMENT)
DATE JULY 22, 1999
DEBTOR AMERICAN CHURCH MORTGAGE COMPANY
BUSINESS OR RESIDENCE ADDRESS 00000 XXXXXX XXXXXX XXXXX
XXXX, XXXXX & ZIP CODE XXXXXXXXXX, XX 00000
SECURED PARTY BEACON BANK
ADDRESS 00000 XXXXXXX XXXXX
XXXX, XXXXX & ZIP CODE XXXXXXXXX, XX 00000
1. SECURITY INTEREST AND COLLATERAL. To secure (check one):
/ / the payment and performance of each and every debt, liability and
obligation of every type and description which Debtor may now or at any
time hereafter owe to Secured Party (whether such debt, liability or
obligation now exists or is hereafter created or incurred, and whether it
is or may be direct or indirect, due or to become due, absolute or
contingent, primary or secondary, liquidated or unliquidated, or joint,
several or joint and several; all such debts, liabilities and obligations
being herein collectively referred to as the "Obligations"),
/x/ the debt, liability or obligation of the Debtor to secured party
evidenced by the following: NOTE 1037068 DATED 7/22/99 FOR $1,000,000
BTWN ACMC & BB, and any extensions, renewals or replacements thereof
(herein referred to as the "Obligations").
Debtor hereby grants Secured Party a security interest (herein called the
"Security Interest") in (check one):
/ / all property of any kind now or at any time hereafter owned by
Debtor, or in which Debtor may now or hereafter have an interest, which
may now be or may at any time hereafter come into the possession or
control of Secured Party or into the possession or control of Secured
Party's agents or correspondents, whether such possession or control is
given for collateral purposes or for safekeeping, together with all
rights in connection with such property (herein called the
"Collateral"),
/x/ the property owned by Debtor and held by Secured Party that is
described as follows: MORTGAGE SECURED CHURCH BONDS IDENTIFIED ON
ATTACHED EXHIBIT "A" together with all rights in connection with such
property (herein called the "Collateral").
2. REPRESENTATIONS, WARRANTIES AND COVENANTS. Debtor represents, warrants
and covenants that,
(a) Debtor will duly endorse, in blank, each and every instrument
constituting Collateral by signing on said instrument or by signing a separate
document of assignment or transfer, if required by Secured Party.
(b) Debtor is the owner of the Collateral free and clear of all liens,
encumbrances, security interests and restrictions, except the Security
Interest and any restrictive legend appearing on any instrument constituting
Collateral.
(c) Debtor will keep the Collateral free and clear of all liens,
encumbrances and security interests, except the Security Interest.
(d) Debtor will pay, when due, all taxes and other governmental charges
levied or assessed upon or against any Collateral.
(e) At any time, upon request by Secured Pary, Debtor will deliver to
Secured Party all notices, financial statements, reports or other
communications received by Debtor as an owner or holder of the Collateral.
(f) Debtor will upon receipt deliver to Secured Party in pledge as
additional Collateral all securities distributed on account of the Collateral
such as stock dividends and securities resulting from stock splits,
reorganizations and recapitalizations.
THIS AGREEMENT CONTAINS ADDITIONAL PROVISIONS SET FORTH ON PAGE 2
HEREOF, ALL OF WHICH ARE MADE A PART HEREOF.
AMERICAN CHURCH MORTGAGE COMPANY
---------------------------------------
Debtor's Name
By /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
XXXXX X. XXXXXXXX
Title: PRESIDENT
---------------------------------
By
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Title:
---------------------------------
(page 1 of 2)
ADDITIONAL PROVISIONS
3. RIGHTS OF SECURED PARTY. Debtor agrees that Secured Party may at any
time, whether before or after the occurrence of an Event of Default and
without notice or demand of any kind, (i) notify the obligor on or issuer of
any Collateral to make payment to Secured Party of any amounts due or
distributable thereon, (ii) in Debtor's name or Secured Party's name enforce
collection of any Collateral by suit or otherwise, or surrender, release or
exchange all or any part of it, or compromise, extend or renew for any period
any obligation evidenced by the Collateral, (iii) receive all proceeds of the
Collateral, and (iv) hold any increase or profits received from the
Collateral as additional security for the Obligations, except that any money
received from the Collateral shall, at Secured Party's option, be applied in
reduction of the Obligations, in such order of application as Secured Party may
determine, or be remitted to Debtor.
4. EVENTS OF DEFAULT. Each of the following occurrences shall constitute an
event of default under this Agreement (herein called "Event of Default"):
(i) Debtor shall fail to pay any or all of the Obligations when due or (if
payable on demand) on demand, or shall fail to observe or perform any
covenant or agreement herein binding on it; (ii) any representation or
warranty by Debtor set forth in this Agreement or made to Secured Party in
any financial statements or reports submitted to Secured Party by or on
behalf of Debtor shall prove materially false or misleading; (iii) a
garnishment summons or a writ of attachment shall be issued against or served
upon the Secured Party for the attachment of any property of the Debtor or
any indebtedness owing to Debtor; (iv) Debtor or any guarantor of any
Obligation shall (A) be or become insolvent (however defined); (B)
voluntarily file, or have filed against it involuntarily, a petition under
the United States Bankruptcy Code; or (C) if a corporation, partnership or
organization, be dissolved or liquidated or, if a partnership, suffer the
death of a partner or, if an individual, die; or (D) go out of business; (v)
Secured Party shall in good faith believe that the value then realizable by
collection or disposition of the Collateral, after deduction of expenses of
collection and disposition, is less than the aggregate unpaid balance of all
Obligations then outstanding; (vi) Secured Party shall in good faith believe
that the prospect of due and punctual payment of any or all of the
Obligations is impaired.
5. REMEDIES UPON EVENT OF DEFAULT. Upon the occurrence of an Event of
Default and at any time thereafter, Secured Party may exercise any one or
more of the following rights or remedies: (i) declare all unmatured
Obligations to be immediately due and payable, and the same shall thereupon
be immediately due and payable, without presentment or other notice or
demand; (ii) exercise all voting and other rights as a holder of the
Collateral; (iii) exercise and enforce any or all rights and remedies
available upon default to a secured party under the Uniform Commercial Code,
including the right to offer and sell the Collateral privately to purchasers
who will agree to take the Collateral for investment and not with a view to
distribution and who will agree to the imposition of restrictive legends on
the certificates representing the Collateral, and the right to arrange for a
sale which would otherwise qualify as exempt from registration under the
Securities Act of 1933; and if notice to Debtor of any intended disposition of
the Collateral or any other intended action is required by law in a
particular instance, such notice shall be deemed commercially reasonable if
given at least 10 calendar days prior to the date of intended disposition or
other action; (iv) exercise or enforce any or all other rights or remedies
available to Secured Party by law or agreement against the Collateral,
against Debtor or against any other person or property. Upon the occurrence
of the Event of Default described in Section 4 (iv) (B), all Obligations shall
be immediately due and payable without demand or notice thereof.
6. MISCELLANEOUS. Any disposition of the Collateral in the manner provided
in Section 5 shall be deemed commercially reasonable. This Agreement can be
waived, modified, amended, terminated or discharged, and the Security
Interest can be released, only explicitly in a writing signed by Secured
Party. A waiver signed by Secured Party shall be effective only in the
specific instance and for the specific purpose given. Mere delay or failure
to act shall not preclude the exercise or enforcement of any of Secured
Party's rights or remedies. All rights and remedies of Secured Party shall
be cumulative and may be exercised singularly or concurrently, at Secured
Party's option, and the exercise or enforcement of any one such right or
remedy shall neither be a condition to nor bar the exercise or enforcement of
any other. All notices to be given to Debtor shall be deemed sufficiently
given if delivered or mailed by registered or certified mail, postage
prepaid, to Debtor at its address set forth above or at the most recent
address shown on Secured Party's records. Secured Party's duty of care with
respect to Collateral in its possession (as imposed by law) shall be deemed
fulfilled if Secured Party exercises reasonable care in physically
safekeeping such Collateral or, in the case of Collateral in the custody or
possession of a bailee or other third person, exercises reasonable care in
the selection of the bailee or other third person, and Secured Party need not
otherwise preserve, protect, insure or care for any Collateral. Secured
Party shall not be obligated to preserve any rights Debtor may have against
prior parties, to exercise at all or in any particular manner any voting
rights which may be available with respect to any Collateral, to realize on
the Collateral at all or in any particular manner or order, or to apply any
cash proceeds of Collateral in any particular order of application. Debtor
will reimburse Secured Party for all expenses (including reasonable
attorney's fees and legal expenses) incurred by Secured Party in the
protection, defense or enforcement of the Security Interest, including
expenses incurred in any litigation or bankruptcy or insolvency proceedings.
This Agreement shall be binding upon and inure to the benefit of Debtor and
Secured Party and their respective heirs, representatives, successors and
assigns and shall take effect when signed by Debtor and delivered to Secured
Party, and Debtor waives notice of Secured Party's acceptance hereof. This
Agreement shall be governed by laws of the state in which it is executed and,
unless the context otherwise requires, all terms used herein which are
defined in Articles 1 and 9 of the Uniform Commercial Code, as in effect in
said state, shall have the meanings therein stated. If any provision or
application of this Agreement is held unlawful or unenforceable in any
respect, such illegality or unenforceability shall not affect other
provisions or applications which can be given effect, and this Agreement
shall be construed as if the unlawful or unenforceable provision or
application had never been contained herein or prescribed hereby. All
representations and warranties contained in this Agreement shall survive the
execution, delivery and performance of this Agreement and the creation and
payment of the Obligations. If this Agreement is signed by more than one
person as Debtor, the term "Debtor" shall refer to each of them separately
and to both or all of them jointly, all such persons shall be bound both
severally and jointly with the other(s); and the Obligations shall include
all debts, liabilities and obligations owed to Secured Party by a Debtor
solely or by both or several or all Debtors jointly or jointly and severally,
and all property described in Section 1 shall be included as part of the
Collateral, whether it is owned jointly by both or all Debtors or is owned in
whole or in part by one (or more) of them.
(page 2 of 2)
