FORM OF
Exhibit 10.3
SECURITIES ACCOUNT
CONTROL AGREEMENT
This
Securities Account
Control Agreement ("Agreement") is dated as of
September 12,
2008, by and among HERRING BANK, a Texas state banking
institution, in its
capacity as a "securities intermediary" as defined in
Section 8-102 of the
UCC, with its
principal office located at 2201 Civic
Circle, Amarillo,
Texas 79109
("Securities
Intermediary"),
AMERICAN CHURCH
MORTGAGE COMPANY, a Minnesota corporation, with its principal office located
at
10237 Yellow Circle Drive, Minneapolis, Minnesota 55343 ("Pledgor"), and
BEACON
BANK, a Minnesota banking corporation, as lender under the
hereinafter described
Credit Agreement,
with its principal office located at 19765 Highway 7,
Shorewood, Minnesota 55331 ("Secured Party").
Pledgor is the borrower under that certain Loan and Security Agreement
dated as of September 12, 2008 (as the same may be amended,
extended, renewed,
increased, restated or
replaced from time to time, the "Credit Agreement") by
and between Pledgor, as borrower, and Secured Party, as lender.
This
Agreement refers and
applies to the
securities account
number _____
_________ (the
"ICA Account") established by and in the name of Pledgor,
including, without
limitation,
all investment property, financial assets,
securities and other property now or hereafter held therein (the
"Assets").
As
of the date of execution of this Agreement, the Assets described on Exhibit A
are held in the ICA Account. This Agreement supplements, rather than replaces,
Securities
Intermediary's account
agreement,
terms and conditions and other
standard documentation
in effect from time to time with respect to the ICA
Account ("Account
Documentation"),
or related services
provided by Securities
Intermediary in
connection with the
ICA Account ("Account
Services"),
which
Account Documentation
shall continue to apply to the ICA Account and such
Account Services,
to the extent not
conflicting
with the provisions of this
Agreement; in the
event of any such
conflict, or in the
event of a
conflict
among the provisions of any other agreement between Securities
Intermediary and
Pledgor and this
Agreement, the
provisions of this
Agreement shall control.
Terms used and not defined herein shall have the meaning set forth
in the Credit
Agreement.
Pledgor has advised
Securities
Intermediary
that Pledgor has granted a
security interest in
the ICA Account to Secured Party. Pledgor desires that
Securities Intermediary enter into this Agreement with Pledgor and
Secured Party
to establish "control"
and perfect Secured Party's security interest in the ICA
Account.
Therefore, in
consideration of the
provisions of this Agreement and other
valuable
consideration, the
receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
<PAGE>
1.
Control.
(a)
Securities Intermediary shall comply with entitlement orders
respecting
the ICA Account originated by Secured Party without further consent
by Pledgor.
(b)
Securities
Intermediary
shall make
trades of Assets held
in the ICA
Account only at the
direction of Secured
Party (and not Pledgor) and shall not
comply with entitlement orders or other directions concerning the ICA Account
originated by Pledgor.
(c) Without limiting
the foregoing, upon the instructions of Secured Party,
Securities
Intermediary shall
disburse any or all of the Assets in the ICA
Account to Secured
Party, or sell some or
all of the Assets in the ICA Account
and remit the sale proceeds (less Securities Intermediary's normal
sales charge)
to Secured Party.
(d)
Securities
Intermediary,
Pledgor
and Secured Party agree that
Securities
Intermediary will
comply with
instructions
originated by
Secured
Party directing
disposition
of the funds in the
ICA Account without
further
consent by
Pledgor. Upon receipt of a notice of
Secured Party's exclusive
control of the
ICA Account, which notice states that it is a "Notice of
Exclusive Control" and attached to which is a copy of this
Agreement ("Notice of
Exclusive Control"),
and following a
reasonable time period
not to exceed two
(2) business days to allow Securities Intermediary to take
appropriate action as
a result of receipt of the Notice of Exclusive Control,
Securities
Intermediary
will comply with instructions received from the Secured Party.
Until Securities
Intermediary receives
a Notice of Exclusive Control, Pledgor retains the right
to access the cash in the ICA Account or to direct the investment,
reinvestment
and liquidation of proceeds of the Bonds. Until Securities
Intermediary receives
a Notice of Exclusive
Control, Pledgor may
remove Assets from the ICA Account,
but only with the written consent of Secured Party. If
Pledgor wishes to remove
Assets from the ICA
Account, it shall give
at least fifteen
(15) days' prior
written notice to Secured Party (the "Bond Removal Notice") in accordance
with
Section 4(b) of the Credit Agreement. If Pledgor is in compliance (both
before
and after the release of the requested Assets) with the Borrowing
Base and the
collateral coverage
covenant under Section 12(b) of the Credit Agreement and is
otherwise not in default thereunder, Secured Party shall within
five (5) days of
receipt of the Bond
Removal Notice
consent in writing to the release of the
requested Assets and
provide to Pledgor and the Securities Intermediary such
documentation as is
required to
terminate any lien or security interest of
Secured Party in and to such Assets.
(e)
Securities
Intermediary is fully entitled to rely on instructions from
Secured Party
and is under no
obligation
to inquire or determine whether
Pledgor's obligations
to Secured Party are in default or whether Secured Party
is entitled, under any
separate agreement between Pledgor and Secured Party, to
give any instructions. Securities Intermediary may rely on notices and
instructions received
hereunder which Securities Intermediary believes in good
faith come from the appropriate party.
(f)
After Securities
Intermediary's
receipt of the
Notice of Exclusive
Control from Secured Party, and without limiting Secured
Party's control of the
ICA Account, the
parties agree that
instructions
received from Secured
Party
shall direct
reasonable services
and transactions as are offered by Securities
Intermediary in the
normal course of its
business in regard to
securities or
deposit accounts.
Securities
Intermediary
shall not be
required to provide
extraordinary services
or documentation regarding the ICA Account unless
Securities
Intermediary
confirms that
such extraordinary services or
documentation are
available.
If there
