INDENTURE

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AMERICAN CHURCH MORTGAGE COMPANY | THE HERRING NATIONAL BANK

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Title: INDENTURE
Governing Law: Minnesota Date: 6/28/2004

INDENTURE

AMERICAN CHURCH MORTGAGE COMPANY, as obligor

Series B Secured Investor Certificates

$23,000,000

THE HERRING NATIONAL BANK,

a national banking association, as trustee

Dated as of __________, 2004

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TABLE OF CONTENTS

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

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

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SECTION 1.1 DEFINITIONS...............................................................................1

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SECTION 1.2 OTHER DEFINITIONS.........................................................................4

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SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.........................................5

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SECTION 1.4 RULES OF CONSTRUCTION.....................................................................5

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

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SECTION 2.1 UNLIMITED AMOUNT; ACCOUNTS; INTEREST; MATURITY............................................5

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SECTION 2.2 TRANSACTION STATEMENT; RESCISSION.........................................................6

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SECTION 2.3 REGISTRAR AND PAYING AGENT................................................................7

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SECTION 2.4 DEPOSIT OF PRINCIPAL AND INTEREST WITH PAYING AGENT.......................................7

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SECTION 2.5 LIST OF HOLDERS...........................................................................7

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SECTION 2.6 TRANSFER AND EXCHANGE.....................................................................7

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SECTION 2.7 PAYMENT OF PRINCIPAL AND INTEREST; PRINCIPAL AND INTEREST RIGHTS PRESERVED................8

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SECTION 2.8 RESERVED..................................................................................9

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SECTION 2.9 OUTSTANDING SECURITIES....................................................................9

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SECTION 2.10 TREASURY SECURITIES.......................................................................9

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SECTION 2.11 RESERVED..................................................................................9

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SECTION 2.12 RESERVED.................................................................................10

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SECTION 2.13 DEFAULTED INTEREST.......................................................................10

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SECTION 2.14 BOOK-ENTRY REGISTRATION..................................................................10

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SECTION 2.15 INITIAL AND PERIODIC STATEMENTS..........................................................11

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ARTICLE III. REDEMPTION...............................................................................11

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SECTION 3.1 REDEMPTION OF SECURITIES AT THE COMPANY'S ELECTION.......................................11

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SECTION 3.2 REDEMPTION OF SECURITIES AT THE HOLDER'S ELECTION........................................12

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SECTION 3.3 OFFER TO REDEEM SECURITIES UPON CHANGE OF THE COMPANY'S ADVISOR..........................13

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ARTICLE IV. COVENANTS................................................................................13

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SECTION 4.1 PAYMENT OF SECURITIES....................................................................13

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SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY..........................................................13

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SECTION 4.3 SEC REPORTS AND OTHER REPORTS............................................................14

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SECTION 4.4 COMPLIANCE CERTIFICATE...................................................................14

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SECTION 4.5 STAY, EXTENSION AND USURY LAWS...........................................................15

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SECTION 4.6 LIQUIDATION..............................................................................15

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SECTION 4.7 FINANCIAL COVENANTS......................................................................15

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SECTION 4.8 RESTRICTIONS ON DIVIDENDS AND CERTAIN TRANSACTIONS WITH AFFILIATES.......................16

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SECTION 4.9 COLLATERAL...............................................................................16

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SECTION 4.10 APPOINTMENT AS ATTORNEY-IN-FACT..........................................................18

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ARTICLE V. SUCCESSORS...............................................................................19

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SECTION 5.1 WHEN THE COMPANY MAY MERGE, ETC..........................................................19

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SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED........................................................20

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ARTICLE VI. DEFAULTS AND REMEDIES....................................................................20

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SECTION 6.1 EVENTS OF DEFAULT........................................................................20

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SECTION 6.2 ACCELERATION.............................................................................21

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SECTION 6.3 OTHER REMEDIES...........................................................................22

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SECTION 6.4 WAIVER OF PAST DEFAULTS..................................................................22

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SECTION 6.5 CONTROL BY MAJORITY......................................................................23

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SECTION 6.6 LIMITATION ON SUITS......................................................................23

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SECTION 6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.....................................................23

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SECTION 6.8 COLLECTION SUIT BY TRUSTEE...............................................................23

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SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM.........................................................24

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SECTION 6.10 PRIORITIES...............................................................................24

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SECTION 6.11 UNDERTAKING FOR COSTS....................................................................25

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ARTICLE VII. TRUSTEE..................................................................................25

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SECTION 7.1 DUTIES OF TRUSTEE........................................................................25

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SECTION 7.2 RIGHTS OF TRUSTEE........................................................................26

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SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE.............................................................27

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SECTION 7.4 TRUSTEE'S DISCLAIMER.....................................................................27

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SECTION 7.5 NOTICE OF DEFAULTS.......................................................................27

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SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS............................................................27

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SECTION 7.7 COMPENSATION AND INDEMNITY...............................................................28

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SECTION 7.8 REPLACEMENT OF TRUSTEE...................................................................29

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SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC.........................................................30

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SECTION 7.10 ELIGIBILITY; DISQUALIFICATION............................................................30

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SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY........................................30

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ARTICLE VIII. DISCHARGE OF INDENTURE...................................................................30

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SECTION 8.1 TERMINATION OF COMPANY'S OBLIGATIONS.....................................................30

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SECTION 8.2 APPLICATION OF TRUST MONEY...............................................................31

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SECTION 8.3 REPAYMENT TO COMPANY.....................................................................31

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SECTION 8.4 REINSTATEMENT............................................................................32

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ARTICLE IX. AMENDMENTS...............................................................................32

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SECTION 9.1 WITHOUT CONSENT OF HOLDERS...............................................................32

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SECTION 9.2 WITH CONSENT OF HOLDERS..................................................................33

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SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT......................................................34

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SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS........................................................34

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SECTION 9.5 NOTATION ON OR EXCHANGE OF SECURITIES....................................................34

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SECTION 9.6 TRUSTEE TO SIGN AMENDMENTS, ETC..........................................................34

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ARTICLE X. MISCELLANEOUS............................................................................35

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SECTION 10.1 TRUST INDENTURE ACT CONTROLS.............................................................35

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SECTION 10.2 NOTICES..................................................................................35

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SECTION 10.3 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS..............................................36

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SECTION 10.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.......................................36

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SECTION 10.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION............................................36

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SECTION 10.6 RULES BY TRUSTEE AND AGENTS..............................................................37

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SECTION 10.7 LEGAL HOLIDAYS...........................................................................37

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SECTION 10.8 NO RECOURSE AGAINST OTHERS...............................................................37

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SECTION 10.9 DUPLICATE ORIGINALS......................................................................37

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SECTION 10.10 GOVERNING LAW............................................................................37

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SECTION 10.11 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS............................................37

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SECTION 10.12 SUCCESSORS...............................................................................37

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SECTION 10.13 SEVERABILITY.............................................................................38

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SECTION 10.14 COUNTERPART ORIGINALS....................................................................38

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SECTION 10.15 TABLE OF CONTENTS, HEADINGS, ETC.........................................................38

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SIGNATURES .........................................................................................39

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iii

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CROSS-REFERENCE TABLE

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*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

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N.A. means not applicable

* This Cross Reference Table is not part of the Indenture

<PAGE>

INDENTURE

THIS INDENTURE is hereby entered into as of _________, 2004, by and between

American Church Mortgage Company, a Minnesota corporation (the "Company"), and

The Herring National Bank, a national banking association, 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 B Secured

Investor Certificates of the Company issued pursuant to the Company's

registration statement on Form S-11 (Reg. No. 333-________) declared effective

by the Securities and Exchange Commission on or about __________, 2004 (the

"Registration Statement"), with a certain amount of such Series B Investor

Certificates reserved for previously registered Series A Investor Certificates

which will be eligible for rollover renewal (the "Renewable Securities"):

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.

"Change of Control" means such time as any Person is or becomes the

beneficial owner, as defined in Rule 13d-3 of the Exchange Act of shares of the

Company's capital stock entitling such Person to exercise 50% or more of the

total voting power of all shares of the Company's

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capital stock entitled to vote in elections of directors (or the capital stock

of any successor of the Company in the case of a merger or transfer of all or

substantially all of the Company's assets).

"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 1001 South Harrison Street, Amarillo,

Texas 79101, Attention: Mozelle Hedrick, Senior Vice President.

"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

<PAGE>

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.

"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.

<PAGE>

"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.

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

"Security" or "Securities" means, the Company's Series B 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 The Herring National Bank, a national banking association,

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"...................................4.7(b)

"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)

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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.

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 $23,000,000, with up to $3 million of such

amount to be reserved for rollover renewals of the Renewable

Securities, 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. Each Security

shall be in such denominations as may

<PAGE>

be designated from time to time by the Company. Each Security, except

for the Renewable Securities, shall have a term of not less than eight

(8) years and not greater than fifteen (15) years as shall be

designated by the Holder at the time of purchase, subject to the

Company's acceptance thereof.

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 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 separate from the

Renewable 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

<PAGE>

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

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.

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;

<PAGE>

(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.

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 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

<PAGE>

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.

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.

outstanding because the Company or an Affiliate of the Company holds

the Security.

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.

<PAGE>

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.

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.

<PAGE>

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) The Company may redeem all, but not less than all, of the Securities

upon the occurrence of a Change of Control by providing thirty (30)

days written notice to the Holders thereof. Each such notice shall

include the Redemption Date and 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 may at any time and from time to time redeem a sufficient

amount of Securities as is necessary to bring the Company into

compliance with the provision of its Bylaws that limit the aggregate

amount of debt that the Company may have outstanding at any time. The

Company may redeem any 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 the paragraph with notice thereof, which notice shall set

the Redemption Date and set forth the Redemption Price for the

Securities to be redeemed.

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