American Church Mortgage Company (OTCMKTS:ACMC) Files An 8-K Entry into a Material Definitive AgreementItem 2.03.
On April 9, 2018, American Church Mortgage Company (the “Company”) entered into a Loan and Security agreement (the “Loan Agreement”) with Alerus Financial, N.A., as lender (the “Lender”), and a Revolving Note (the “Note”) evidencing a $4 million revolving loan (the “Revolving Loan”). The Lender agrees to make loans to the Company from time to time and after the date of the loan agreement and the Company may repay and reborrow to the terms and conditions of the Revolving Loan as long as no borrowing causes that dollar limit to be exceeded and the Company is not otherwise in default on the Revolving Loan. The Revolving Loan is secured by a first priority security interest in substantially all of the Company’s assets other than collateral pledged to secure the Company’s secured investor certificates, both those currently issued and any potentially issued in the future.
The discussion herein regarding the Loan Agreement is qualified in its entirety by reference to the Loan Agreement, the Note, and the Commercial Security Agreement (the “Security Agreement”) attached hereto as Exhibits10.1, 10.2 and 10.3, respectively. Additional information regarding the Loan Agreement, the Note and the Security Agreement is provided in Item 2.03 below, which information is incorporated by reference into this Item 2.03.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
As described in Item 2.03 above, on April 9, 2018, the Company entered into the Revolving Loan. The Revolving Loan matures in 1 year and interest thereon is based on the prevailing London Interbank Offered Rate (LIBOR) for deposits in U.S. dollars having a maturity equal to one month (the “Index”) as published by Bloomberg Financial Markets Information Services (the “Index”). The interest rate change will not occur more often than each month. Lender will tell the Company the current Index rate upon the Company request. The Index is currently 1.8883% per annum. Interest on the unpaid principal balance of this Note will be calculated as described in the “INTREREST CALCULATION METHOD” using a rate of 2.700 percentage points over the Index, rounded to the nearest 0.001percent, adjusted if necessary for any minimum and maximum rate limitations resulting in an initial rate of 4.583%. Under no circumstance will the interest rate on the Note be less than 4.24% per annum or more than the applicable rate allowed by applicable law.
The creation of indebtedness (other than the Revolving Loan and indebtedness securing the Company’s secured investor certificates), creation of liens, making of certain investments, sale of assets, and incurrence of debt are all either limited or require prior approval from Alerus Financial, N.A. The Loan Agreement also contains customary events of default such as nonpayment of obligations, bankruptcy and changes in control.
The discussion herein regarding the Loan Agreement is qualified in its entirety by reference to the Loan Agreement, the Note, and the Security Agreement attached hereto as Exhibits10.1, 10.2 and 10.3, respectively.
Item 2.03 Financial Statements and Exhibits.
(d)Exhibits
| Exhibit Number | Description |
| 10.1 | Loan and Security Agreement by and between American Church Mortgage Company and Alerus Financial, N.A., dated April 9, 2018 |
| 10.2 | Revolving Note dated April 9, 2018 |
| 10.3 | Securities Account Control Agreement dated April 9, 2018 |
AMERICAN CHURCH MORTGAGE CO ExhibitEX-10.1 2 loanagreement040918.htm LOAN AND SECURITY AGREEMENT LOAN AGREEMENT This loan agreement (“Agreement”) is made this 9th day of April,…To view the full exhibit click here
About American Church Mortgage Company (OTCMKTS:ACMC)
American Church Mortgage Company operates as a real estate investment trust (REIT). The Company is engaged in the business of making mortgage loans to churches and other non-profit religious organizations across the United States. The Company is engaged in offering loans ranging from $100,000 to $2,000,000 and selecting and investing in mortgage-secured debt instruments (Church Bonds) issued by churches and other non-profit religious organizations throughout the United States. It has made approximately 190 loans to over 160 churches approximating $96,842,253. It offers a range of loan types, which include 25/30 year term; 20 year term; three year renewable term, and construction one year term. The Company’s business is managed by the Church Loan Advisors, Inc., which provides investment advisory and administrative services to it.