CORNERSTONE MINISTRIES INVESTMENTS, INC.
Corporation
AND
COLONIAL TRUST COMPANY
Trustee
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Trust Indenture
Dated as of July 27, 1998
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$3,300,000.00
Series A Certificates of Indebtedness
Due April 15, 2000, 2001, 2002 and 2003
TRUST INDENTURE dated as of July 27, 1998, between CORNERSTONE
MINISTRIES INVESTMENTS, INC., a Georgia corporation
("Corporation"), and COLONIAL TRUST COMPANY, an Arizona
corporation ("Trustee," "Paying Agent," "Registrar" and
"Escrow Agent").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Owners of
the Corporation's Series A Certificates of Indebtedness
("Securities"):
Exhibit 4.5
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GRANTING CLAUSE: The Corporation hereby grants, bargains,
sells, and conveys unto the Trustee, and the Trust hereby
created, all of its right, title and interest in and to the
collateral described in Exhibit "A" attached hereto and made a
part hereof (the "Collateral") and grants a continuing
security interest therein for the purposes herein expressed.
TO HAVE AND TO HOLD the Collateral, together with all the
appurtenances thereto appertaining (said properties, rights,
privileges and franchises including any cash and securities
hereafter deposited or required to be deposited with the
Trustee herein collectively called the "Trust Estate") unto
the Trustee and its successors and assigns forever.
ARTICLE 1 * DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions
"Certificate" means any of the Series A Certificates of
Indebtedness issued pursuant to the terms hereof or any
Certificates issued in the future hereunder.
"Certificate Payment Fund" means the fund created with Paying
Agent into which the Corporation shall pay not less than three
(3) business days prior to any principal and interest paying
date an amount sufficient to make all principal and interest
payments.
"Certificated Security" means a Security represented by a
physical certificate.
"Collateral" means the property as described in Exhibit "A",
whether now existing or hereafter acquired.
"Corporation" means the party named as such in this Indenture
until a successor replaces it and thereafter means the
successor.
"Default" means any event which is, or after notice or lapse
of time or both would be, an Event of Default.
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Obligations" means the principal and interest due and payable
with respect to Certificates issued pursuant to this
Indenture, all expenses and fees of Trustee, Paying Agent and
Registrar, and all debts, liabilities and obligations of the
Corporation to the Trustee and Certificate Owners related to
the Certificates, however evidenced and whether now existing
or hereafter incurred, direct or indirect, matured or not
matured, absolute or contingent, now due or hereafter to
become due (including, without limitation, any and all costs
and attorneys' fees incurred by the Trustee in the collection,
whether by suit or by any other means, of any of the
Obligations) and the extension or renewals of any of the
foregoing.
"Officer" means the Chairman of the Board, the President, any
Vice President, the Treasurer, or the Secretary of the
Corporation.
"Officers' Certificate" means a certificate signed by two
Officers or by an Officer and an Assistant Treasurer or
Assistant Secretary of the Corporation. Sections 10.04 and
10.05.
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"Owner" or "Security Owner" means the person in whose name a
Registered Security is registered on the Registrar's books.
"Non-certificated Securities" means Securities registered as
to ownership in book entry form only.
"Principal" of a Security means the amount stated as principal
on the face of the Security plus, when appropriate, the
premium, if any on the Security.
"Registered Security" means Securities of the Corporation
issued pursuant to this Indenture and fully registered on the
Registrar's books.
"Registered Security Owner" means the registered owner of any
Registered Security.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Certificates, as amended or
supplemented from time to time.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ▇▇.▇▇.
77 aaa et. seq.) as in effect on the date of this Indenture.
"Trust Estate" means the Collateral and any cash and
securities hereafter deposited or required to be deposited
with the Trustee.
"Trustee" means the party named as such in this Indenture
until a successor replaces it and thereafter means the
successor.
"Trust Officer" means the Chairman of the Board, the President
or any other officer or assistant officer of the Trustee
assigned by the Trustee to administer its corporate trust
matters.
Section 1.02. Other Definitions
Term Defined in Section
"Bankruptcy Law" 6.01
"Event of Default" 6.01
"Legal Holiday" 10.08
"Paying Agent" 2.03
"Registrar" 2.03
"U.S. Government Obligations" 8.01
Section 1.03. 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:
"Commission" means the SEC.
"Indenture Securities" means the Securities.
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"Indenture Security Owner" means a Security Owner.
"Indenture to be qualified" means this Indenture.
"Indenture Trustee" or "institutional trustee" means the
Trustee.
"Obligor" on the indenture securities means the Corporation.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute, or
defined by the SEC rule have the meanings assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally
accepted accounting principles;
(3) "or" is not exclusive; and
(4) words in the singular include the plural, and in the
plural include the singular.
ARTICLE 2 * THE SECURITIES
Section 2.01. Form and Dating.
The Securities and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit "B". The
Securities may have notations, legends or endorsements
required by law, stock exchange rule or usage. The Corporation
shall approve the form of the Securities and any notation,
legend or endorsement on them. Each Security shall be dated
the date of its authentication.
Section 2.02. Execution and Authentication.
Two Officers shall sign the Certificated Securities for the
Corporation by facsimile signature. The Corporation's seal
shall be reproduced on the Securities.
If an Officer who signed a Certificated Security no longer
holds that office at the time the Trustee authenticates the
Certificated Security, the Certificated Security shall be
valid nevertheless.
No Certificated Security shall be valid until the Trustee
manually signs the certificate of authentication on the
Certificated Security or authorizes the Registrar to register
the Non-certificated Security in the official registry. The
signature shall be conclusive evidence that the Security has
been authenticated under this Indenture.
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The Trustee shall authenticate Securities for original issue
in the aggregate principal amount of up to $3,300,000 upon a
written order of the Corporation signed by two Officers or by
an Officer and an Assistant Treasurer of the Corporation. The
aggregate principal amount of Securities outstanding at any
time may be increased pursuant to the provisions of Section
9.07 hereof.
Section 2.03. Registrar and Paying Agent.
The Corporation has appointed Colonial Trust Company, whose
address is ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, as
Registrar and Paying Agent. Requests for transfer or exchange
and for payment of Securities shall be made to Colonial Trust
Company at said address.
Section 2.04. Trust Monies.
All monies received as proceeds from the sale of the
Securities and interest accrued thereon from payments made by
the Corporation to Paying Agent into the Certificate Payment
Fund or otherwise ("Trust Monies") shall be deemed part of the
Trust Estate. All Trust Monies shall be held for the ratable
benefit of the Owners of the Certificates. Trust Monies may be
invested in any form of account or deposit insured by
depositor insurance or in interest-bearing obligations issued
by the United States government or any political subdivision
thereof or money market mutual funds consisting solely of such
investments. Paying Agent and/or Trustee may commingle such
Trust Monies with similar funds of other issues, but shall
maintain detailed records to reflect the share thereof
attributable to each issuer. Periodic statements shall be
provided to the Corporation reflecting all receipts and
disbursements of Trust Monies. The Trust Monies shall not be
assignable by the Corporation nor subject to the process of
any court upon legal action by or against the Corporation or
by anyone claiming under or through it. Paying Agent shall
hold in trust for the benefit of Security Owners or the
Trustee all money held by the Paying Agent for the payment of
principal or interest on the Securities, and shall notify the
Trustee of any default by the Corporation in making any such
payment.
Section 2.05. Security Owner Lists.
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 Registered Security Owners who
submit their names and addresses to the Trustee in accordance
with TIA ss. 313(c). If the Trustee is not the Registrar, the
Corporation shall furnish to the Trustee on or before each
semiannual interest payment date 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 name
and addresses of Registered Security Owners.
Section 2.06. Registration, Transfer and Exchange.
The Corporation will issue fully Registered Securities in the
form of Exhibit "B". The Securities will be initially issued
only as Registered Securities.
When a Certificated Security is presented to the Registrar
with a request to register the transfer, the Registrar shall
register the transfer as requested if the requirements of
applicable state law are met. To permit transfers and
exchanges, the Trustee shall authenticate Securities at the
Registrar's request. The Registrar may charge a reasonable fee
for any transfer or exchange but not for any exchange pursuant
to Section 2.09, 3.06 or 9.05.
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Section 2.07. Replacement Securities.
If the Owner of a Certificated Security claims that a
Certificated Security has been lost, destroyed or wrongfully
taken, the Registrar shall issue and the Trustee shall
authenticate a replacement Security. An indemnity bond must be
sufficient in the judgment of the Registrar and the Trustee to
protect the Corporation, the Trustee, the Paying Agent, and
the Registrar from any loss which any of them may suffer if a
Certificated Security is replaced. The Registrar may charge
for its expenses in replacing a Security.
Section 2.08. Outstanding Securities.
Securities outstanding at any time are all Securities
authenticated by the Trustee except for those cancelled by it
and those described in this Section. Securities outstanding
include those held by the Corporation or its affiliates.
If a Security is replaced pursuant to Section 2.07, it ceases
to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Security is held by a
bona fide purchaser.
If the Paying Agent holds on a redemption date or maturity
date money sufficient to pay Securities payable on that date,
then on and after that date such Securities cease to be
outstanding and interest on them ceases to accrue. Such
Securities carry no rights except the right to receive
payment.
The Registered Security Owner shall be treated as the owner of
the Security for all purposes of this Indenture.
Section 2.09. Temporary Securities.
Until definitive Securities are ready for delivery, the
Corporation may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may
have variations that the Corporation considered appropriate
for temporary Securities. Without unreasonable delay, the
Corporation shall prepare and the Trustee shall authenticate
definitive Securities in exchange for temporary Securities.
Section 2.10. Cancellation.
The Corporation at any time may direct the Trustee to cancel
unsold Securities or Securities owned by the Corporation. The
Registrar and the Paying Agent shall forward to the Trustee
any Certificated Securities surrendered to them for transfer,
exchange or payment. The Trustee and no one else shall cancel
and destroy Certificated Securities surrendered for transfer,
exchange, payment or cancellation. The Corporation may not
issue new Securities to replace Securities it has paid or
delivered to the Trustee for cancellation.
Section 2.11. Defaulted Interest.
If and to the extent the Corporation defaults in a payment of
interest on any Registered Securities, it shall pay the
defaulted interest to the persons who are Registered Security
Owners on a
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subsequent special record date. The Corporation shall fix the
record date and payment date. At least thirty (30) days before
the record date, the Corporation shall mail to each Registered
Security Owner a notice that states the record date, the
payment date, and the amount of defaulted interest to be paid.
The Corporation may pay defaulted interest in any other lawful
matter.
Section 2.12. Book Entry Form.
Notwithstanding anything contained herein to the contrary,
each of the Certificates issued hereunder may be issued in
book entry form as a non-certificated Security.
Section 2.13. Escrow of Proceeds.
The proceeds from the sale of the certificates shall be held
in escrow by Trustee as Trust Monies under Section 2.04, and
shall be released to the Corporation in accordance with the
"Use of Proceeds" section of the Prospectus.
ARTICLE 3 l REDEMPTION
Section 3.01. Notices to Trustee.
If the Corporation wants to redeem Securities pursuant to the
terms of the Securities, it shall notify the Trustee of the
redemption date and the principal amount of Securities to be
redeemed. If the Corporation wants to credit against any such
redemption Securities it has not previously directed the
Trustee to cancel, it shall deliver such directions along with
any Certificated Securities to be cancelled. The Corporation
shall give each notice provided for in this Section at least
ten (10) days prior to the proposed date of mailing a notice
of redemption as provided in Section 3.03 hereof.
Section 3.02. Selection of Securities to be Redeemed.
If less than all the Securities are to be redeemed, the
Trustee shall select the Securities to be redeemed by a method
the Trustee considers fair and appropriate. The Trustee shall
make the selection from Securities outstanding not previously
called for redemption. The Trustee may select for redemption
portions of the principal of Securities that have a
denomination larger than $500. Provisions of this Indenture
that apply to Securities called for redemption also apply to
portions of Securities called for redemption.
Section 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption
date, the Corporation shall mail and first publish notice of
redemption as provided in Section 10.02.
The notice shall identify the Securities to be redeemed and
shall state:
(1) the redemption date;
(2) the redemption price as specified in the Securities;
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(3) The name and address of the Paying Agent;
(4) that Certificated Securities called for redemption
must be surrendered to the Paying Agent to collect
the redemption price; and
(5) that interest ceases to accrue on Securities called
for redemption on and after the redemption date.
At the Corporation's request, the Trustee shall give the
notice of redemption in the Corporation's name and at its
expense.
Section 3.04. Deposit of Redemption Price.
On or before the redemption date, the Corporation shall
deposit with the Paying Agent money sufficient to pay the
redemption price of and accrued interest on all Securities to
be redeemed on that date.
Section 3.05. Effect of Notice of Redemption.
Once Notice of redemption is given, Securities called for
redemption become due and payable on the redemption date and
at the redemption price stated in the notice. Certificated
Securities must be surrendered to the Paying Agent. Securities
shall be paid at the redemption price stated in the notice,
plus accrued interest to the redemption date.
Section 3.06. Securities Redeemed in Part.
Upon surrender of a Certificated Security that is redeemed in
part only, the Trustee shall authenticate for the Owner a new
Certificated Security equal in principal amount to the
unredeemed portion of the Certificated Security surrendered.
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ARTICLE 4 l COVENANTS
Section 4.01. Payment of Securities.
The Corporation shall promptly pay the principal of and
interest on the Securities on the dates and in the manner
provided in the Securities. An installment of principal or
interest shall be considered paid on the date it is due if the
Trustee or Paying Agent holds on that date money designated
for and sufficient to pay the installment. To facilitate the
payment of principal and interest, the Corporation has created
with Paying Agent a Certificate Payment Fund into which the
Corporation shall pay not less than three (3) business days
prior to any principal and interest paying date an amount
sufficient to make all principal and interest payments. Paying
Agent will disburse from said fund all payments of principal
and interest on Certificates, Trustee's fees and such other
sums as are provided herein. Paying Agent shall notify the
Corporation of the amounts required to be deposited into said
fund at least five (5) business days prior to any principal
and interest payment date.
The Corporation shall pay interest on overdue principal at the
rate borne by the Securities; it shall pay interest on overdue
installments of interest at the same rate to the extent
lawful.
Section 4.02. Books and Records.
The Corporation covenants and agrees that it will, at all
times and from time to time, permit the Trustee and its agents
or accountants to have access to and to inspect and make
extracts from, the Corporation's books, accounts, papers,
documents and memoranda pertinent to any of the covenants,
conditions and agreements of this Indenture in respect of the
Securities.
Section 4.03. Use of Proceeds.
The Corporation hereby covenants to use the proceeds from the
sale of the Securities in accordance with the terms and
conditions set forth in the Prospectus of the Corporation with
respect to the Securities.
Section 4.04. Corporate Existence.
Subject to Article 5, the Corporation will do or cause to be
done all things necessary to preserve and keep in full force
and effect its corporate existence, rights and franchises;
provided, however, that the Corporation shall not be required
to preserve any right or franchise if it shall determine that
the preservation is no longer desirable in the conduct of the
Corporation's business and that the loss will not be
disadvantageous in any material respect to the Owners.
Section 4.05. Compliance Certificate.
The Corporation shall deliver to the Trustee within 120 days
after the end of each fiscal year of the Corporation an
Officers' Certificate stating whether or not the signers know
of any default by the Corporation in performing its covenants
in Article 4. If they do know of such a default, the
certificate shall describe the default. The certificate need
not comply with Section 10.05. The first certificate shall be
delivered to the Trustee by May 1, 1999.
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Section 4.06. SEC Reports.
The Corporation shall file with the Trustee within 15 days
after it files them with the SEC copies of the annual reports
and of the information, documents, and other reports (or
copies of such portions of any of the foregoing as the SEC may
by rules and regulations prescribe) which the Corporation is
required to file with the SEC pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934. The Corporation also
shall comply with the other provisions of TIA ss. 314(a).
Section 4.07. Collateral.
This Indenture and the Securities are secured by a security
interest, lien, charge or encumbrance on the proceeds of the
offering (cash and investments) and various loans made by the
Corporation which shall be collaterally assigned to the
Trustee for the benefit of the Owners of the Securities. At
all times, the Corporation agrees that the principal balance
of the then outstanding Certificates will be secured by the
proceeds of this offering and loans collaterally assigned to
the Trustee in an amount (combined face value of such cash and
investments and principal balance of all collaterally assigned
loans) not less than the outstanding principal balance of the
then outstanding Certificates. In furtherance of the
foregoing, the proceeds from the sale of the Certificates
shall be segregated and maintained in escrow by Trustee until
used in accordance with the use of proceeds provisions of the
Prospectus. In allocating loans to be collaterally assigned to
the Trustee, the Corporation shall select loans made in
accordance with its then current policies and procedures,
which are fairly representative of the Corporation's entire
loan portfolio. The Corporation shall be entitled to
substitute loans which meet the foregoing requirements from
time to time. The Corporation shall provide to Trustee 120
days following the close of each fiscal year or within 30 days
after written request by the Trustee a certificate of an
executive officer confirming that, as of the date of response,
the Corporation is in compliance with its collateral
obligations hereunder and containing such other details as the
Trustee may reasonably request. Additionally, the Corporation
agrees to execute and deliver to Trustee a separate collateral
assignment of each note and mortgage (which terms shall
include deeds of trust, deeds to secure debt and other
securities instruments) as each loan is made by the
Corporation and execute such other and further assignments and
documents as may be reasonably required by Trustee to evidence
the security interest created hereby in favor of Trustee.
The Trustee shall have no responsibility or obligation to
determine the validity of any lien or Collateral assigned to
the Trustee to secure the Certificates, the priority of the
lien position, the value of the underlying property securing
the lien, the correctness of the documentation evidencing the
lien or the assignment thereof or otherwise. Furthermore, the
Trustee shall have no liability for any loss resulting from
any invalidity or insufficiency in regard to the Collateral,
the collateral documentation or the assignment thereto by the
Corporation.
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ARTICLE 5 * SUCCESSOR CORPORATION
Section 5.01. When Corporation May Merge, etc.
The Corporation shall not consolidate with or merge into, or
transfer all or substantially all of its assets to, another
corporation unless the resulting, surviving or transferee
corporation assumes by supplemental indenture all the
obligations of the Corporation under the Securities and this
Indenture.
ARTICLE 6 * DEFAULTS AND REMEDIES
Default.
Section 601. Events of Default.
An "Event of Default" occurs if:
(1) the Corporation defaults in the payment of interest
on any Security when the same becomes due and payable
and the default continues for a period of sixty (60)
days;
(2) the Corporation defaults in the payment of the
principal of any Security when the same becomes due
and payable at maturity, upon redemption or otherwise
and the default continues for a period of sixty (60)
days;
(3) the Corporation fails to comply with any of its other
agreements in the Securities or this Indenture and
the default continues for the period and after the
notice specified below;
(4) the Corporation pursuant to or within the meaning of
any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian
of it or for any substantial part of its
property;
(D) makes a general assignment for the benefit
of its creditors; or
(E) fails generally to pay its debts as they
become due; or
(5) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Corporation in an
involuntary case;
(B) appoints a Custodian of the Corporation or
for any substantial part of its property; or
(C) orders the liquidation of the Corporation;
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and the order or decree remains unstayed and
in effect for 90 days.
The term "Bankruptcy Law" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code
or any similar Federal or State law for the relief of debtors.
The term "Custodian" mans any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy law.
A default under clauses (1), (2) and (3) above is not an Event
of Default until the Trustee notifies the Corporation of the
default and the Corporation does not cure the default within
ninety (90) days after receipt of the notice. The notice must
specify the default, demand that it be remedied and state that
the notice is a "Notice of Default."
Section 6.02. Acceleration.
If an Event of Default occurs and is continuing, the Trustee
by notice to the Corporation or the Owners of at least a
majority in principal amount of the Securities by notice to
the Corporation and the Trustee may declare the principal of
and accrued interest on all the Securities to be due and
payable immediately. Upon a declaration such principal and
interest shall be due and payable immediately. Notwithstanding
the foregoing, if at any time after the principal of the
Securities has been declared due and payable, all defaults
have been cured and all amounts in respect of which the
Corporation shall be in default, together with the expenses
and reasonable charges of Trustee and reasonable attorneys'
fees with interest at a rate equal to two (2) percentage
points in excess of the highest rate on any of the
Certificates on such expenses, charges and fees, then the
Trustee shall waive such default and its consequences by
written notice to the Corporation.
Section 603. Sale of Collateral.
If an Event of Default has occurred and has not been cured as
provided herein, the Trustee shall have the right, without
further notice to the Corporation, to (i) enter upon and into
the premises of the Corporation without liability for trespass
and to remove all of the Collateral and all books, records,
invoices, and other documentation relating thereto, and (ii)
take possession, hold, operate and manage the Collateral;
however, the Trustee shall not be obligated to take possession
in the event of default. The Trustee may require the
Corporation to assemble or package the Collateral and make it
available to the Trustee at a place to be designated by the
Trustee reasonably convenient to the parties, and in such
event the Corporation agrees to make available to the Trustee
all of the Corporation's facilities for the purposes of
removing or taking possession of the Collateral or putting it
in a saleable form.
The Trustee at its sole option and discretion may, or the
Trustee shall upon receipt of written requests from 50% in
principal amount of all the outstanding Certificates, sell,
assign, lease, or otherwise dispose of the Collateral, in
whole or in part, at public or private sale upon terms and
conditions established by the Trustee. Any notice required to
be given in connection with such disposition shall be given in
accordance with Section 10.02 hereof at least ten (10) days
prior to the proposed sale or other disposition, which amount
of time the parties hereto agree shall be reasonable. The
Trustee need not give such notice, however, with respect to
Collateral which is perishable or threatens to decline
speedily in value or is of a type customarily sold on a
recognized market. At any public sale or disposition of the
Collateral the Trustee shall have the right to bid and become
the purchaser, and to have at its discretion all or any part
of the Obligations credited against the purchase price bid by
the Trustee for the Collateral. The proceeds from any sale or
disposition of the Collateral shall be applied first to all
expenses. In the event any such remaining proceeds are
sufficient to pay the Obligations any surplus shall be
remitted to the Corporation.
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To facilitate the exercise by the Trustee of the rights and
remedies set forth in this Section, the Corporation hereby
constitutes the Trustee or its agents, or any other person
whom the Trustee may designate, as attorney-in-fact for the
Corporation, at the Corporation's own cost and expense, to
exercise all or any of the following powers, which being
coupled with an interest, shall be irrevocable, shall continue
until all Obligations have been paid in full and shall be in
addition to any other rights and remedies that the Trustee may
have: (1) to remove from any premises where they may be
located any and all documents, instruments, files, and records
relating to Collateral and any receptacles and cabinets
containing the same, and at the Corporation's cost and expense
to use such of the personnel, supplies, and space of the
Corporation at its place of business as may be necessary to
properly administer and control the Collateral or the
collections and realizations thereon; (2) to receive, open,
and dispose of all mail related to the Church Loan Fund
addressed to the Corporation and to notify postal authorities
to change the address for delivery thereof to such address as
the Trustee may designate; and (3) to take or bring, in the
Trustee's name or in the name of the Corporation, all steps,
actions, suits, or proceedings deemed by the Trustee necessary
or desirable to effect collection of or to realize upon the
Collateral.
Section 604. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in
equity to collect the payment of principal or interest on the
Securities or to enforce the performance of any provision of
the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them
in the proceedings. A delay or omission by the Trustee or any
Security Owner in exercising any right or remedy accruing upon
an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of
Default. No remedy is exclusive of any other remedy. All
available remedies are cumulative.
Section 6.05. Waiver of Past Defaults.
Subject to Section 9.02 the Owners of a majority in principal
amount of the Securities by notice to the Trustee may waive an
existing Default or Event of default and its consequences.
When a Default or Event of Default is waived, it is cured and
stops continuing.
Section 6.06. Control by Majority.
The Owners of a majority in principal amount of the Securities
may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it. The Trustee,
however, may refuse to follow any direction that conflicts
with law or this Indenture, that is unduly prejudicial to the
rights of other Security Owners, or that may involve the
Trustee in personal liability.
Section 6.07. Limitation on Suits.
A Security Owner may not pursue any remedy with respect to
this Indenture or the Securities unless:
(1) the Owner gives to the Trustee written notice of a
continuing Event of Default;
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(2) the Owners of at least a majority in principal amount
of the Securities make a written request to the
Trustee to pursue the remedy;
(3) such Owner or Owners offer to the Trustee indemnity
satisfactory to the Trustee against any loss,
liability or expense; and
(4) the trustee does not comply with the request within
60 days after receipt of the request and the offer of
indemnity.
A Security Owner may not use this Indenture to prejudice the
rights of another Security Owner or to obtain a preference or
priority over any other Security Owner.
Section 6.08. Rights of Owners to Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Owner of a Security to receive payment of
principal and interest on the Security, or to bring suit for
the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without
the consent of the Owner of the Security.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have
the claims of the Trustee and the Security Owners allowed in
any judicial proceedings relative to the Corporation, its
creditors or its property.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Security Owners for amounts due and unpaid on the
Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts
due and payable on the
Securities for principal and interest, respectively; and
Third: to the Corporation.
The Trustee may fix a record date and payment date for any
payment to Registered Security Owners.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the
suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against
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any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the
party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Owner of Securities pursuant to Section
6.07, or a suit by Owners of more than 10% in principal amount
of the Securities.
ARTICLE 7 l TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is
continuing, the Trustee, which for purposes of this
Article 7 shall include its responsibilities as
Registrar, Paying Agent, Escrow Agent as well as
Trustee, shall exercise its rights and powers and use
the same degree of care and skill in their exercise
as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties
that are specifically set forth in this
Indenture and no others.
(2) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the
truth of the statements and the correctness
of the opinions expressed therein, upon
certificates or opinions furnished to the
Trustee and conforming to the requirements
of this Indenture. The Trustee, however,
shall examine the certificates and opinions
to determine whether or not they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) This paragraph does not limit the effect of
paragraph (b) of this Section.
(2) The Trustee shall not be liable for any
error of judgment made in good faith by a
Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the
pertinent facts.
(3) The Trustee shall not be liable with respect
to any action it takes or omits to take in
good faith in accordance with a direction
received by it pursuant to Sections 6.05 and
6.06.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a),
(b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or
exercise any right or power unless it receives
indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any
money received by it except as otherwise agreed with
the Corporation.
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Section 7.02. Rights of Trustee.
(a) The Trustee may rely on any document believed by it
to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate
any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an opinion of
counsel. The Trustee shall not be liable for any
action it takes or omits to take in good faith in
reliance on an Officer's Certificate or opinion.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any
agent appointed with due care.
(d) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it
believes to be authorized or within its rights or
powers.
(e) The Trustee shall not be responsible for the
sufficiency of the Collateral.
(f) The Trustee assumes no duty to ensure the procuring
of insurance on the Collateral or the payment of
taxes and assessments with respect thereto.
Section 7.03. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be
accountable for the Corporation's use of the proceeds from the
Securities, and it shall not be responsible for any statement
in the Securities, other than its certificate of
authentication, or in any Prospectus used in the sale of the
Securities, other than statements provided in writing by the
Trustee for use in such Prospectus.
Section 7.04. Individual Rights of Trustee, etc.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with
the Corporation with the same rights it would have if it were
not Trustee. Any Paying Agent, Registrar or Co-registrar may
do the same with like rights. The Trustee, however, must
comply with Sections 7.10 and 7.11.
Section 7.05. Notice of Defaults.
If an Event of Default occurs and is continuing, and if it is
known to the Trustee, the Trustee shall mail and first publish
as provided in Section 10.02 notice of the default within 90
days after it occurs. Except in the case of a default in
payment on any Security, the Trustee may withhold the notice
if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the
interests of Security Owners.
Section 7.06 Reports by Trustee to Owners.
Within sixty (60) days after each August 1, beginning with the
October following the date of this Indenture, the Trustee
shall provide to the Security Owners specified in TIA
ss.313(c) a brief report dated as of such August 1 that
complies with TIA ss.313(a). The Trustee also shall comply
with TIA ss.313(b).
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A copy of each report at the time of its mailing to Security
Owners shall be filed with the SEC.
Section 7.07. Compensation and Indemnity.
The Corporation shall pay to the Trustee from time to time
reasonable compensation for its services as set forth in a
separate agreement between the Corporation and Trustee. The
Corporation shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred by it. Such
expenses may include the reasonable compensation and expenses
of the Trustee's agents and attorneys. The Corporation shall
indemnify the Trustee against any loss or liability incurred
by it. The Trustee shall notify the Corporation promptly of
any claim for which it may seek indemnity. The Corporation
shall defend the claims and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel and the
Corporation shall pay the reasonable fees and expenses of such
counsel. The Corporation need not pay for any settlement made
without its consent. The Corporation need not reimburse any
expense or indemnify against any loss or liability incurred by
the Trustee through negligence or bad faith.
To secure the Corporation's payment obligations in this
Section, the Trustee shall have a lien prior to the Securities
on all Trust Monies.
Section 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Corporation. The
Corporation may remove the Trustee at any time, without cause,
by so notifying the removed Trustee. The Corporation or the
Owners of a majority in principal amount of the Securities may
appoint a successor Trustee with the Corporation's consent.
The Corporation or the Owners of a majority in principal
amount of the Securities may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of
the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Corporation shall
promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the Retiring Trustee and to the Corporation.
Immediately after that, the retiring Trustee shall transfer
all property held by it as Trustee to the successor Trustee,
the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Indenture.
A successor Trustee shall give notice of its succession to
each Security Owner as provided in Section 10.02.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring
Trustee, the Corporation or the Owners of a majority in
principal amount of the Securities may petition any court of
competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Security
Owner may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor
Trustee.
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Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust
assets to another corporation, the resulting, surviving or
transferee corporation without any further act shall be the
successor Trustee.
Section 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss.310(a)(1). The Trustee shall have a
combined capital and surplus of at least $500,000 as set forth
in its most recent published annual report of condition. The
Trustee shall comply with TIA ss.310(b), including the
optional provision permitted by the second sentence of TIA
ss.310(b)(9).
Section 7.11. Preferential Collection of Claims Against Corporation.
The Trustee shall comply with TIA ss.311(a), excluding any
creditor relationship listed in TIA ss.311(b). A Trustee who
has resigned or been removed shall be subject to TIA ss.311(a)
to the extent indicated.
ARTICLE 8 l DISCHARGE OF INDENTURE
Section 8.01. Termination of Corporation's Obligations.
The Corporation at any time may terminate its obligation to
pay an installment of principal or interest if it deposits
with the Trustee money or U.S. Government Obligations
sufficient to pay the installment when due. The Corporation
shall designate the installment.
The Corporation at any time may terminate all of its
obligations under the Securities and this Indenture if it
deposits with the Trustee money or U.S. Government Obligations
as provided in the Securities. The Corporation's obligations,
however, in paragraph 10 of the Securities and in Sections
2.04, 2.05, 2.06, 2.07, 7.07 and 7.08 shall survive until the
Securities are no longer outstanding. Thereafter, the
Corporation's obligations in such paragraph 10 and in Section
7.07 shall survive.
Before or after a deposit the Corporation may make
arrangements satisfactory to the Trustee for the redemption of
Securities at a future date in accordance with Article 3.
After a deposit pursuant to the second paragraph of this
Section, the Trustee shall acknowledge in writing the
discharge of the Corporation's obligations under the
Securities and this Indenture except for those surviving
obligations specified above.
An installment of principal or interest shall be considered
paid on the date it is due if the Trustee or Paying Agent
holds on that date money sufficient to pay the installment.
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In order to have money available on payment dates to pay
principal or interest on the Securities, the U.S. Government
Obligations shall be payable as to principal or interest on or
before such payment dates in such amounts as will provide the
necessary money. U.S. Government Obligations shall not be
callable at the issuer's option.
"U.S. Government Obligations" means:
(1) direct obligations of the United States for the
payment of which its full faith and credit is
pledged; or
(2) obligations of a person controlled or supervised by
and acting as an agency or instrumentality of the
United States the payment of which is unconditionally
guaranteed as a full faith and credit obligation by
the United States.
Section 8.02. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Section 8.01. It
shall apply the deposited money and the money from U.S.
Government Obligations in accordance with this Indenture to
the payment of principal and interest on the Securities.
Section 8.03. Repayment to Corporation.
The Trustee shall promptly pay to the Corporation any excess
money or securities held by it at any time. The Trustee shall
pay to the Corporation any money held by it for the payment of
principal or interest that remains unclaimed for two years.
ARTICLE 9 * AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Without Consent of Owners.
The Corporation may amend or supplement this Indenture or the
Securities without notice to or consent of any Security Owner:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to make any changes that do not adversely affect the
rights of any Security Owner; or
(3) to secure additional Certificates issued by the
Corporation hereunder pursuant to Section 9.07
hereof.
The Trustee may waive compliance by the Corporation with any
provision of this Indenture or the Securities without notice
to or consent of any Security Owner if the waiver does not
adversely affect the rights of any Security Owner.
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Section 9.02. With Consent of Owners.
The Corporation may amend or supplement this Indenture or the
Securities without notice to any Security Owner but with the
written consent of the Owners of not less than a majority in
principal amount of the Securities. The Owners of a majority
in principal amount of the Securities may waive compliance by
the Corporation with any provision of this Indenture or the
Securities without notice to any Security Owner. Without the
consent of each Security Owner affected, however, an
amendment, supplement or waiver, including a waiver pursuant
to Section 6.04, may not:
(1) reduce the amount of Securities whose Owners must
consent to an amendment, supplement or waiver;
(2) reduce the rate or extend the time for payment of
interest on any Security;
(3) reduce the principal of or extend the fixed maturity
of any Security;
(4) make any Security payable in money other than that
stated in the Security; or
(5) waive a default on payment of principal or of
interest on any Security.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
A consent to an amendment, supplement or waiver by a Owner of
a Security shall bind the Owner and every subsequent Owner of
a Security or portion of a Security that evidences the same
debt as the consenting Owner's Security, even if notation of
the consent is not made on any Security. Any such Owner or
subsequent Owner, however, may revoke the consent as to his
Security or portion of a Security. The Trustee must receive
the notice of revocation before the date the amendment,
supplement or waiver becomes effective.
After an amendment, supplement or waiver becomes effective, it
shall bind every Security Owner unless it makes a change
described in clauses (2), (3), (4), or (5) of Section 9.02. In
that case the amendment, supplement or waiver shall bind each
Owner of a Security who has consented to it and every
subsequent Owner of a Security or portion of a Security that
evidences the same debt as the consenting Owner's Security.
Section 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Owner of a Certificated
Security to deliver it to the Trustee. The Trustee may place
an appropriate notation on the Certificated Security about the
changed terms and return it to the Owner. Alternatively, if
the Corporation or the Trustee so determine, the Corporation
in exchange for the Certificated Security shall issue and the
Trustee shall authenticate a new Certificated Security that
reflects the changed terms.
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Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or waiver
authorized pursuant to this Article if the amendment,
supplement or waiver does not adversely affect the rights of
the Trustee. If it does, the Trustee may but need not sign it.
The Corporation may not sign an amendment or supplement until
the Board of Directors of the Corporation approves it.
Section 9.07. Future Certificates.
The Corporation shall have the right to issue additional
Certificates to be secured hereby, provided the Corporation is
not in default under any provision of this Trust Indenture.
Such additional Certificates shall be issued pursuant to
resolution duly adopted by the governing body of the Issuer;
provided, however, that the additional Certificates are issued
pursuant to a supplement to this Trust Indenture. An executed
copy of said Supplemental Trust Indenture, signed by the
Corporation and the Trustee, shall serve as a modification of
this Indenture. Such additional Certificates shall be of equal
standing and priority with all other series of Certificates
issued pursuant to this Indenture.
Section 9.08. Release of Collateral.
Upon the written request of the Corporation, the Trustee may,
from time to time, so long as the Corporation shall not be in
default hereunder, release from the lien hereof any
Collateral, (i) in the ordinary course of business upon the
payment or sale of a loan, or (ii) when the amount of
Collateral exceeds the amount required by Section 4.07 hereof,
or (iii) when in its judgment, based upon the Certificate of
some disinterested person selected by the Trustee for purpose
of investigating the question, other property of equal value
is substituted therefor and subjected to the lien hereof, so
that such a release shall not impair the security of the
Security Owners.
ARTICLE 10 * MISCELLANEOUS
Section 10.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or
conflicts with another provision which is required to be
included in this Indenture by the TIA, the required provision
shall control.
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Section 10.02. Notices.
Any notice or communication shall be sufficiently given if in
writing and delivered in person or mailed by first class mail
addressed as follows:
if to the Corporation:
Cornerstone Ministries Investments, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
if to the Trustee:
Colonial Trust Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
The Corporation or the Trustee by notice to the other may
designate additional or different addresses for subsequent
notices or communications.
Any notice or communication to Security Owners shall be
sufficiently given if mailed by first-class mail to each
Registered Security Owner.
Any notice or communication mailed to a Security Owner shall
be mailed to him at his address as it appears on the lists or
registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to give notice or communication to a Security Owner or
any defect in it shall not affect its sufficiency with respect
to other Security Owners. If a notice or communication is
mailed, it is duly given, whether or not the Security Owner
receives or reads it.
Section 10.03. Communication by Owners with Other Owners.
Security Owners may communicate pursuant to TIA ss.312(b) with
other Security Owners with respect to their rights under this
Indenture or the Securities. The Corporation, the Trustee, the
Registrar and anyone else shall have the protection of TIA
ss.312(c).
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Section 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Corporation to the
Trustee to take any action under the Indenture, the
Corporation shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion
of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the
proposed action have been complied with; and
(2) an opinion of counsel stating that, in the opinion of
such counsel, all such conditions precedent have been
complied with.
Each opinion of counsel shall be in writing. The legal counsel
who renders it may be an employee of or counsel to the
Corporation. The legal counsel shall be acceptable to the
Trustee.
Section 10.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall
include:
(1) a statement that the person making such certificate
or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the
statements or opinions contained in such certificate
or opinion are based;
(3) a statement that, in the opinion of such person, he
has made such examination or investigation as is
necessary to enable him to express an informed
opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been
complied with.
Section 10.06. When Securities Disregarded.
In determining whether the Owners of the required principal
amount of Securities have concurred in any direction, waiver
or consent, Securities owned by the Corporation or by a
person, directly or indirectly controlling or controlled by or
under direct or indirect common control with the Corporation
shall be disregarded, except that for the purposes of
determining whether the Trustee shall be protected in relying
on any such direction, waiver or consent, only Securities
which the Trustee knows are so owned shall be so disregarded.
Also, subject to the foregoing only, Securities outstanding at
the time shall be considered in any such determination.
Section 10.7. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for the administration
of this Indenture. Such rules may cover matters relating to
actions by or a meeting of Security-Owners. The Paying Agent
or Registrar may make reasonable rules for its functions.
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Section 10.8. Legal Holidays.
A "Legal Holiday" is a Saturday, Sunday, a legal holiday or a
day on which banking institutions are not required to be open.
If a payment date is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue for
the intervening period.
Section 10.9. Governing Law.
This Indenture and the Securities shall be governed by the
laws of the State of Georgia.
Section 10.10. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Corporation. Any such indenture,
loan or debt agreement may not be used to interpret this
Indenture.
Section 10.11. No Recourse Against Others.
As described in the Securities, all liability of any director,
officer, employee or stockholder, as such, of the Corporation
is waived and released.
Section 10.12. Successors.
All agreements of the Corporation in this Indenture and the
Securities shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
Section 10.13. Duplicate Originals.
The parties may sign any number of copies of this Indenture.
Each sign copy shall be an original, but all of them taken
together represent the same agreement.
SIGNATURES
Dated: July 27, 1998 CORNERSTONE MINISTRIES
INVESTMENTS, INC.
By:______________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary
(SEAL)
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Dated: July 27, 1998 COLONIAL TRUST COMPANY
By:_______________________________________
Name:
Attest: Title:
----------------------------------
Assistant Trust Officer (SEAL)
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EXHIBIT "A"
COLLATERAL
The proceeds of the offering of the Series A Certificates of
Indebtedness to be held in escrow by Trustee (including the securities and
investments and other investments thereof) and the loans as determined from time
to time by the Corporation which are collaterally assigned to Trustee as
provided herein.