POST OFFICE BOX 2066
[LOGO OF FIRST REPUBLIC BANK] M0NROE, LOUISIANA 71207-2066
318-388-3990
1220 NORTH 18TH STREET
September 16, 1998
Mr. & Mrs. Fred Bayles
The Biltmore Group, L.L.C.
507 Trenton Street
West Monroe, LA 71291
Dear Joanne and Fred:
The attached draft Business Loan Agreement and Construction Loan Agreement will
serve as the basis for First Republic Bank's (FRB) construction loan on the
Biltmore's Minden project. Other terms or lending conditions not specifically
described in these agreements are as follows:
1. Loan Maturity will be one year from the date of closing
2. A variable interest rate at 1.45% over Wall Street Journal Prime
will be charged. If closed today, the initial rate would be 9.95%.
Interest is to be paid monthly.
3. An origination fee of $13,520 plus closing cost up to $3,000 for a
total of $16,520 are included in the loan amount of $1,368,520.
4. The initial disbursement will be used to payoff FRB loan #3009653
with a current principal balance of $202,000. This loan was
originally incurred for the purchase of the Minden site and start
up costs involving the Biltmore projects.
5. A limited guarantee of $500,000 each will be required from Joanne
Caldwell Bayles and The Forsythe Group, Inc.
6. An assignment of life insurance of $500,000 each from Fred Bayles
and Joanne Caldwell Bayles to FRB will be required.
7. A performance bond of $1,350,000 is in place through Patterson
Insurance Company of Shreveport for this construction project.
8. Title insurance in the amount of the loan is required.
9. Acceptable inter-creditor agreements are to be worked our among
First Republic Bank, The Biltmore Group, L.L.C., MMR Investment
Bankers, and Colonial Trust Company. Our legal representative is
Tom Allen, telephone number 318-322-9499, and he has been asked to
contact Mr. Morgan and Mr. Carroll.
10. FRB will hold a co-first lien on 5.72 acres in Webster Parish, LA with
Colonial Trust Company, as trustee for the benefit of the bondholders
of The Biltmore Group, LLC. FRB will retain as separate collateral
the 4.28 acres remaining on the Minden site along with other
security previously pledged by the Bayles' entities. It is not
anticipated that any title work or new recordings will be required
with this latter described category of collateral.
OFFICES LOCATED IN RAYVILLE - MONROE - WEST MONROE - RUSTON
MEMBER F.D.I.C. [EEO LENDER LOGO]
The Biltmore Group, L.L.C.
Page 2
11. Borrower shall enter into, prior to closing, a Standard Owner's Fixed
Price Contract for the Minden Project, which is satisfactory to FRB.
12. FRB is agreeing to finance the Minden project to the extent noted in
these documents. It is recognized that Church Loan and Investments
will likely be the construction lender on the next three or four
projects involving the $9.9 million bond offering through MMR
The bank shall be furnished with any other such loan documentation as
it deems necessary for its protection and in order to document the loan
and to create and perfect the FRB's security interest in the collateral
for the loan. All such loan documentation is subject to review and acceptance
by bank's counsel.
This type financing is a new step for FRB and we look forward to working with
all the groups involved to successfully accomplish this undertaking. Please
contact me at 1-800-388-5510 if additional information is needed.
Sincerely,
/S/BILL CRAWFORD
William M. CRAWFORD
Executive Vice President
WMC/el
Enclosures
Copy to: Mr. Tom Allen
Mr. Jerry Martin
Mr. Gerald Morgan
Mr. Clay Carroll
The Forsythe Group, Inc.
TO WHOM IT MAY CONCERN
In the event the proceeds from the sale of the Bonds for the Minden,
Louisiana Arbor, owned by The Biltmore Group, L.L.C. are insufficient
to retire the Construction Loan at their maturities, then The Forsythe
Group, Inc., will purchase the Construction Lender's loan and will give
the Company the option of renewing and extending the Construction Loan
into permanent loan amortized over thirteen years subject to the Company
being current on all its outstanding debt obligations.
Joanne M. Caldwell-Bayles
President
/s/JOANNE M CALDWELL-BAYLES
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2-5-99
507 Trenton Street West Monroe, Louisiana 71291 (318) 323-2115
Fax (318) 323-6281