CHURCH LOANS & INVESTMENTS TRUST
(A Real Estate Investment Trust)
October 26, 1998
The Biltmore Group of Louisiana, L.L.C.
507 Trenton
W. Monroe, LA 71291
Re: $1,220,000 Interim Loan (Bastrop, LA)
Gentlemen:
This will constitute the commitment of Church Loans & Investments Trust
("Church Loans") to loan to The Biltmore Group, W. Monroe, LA ("Borrower")
the sum of $1,220,000, or any amount less than that amount as the Borrower
may need less any title insurance, appraisal costs, mortgage registration
tax and all other closing costs and expense that may be incurred by Church
Loans in connection with the funding and collection of the loan.
The loan is to be made pending the offering of bonds by the Borrower
through MMR Investment Bankers ("MMR") as provided hereinafter.
The loan will be for a term of one year and will bear interest on the
unpaid principal at a variable rate which would be equal to 1.5% per annum
in excess of the "Prime Rate" of interest as published by the Wall Street
Journal under the heading "Money Rates". The minimum rate of interest
will not be less than the initial rate of interest. Interest shall be
paid monthly upon the first day of each month during the term of the loan.
Both principal and any unpaid interest on the loan will be due at maturity.
The loan will be repaid from the first bond proceeds subject only to
the payment of various broker/dealer fees.
Funds advanced upon this loan will be used to construct an assisted care
facility located on the north side of Cooper Lake Rd, at intersection of Boswell
and Nancy, Bastrop Louisiana.
5305 I-40 West PO Box 8203 Amarillo, TX 79114-8203
(806)358-3666 (800)692-1111 Fax (806)358-1430
The Biltmore Group, L.L.C.
W. Monroe, LA
October 26, 1998
This commitment shall be subject to the following conditions:
1. That the Borrower pay to Church Loans, in addition to the interest
on the loan as described above, a commitment fee equal to 2% (two
percent) of the principal amount of the funds to be advanced to the
Borrower under the terms of this commitment. One-half of the total
commitment fee (ie. $12,200.00) shall be remitted with this signed
commitment letter. Although such commitment fee is due and payable
upon the Borrower's acceptance and execution of this commitment
letter, as a convenience to the Borrower, Church Loans will allow
the balance of the commitment fee to be paid at closing from the
proceeds of the loan. However, in the event that you decide not to
proceed to close this loan for any reason, the balance of the
commitment fee is due and owing by you to Church Loans and the amount
already paid is non-refundable. Such fee is not interest, but is
paid and payable to Church Loans to induce Church Loans to enter
into this loan commitment and to compensate Church Loans for making
available the funds necessary to fund the entire amount of the
committed loan whether or not such amount is advanced.
2. That the Borrower pay in advance the sum of $250.00 which is the
title insurance cancellation fee in the event the Borrower decides
not to accept the commitment after title work has begun. Upon
closing this fee will be used to offset other closing expenses. This
sum should be remitted with this signed commitment letter. The
closing of your loan will normally be enhanced if our law firm
orders the title insurance from title companies that have had
experience in dealing with our closings. If possible, we would
recommend that you allow our legal counsel to place the order for
the title insurance. Our legal counsel will order the title
insurance as soon as they have a correct legal description for the
property.
3. That upon acceptance of this commitment the Borrower shall
deposit with Church Loans the additional sum of $2,500.00 which
are the legal fees to be incurred by Church Loans in connection with
the loan. This amount should be remitted with this commitment
letter.
4. That the loan shall be secured by a first mortgage lien and security
interest upon all the Borrower's real estate, buildings and
facilities, both existing and to be constructed with the proceeds of
this loan. Such property shall be subject to no prior liens or
encumbrances.
5. That the loan will be made pursuant to a loan agreement entered into
by the Borrower and Church Loans consistent with the terms of this
commitment and such other normal covenants of the Church Loans'
basic loan agreement.
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The Biltmore Group, L.L.C.
W. Monroe, LA
October 26, 1998
6. That a mortgage title insurance policy in the face amount of not less
than the total amount of the loan be issued by a title insurance
company acceptable to Church Loans, insuring the fact that Church
Loans is the owner and holder of a good and valid first lien mortgage
upon the real estate securing the loan as described in paragraph 4
above.
7. That the total loan will not exceed 66 2/3% of the total appraised
value of the real estate given to secure the loan. Such appraisal
will be completed by an appraiser acceptable to Church Loans and
must (a) be a FIRREA-conforming appraisal and (b) be certified to
comply with the standards of Church Loans and be submitted for
approval prior to advancement of any funds. Such appraisal shall be
rendered by an appraiser who, among other things, shall have: (a)
appraised the real estate at not more than the fair market value
thereof; (b) appraised the value of the improvements on the real
estate at not more than the depreciated cost thereof; and (c)
considered in making such appraisal the likelihood of deterioration
of the neighborhood in which the real estate and improvements are
located. The qualifications of the appraiser and references,
preferably banks and insurance companies, should be submitted with
the appraisal.
8. That the Borrower enter into a bond offering agreement with MMR
under the terms of which MMR shall assist the Borrower in the
offering upon a best efforts basis bonds of the Borrower in an
amount not less than $1,800,000 of which the first proceeds after
the payment of the expenses of the offering and an initial sinking
fund reserve of $90,000.00 shall be used to retire this loan. The
effective date of this bond offering shall be not more than 90 days
after the date of the note securing this loan. Effective date is the
date the bonds are first offered for sale.
9. That the promissory note evidencing the loan be guaranteed by the
Forsythe Group, Inc. so that $500,000 of the total amount of the
loan is guaranteed upon guaranty forms furnished by Church Loans.
10. That the loan be closed on or before sixty days from the date hereof.
11. That during the term of the loan the Borrower shall agree to
periodically supply Church Loans with financial statements and
reports, as requested by Church Loans.
12. That Church Loans must review and approve all legal documents prior
to closing.
13. That a representative of Church Loans conduct an on-site inspection
of the property to be given by the Borrower to secure the loan.
The expense of this inspection shall be borne by the Borrower.
3
The Biltmore Group, L.L.C.
W. Monroe, LA
October 26, 1998
14. That a Phase One environmental site assessment will be completed
prior to closing by an engineering firm acceptable to Church
Loans certifying that the property is free and clear of any
environmental problems and that the property is in compliance with
all current laws and regulations regarding such environmental
assessment.
15. That the Borrower require the contractor to furnish to Church Loans
an original policy providing builder's risk coverage in an amount
not less than the amount of this loan. Church Loans is to be listed
as mortgagee. An original copy of the policy evidencing such
coverage must be furnished prior to funding.
16. That the Borrower furnish to Church Loans an original copy of an
insurance policy providing fire & extended coverage on the Borrower's
property in an amount not less than the amount of this loan. Church
Loans is to be listed as mortgagee. The original policy evidencing
such coverage must be furnished prior to funding.
17. That the Borrower secure a fixed-price contract for the new
construction in an amount not to exceed $1,260,000. No changes
or modifications will be made to this contract without the expressed
written consent of Church Loans. Construction draws will be
processed once each month using normal and customary AIA Construction
Progress Draw forms.
18. Notwithstanding the above, if regulatory approval of the bond
offering requires changes in the bond offering, bond offering
procedures, prospectus, interim loan, repayment of the interim
loan or otherwise, which such changes materially effect the interim
loan, the method and time of repayment of the interim loan or the
likelihood of repayment of the interim loan, in the sole judgment
of Church Loans, then Church Loans may, at its option, revoke this
commitment without liability for same.
19. You also should be aware that once all of our requirements and the
requirements of our legal counsel are met for the closing of the
loan, we must have three business days to deliver the funds to the
closing agent. Once all closing requirements have been met, our
legal counsel will notify our office and the actual closing can be
scheduled in accordance with the above-mentioned time requirements.
4
The Biltmore Group, L.L.C.
W. Monroe, LA
October 26, 1998
The acceptance of this commitment must be indicated by the Borrower's
signing and returning the original copy of this commitment letter within
fifteen (15) days from the date hereof. The acceptance of this commitment
will be the Borrower's authorization for Church Loans to withhold from
the proceeds of any loan any premiums for the purchase of title insurance,
appraisal costs and other closing costs which are to be paid which are
associated with the loan. This commitment is conditioned upon the loan
being closed on or before December 26, 1998. Any extension of this commitment
will be subject to terms which may be mutually agreed upon at the time
of extension.
We look forward to working with you in connection with this transaction.
Sincerely yours,
/S/KELLY ARCHER
Kelly Archer
Manager of Operations
KA/ja
The above commitment has been agreed to and accepted by the undersigned
Officers of The Biltmore Group of Louisiana, L.L.C., W. Monroe, LA.
Date: 11-9-98
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The Biltmore Group of Louisiana L.L.C.
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by /S/Joanne Caldwell-Bayles
- ---------------------------------- -------------------------------------
Managing Member
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5
CHURCH LOANS & INVESTMENTS TRUST
(Real Estate Investment Trust)
January 27, 1999
The Biltmore, Group of Louisiana, LLC
Attn: Joanne Caldwell-Bayles
507 Trenton St
West Monroe, LA 71291
Re: Bastrop, LA Project
Dear Mrs. Caldwell-Bayles:
Reference is made to the loan agreement made by Church Loans & Investments
Trust ("Church Loans") to The Biltmore Group of Louisiana, LLC ("Borrower")
FBO: Bastrop, LA dated November 24, 1998. This will serve as an addendum
to that original loan agreement.
The addendum is as follows:
1. That should the proceeds from the sale of the bonds through MMR
Investment Bankers ("MMR") and other participating broker/dealers,
after the payment of the expenses associated with the bond offering
and the establishment of the first six months sinking fund
reserve, be insufficient to pay the unpaid principal and interest
upon the loan committed herein at its maturity, at the option of
the Borrower the term of said loan shall be renewed and extended by
Church Loans as follows:
(a) The term of the loan shall be initially renewed and
extended for an additional period of one (1) year upon the
following terms and conditions:
(1) The Borrower shall be current upon all of its
outstanding debt obligations, to include, but not
necessarily restricted to all sinking fund payments
payable to the trustee in correction with the bonds
to be offered through MMR and other participating
broker/dealers, and all interest payments upon the
loan to be made by Church Loans to the Borrower
under the terms of this commitment.
5305 1-40 West PO Box 8203 Amarillo, TX 79114-8203
(806)358-3666 (800)682-1111 Fax (806)358-1430
The Biltmore Group of Louisiana, LLC
Attn: Joanne Caldwell-Bayles
West Monroe, LA
January 27, 1999
Page 2
(2) The amount of the loan to be renewed and extended
shall be the lesser of (i) the unpaid principal upon
the loan committed herein at maturity, or (ii) the
unpaid principal amount of all unsold bonds offered
through MMR and other participating broker/dealers
described above. Any principal amount of the loan
in excess of the amount of the unsold bonds must be
paid in full by Borrower.
(3) The interest rate upon the loan shall be at a
variable rate equal to 2% per annum in excess of the
"Prime Rate" of interest published by the Wall Street
Journal under the heading "Money Rates".
(4) The interest upon the unpaid principal balance of
the loan shall be payable monthly.
(5) The principal upon the loan shall be paid on or
before one year from date.
(6) The Borrower shall pay Church Loans a loan extension
fee equal to 2% (2 points) of the principal amount
of the loan.
(7) The total amount of the loan extended and the sold
bonds shall not exceed 66 2/3% of the appraised
market value of the collateral.
(b) If on the maturity of the one year extension, November 1,
2000, should the proceeds from the sale of the bonds to be
offered by the Borrower through MMR and other participating
broker/dealers be insufficient to pay the unpaid principal
and interest upon the loan, then, at the option of the
Borrower, the principal amount of the loan extended in
regard to the Bastrop issue, shall be renewed and extended
by Church Loans into a permanent loan upon the following
terms and conditions:
(1) The Borrower shall be current upon all of its
outstanding debt obligations, to include, but not
necessarily restricted to all sinking fund payments
payable to the trustee in connection with the bonds
to be offered through MMR and other participating
broker/dealers, and all interest payments upon the
loan to be made by Church Loans to the Borrower
under the terms of this commitment.
The Biltmore Group of Louisiana, LLC
Attn: Joanne Caldwell-Bayles
West Monroe, LA
January 27, 1999
Page 3
(2) The permanent loan shall bear interest at the same
rate as described in paragraph (a) (3) above.
(3) The amount of the permanent loan shall be payable in
equal, or as equal as possible due to the variable
rate of interest on the loan, monthly installments of
principal and interest over a period of thirteen
years, however, the loan shall be due and payable in
full, with interest, at the date of the final
maturity of the bonds. Borrower shall have the right
of the Borrower to prepay the loan at any time
without penalty.
(4) The Borrower shall pay to Church Loans an additional
loan renewal fee equal to 5% (5 points) of the
principal amount of the permanent loan.
(5) The loan shall continue to be secured on an equal
basis with the outstanding bonds to be issued by the
Borrower through MMR and other participating
broker/dealers upon all property to be given by the
Borrower to secure the loan committed herein.
(6) The total amount of the loan and sold bonds shall
not exceed 66 2/3% of the appraised market value of
the property.
(c) Until such time as the loans committed herein are paid in
full, the Borrower shall not further encumber the property
securing the payment of said loans, either by placing
additional mortgages or deeds of trust upon said property,
or by increasing the indebtedness of the Borrower under any
Trust Indenture, mortgage or deed of trust or other security
documents associated with the sale of bonds secured by
said property, Should the Borrower additionally encumber
the property securing the loans committed hereby prior to
their payment in full, Church Loans shall have the right
to declare the unpaid principal and interest upon said loans
immediately due and payable upon thirty days notice to the
Borrower.
(d) The term "bonds" as used herein shall mean and refer to the
series of bonds dedicated to the Bastrop, Louisiana project.
The Biltmore Group of Louisiana, LLC
Attn: Joanne Caldwell-Bayles
West Monroe, LA
January 27, 1999
Page 4
The acceptance of this addendum must be indicated by the Borrower's signing
and returning the original copy of this letter within fifteen (15) days
from the date hereof.
Sincerely yours,
/S/KELLY ARCHER
Kelly Archer
Manager of Operations
The above addendum has been agreed to and accepted by the undersigned
Managing Member of The Biltmore Group of Louisiana, LLC.
Date:
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