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Eron Lenders
Project Name: Caesars Lakeshore Estates Ltd.
Lender update
July 29, 1998
Further to our letter dated December 22, 1997 we are writing to update you on the status of the above noted mortgage.
Project Status
This project is a $7,094,445 first mortgage on approximately 273 acres of property development on the west-side of Okanagan Lake. The mortgage went into default and the Judicial Trustee proceeded with a foreclosure action on January 15, 1998.
Subsequent to the foreclosure action an agreement has been reached (the "Standstill Agreement") between the borrower, Caesars Lakeshore Estates Ltd. ("Caesars" or the "Borrower") and the lenders being PricewaterhouseCoopers Inc., in its capacity as Judicial Trustee and Ceasar's Landing Estates Ltd.
The Standstill Agreement effectively extends the current mortgage, which expired on November 13, 1997 to January 1, 1999. The terms of the Standstill Agreement are summarized as follows:
The borrower agrees to owe the following amounts as at April 1, 1998
Principal $ 7,094,445
Accrued interest 588,008
Renewal fee 183,750
Total $ 7,866,203
For agreeing to postpone the foreclosure action, the borrower agrees to pay an additional $100,000 extension fee upon final execution of the agreement.
The borrower agrees to make $40,000 interest payments per month applying retroactively to May 15, 1998.
The renewal fees of $183,750, as indicated above, are to be paid by the borrower as follows:
Upon execution of agreement $ 100,000
August 15, 1998 50,000
January 1, 1999 33,750
Total renewal fee $ 183,750
The balance of the renewal fees owed of $33,750, the accrued interest as at April 1, 1998 of $588,008 and the $100,000 in renewal fees, totalling $721,758 are secured by:
- Promissory note executed by the borrower;
- a new second mortgage on the property for $721,758 accruing interest at 12% per annum expiring on January 1, 1999;
- a personal and corporate guarantee of the borrower; and
General Security Agreement.
The original mortgage and the new second mortgage both expire on January 1, 1999.
Lender Communications
We have established a web site at http://www.eron-pwl.com. On this site you will find project specific updates as well as related court orders. We will continue to communicate directly with all lenders. We urge you to take advantage of the web site so that you can receive first hand current information from PWL in the most cost effective manner we have available.
We will issue another letter as soon as we have significant new information to report. We have worked closely with the Caesar's Lender Committee and expect to do so in the future. In the meantime, if you have any specific questions or information concerning the project please contact us in writing at the Price Waterhouse Centre, 601 West Hastings Street, Vancouver, BC, V6B 5A5 or by fax at (604) 688-6128 marked to the attention of Caesars Lakeshore - Project Lead.
Yours truly
Judicial Trustee
PricewaterhouseCoopers Inc.
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