W2007 Grace Acquisition I, Inc. (fka WGCBP)

[goldcanyon341]

From PDF page 83

http://www.chimicles.com/wp-content/uploads/2013/10/As-Filed-Supplemental-Memo-in-Further-Support-of-Preliminary-Approval-H0040733xCF4AF.pdf

What is the present value without the 15% discount?

LA_LAN01:276681.14A
and excluding any Preferred Return (as defined below)
that may be received in connection with the Class A
Interests (the “Estimated Proceeds over Time from th
e ARC Transaction”). We estimate the present value
(applying a 15% discount rate) of the Estimated Proceeds over Time from the ARC Transaction plus the
Preferred Return, would be approximately $19.10 per share to the holders of the Preferred Stock, including
PFD Holdings (the “Estimated Present Value of Pro
ceeds from the ARC Transaction”). The Estimated
Present Value of Proceeds from the ARC Transaction
assumes that interest is collected monthly and 50%
of the Initial Capital Contribution is collected 36 months after the closing of the ARC Transaction in
February, 2015 and the remaining 50% of the Initial Capital Contribution is collected 48 months after the
closing of the ARC Transaction in February, 2015
. Both the Estimated Proceeds over Time and the
Estimated Present Value of Proceed
s from the ARC Transaction exclude
(i) any value attributed to the
Excluded Hotel Assets, (ii) any cash, other workin
g capital assets and liabilities of the Company which
might otherwise result in a distribution to holders of the Preferred Stock in connection with the liquidation
of the Company and (iii) any tax effects which may be
applicable to proceeds received by the Company.
Assuming the proceeds that would be received in resp
ect of the Excluded Hotel
Assets equal the $116.9
million allocated to such Hotels by the ARC Buyers pursuant to the Original Sale Agreement less $3.9
million of transaction expenses (
not taking into account in each cas
e any present value discount), the
Company estimates that the potential proceeds in respect of such Hotels would result in less than $0.60 per
share of Preferred Stock (the “Est
imated Excluded Hotel Assets Procee
ds”). The sum of the Estimated
Proceeds over Time from the ARC Tr
ansaction and the Estimated Exclud
ed Hotel Assets Proceeds would
be less than $22.30 per share of Preferred Stock. The sum of the Estimated Present Value of Proceeds from
the ARC Transaction and the Estimated Excluded Hotel Assets Proceeds would be less than $19.70 per
share of Preferred Stock.
While the Sellers expect to sell the Excluded Hotel A
ssets at some point after the closing of the ARC
Transaction, there can be no assurance when or whethe
r the Excluded Hotel Assets will be sold, the form of
consideration which may be received in respect of the
Excluded Hotel Assets or whether the consideration,
if any, will be greater or less than
the purchase price allocated to the Excluded Hotel Assets in the Original
Sale Agreement.