EX-10.7: COMMITMENT LETTER
EX-10.7 6 y23627exv10w7.txt EX-10.7: COMMITMENT LETTER EXHIBIT 10.7 Capmark Finance Inc. 48 Wall Street, 17th Floor New York, New York 10005 August 8, 2006 VIA FACSIMILE PCAA SP, LLC Parking Company of America Airports, LLC Parking Company of America Airports Phoenix, LLC PCA Airports, Ltd. Attn: Mr. Nicholas Gole c/o Macquarie Securities USA, Inc. 125 W. 55th Street New York, NY 10019 Re: Commitment for a loan in the maximum amount of up to $195,000,000.00 (the "Loan") from Capmark Finance Inc. ("CFI") to PCAA SP, LLC, a Delaware limited liability company, Parking Company of America Airports, LLC, a Delaware limited liability company, Parking Company of America Airports Phoenix, LLC, a Delaware limited liability company, and PCA Airports, Ltd., a Texas limited partnership (collectively, "Borrower") secured by Property located in the locations identified on Exhibit B hereto (collectively with all other collateral for the Loan, the "Property") Ladies and Gentlemen, This letter (this "Commitment Letter") will constitute the commitment of CFI to make the Loan to Borrower, subject to (i) satisfaction of the conditions listed on Exhibit A attached and made a part hereof, and (ii) the terms and conditions of the Application and any amendment to the Application attached to this Commitment Letter (the "Application"), as such terms and conditions have been incorporated, with agreed upon modification, into the draft loan documents previously being circulated by CFI or its counsel and/or being circulated contemporaneously with this Commitment Letter, as such loan documents may be amended as agreed to by the parties (the "Loan Documents"). If there is any inconsistency between the Application and the draft Loan Documents or between this Commitment Letter and such Loan Documents, the Loan Documents shall govern, and in the case of any inconsistency between such draft Loan Documents and the final Loan Documents executed at the closing of the Loan, the final, executed Loan Documents shall govern. Upon the closing of the Loan, such final, executed Loan Documents shall August __, 2006 Page 2 constitute the complete and integrated agreement of Borrower, CFI, any guarantor and environmental indemnitor or any other signatory thereto with respect to the Loan and the Property. Notwithstanding anything contained herein to the contrary, CFI shall have no obligation to make the Loan or any portion thereof, unless and until all of the conditions set forth on Exhibit A attached hereto have been fully satisfied or waived as determined by CFI in its sole and absolute discretion. The conditions and requirements set forth on Exhibit A may expand or otherwise supplement the conditions and requirements set forth in the Application. The absence of any conditions, requirements or other provisions included in the Application from those set forth in Exhibit A does not diminish, reduce or otherwise represent a waiver of any such condition, requirement or provision included in the Application, provided, however, that CFI expressly waives any provisions in the Application which indicate that (i) the Loan is subject to Committee Approval or other underwriting or credit approvals; and (ii) the Application is not a commitment to lend. Please sign this Commitment Letter in the space provided below evidencing your agreement to the terms hereof. This Commitment Letter shall only be binding upon CFI if an original counterpart hereof executed by Borrower is received on or before 5:00 P.M. on August 8, 2006. Sincerely, CAPMARK FINANCE INC. By: /s/ Sal Tarsia ----------------------- Name: Sal Tarsia Title: SVP August __, 2006 Page 3 ACCEPTED AND AGREED: BORROWER: PCAA SP, LLC, a Delaware limited liability company By: PCAA Parent LLC, a Delaware limited liability company, its sole member By: Parking Company of America Airports Holdings, LLC, a Delaware limited liability company, its Managing Member By: Macquarie Americas Parking Corporation, a Delaware corporation, its Managing Member By: /s/ Peter Stokes --------------------- Name: Peter Stokes Title: Vice President PARKING COMPANY OF AMERICA AIRPORTS, LLC, a Delaware limited liability company By: PCAA Parent, LLC, a Delaware limited liability company, its sole member By: Parking Company of America Airports Holdings, LLC, a Delaware limited liability company, its Managing Member By: Macquarie Americas Parking Corporation, a Delaware corporation, its Managing Member By: /s/ Peter Stokes --------------------- Name: Peter Stokes Title: Vice President PCA AIRPORTS, LTD., a Texas limited partnership By: PCAA GP, LLC, a Delaware limited liability company, its general partner August __, 2006 Page 4 By: PCAA Parent, LLC, a Delaware limited liability company, its sole member By: Parking Company of America Airports Holdings, LLC, a Delaware limited liability company, its Managing Member By: Macquarie Americas Parking Corporation, a Delaware corporation, its Managing Member By: /s/ Peter Stokes ---------------------- Name: Peter Stokes Title: Vice President PARKING COMPANY OF AMERICA AIRPORTS PHOENIX, LLC, a Delaware limited liability company By: PCAA Parent, LLC, a Delaware limited liability company, its sole member By: Parking Company of America Airports Holdings, LLC, a Delaware limited liability company, its Managing Member By: Macquarie Americas Parking Corporation, a Delaware corporation, its Managing Member By: /s/ Peter Stokes ---------------------- Name: Peter Stokes Title: Vice President EXHIBIT A 1. The execution and delivery of the documents and instruments substantially identified on the closing checklist previously circulated by Lender's counsel including, without limitation, the Loan Documents, in each case satisfactory to Lender. All Loan Documents shall be executed (to the extent required by Lender) by the party or parties thereto and delivered to Lender and its counsel by a date (the "Delivery Date"), that will allow sufficient time for review to allow funding by August 31, 2006. Notwithstanding, and in addition to the foregoing, (a) those Loan Documents must be executed by all parties thereto and delivered to Lender's counsel on or before the Delivery Date, and (b) duplicate originals of the Loan Documents (and any other documentation) to be recorded must be fully executed (and acknowledged), approved by Lender's counsel and (except for any Financing Statements) delivered into escrow with the title insurance company on or before the Delivery Date. All Loan Documents and any and all other documentation shall be in form, scope and substance reasonably satisfactory to Lender and to Lender's counsel. 2. Lender shall have received and approved the following: (i) all documents in connection with the contemplated interest rate Swap or interest rate Cap Agreement (including, but not limited to, any opinions and a corporate guarantee from PCAA Parent, LLC sufficient to obtain the required Swap or Cap agreement); (ii) a letter of credit in the amount of $380,510.00 if Borrower elects to provide a letter of credit in connection with the replacement reserve; (iii) executed ground lease estoppels in form and substance satisfactory to Lender with respect to certain of the Properties, as agreed to by Lender, (iv) all organizational documents for Borrower and PCAA Parent, LLC, satisfactory to Lender as required in the Loan Documents, (v) surveys of the Property satisfactory to Lender for the portions of the Property subject to prior loans from Lender and the portion of the Property located at 146-246 Haynes, Newark, New Jersey; (vi) title pro formas for the Property satisfactory to Lender for the portions of the Property subject to prior loans from Lender and the portion of the Property located at 146-246 Haynes, Newark, New Jersey; (vii) environmental site assessments for the Property satisfactory to Lender, and (viii) zoning reports for the Property satisfactory to Lender. 3. Except as approved in writing by Lender: a. since the date of the last inspection of the collateral by Lender, no portion of the collateral shall have been materially damaged and not repaired to Lender's satisfaction, or shall have been taken in condemnation or other similar proceedings, or any such proceedings shall be pending; b. since the date of the last inspection of the collateral by Lender, no material change in the structure or physical condition of any portion of the Property has occurred; c. neither Borrower, any guarantor, any indemnitor or any parent company thereto, shall be the subject of any bankruptcy, reorganization or insolvency proceeding; d. no default shall have occurred and be continuing in the performance of any obligation of Borrower, any guarantor, any indemnitor or any parent company thereto in the instruments evidencing, securing or guaranteeing any other loan; e. except as disclosed in the environmental reports required to be delivered in connection with the Loan, no material amounts of asbestos, toxic waste, oil or petroleum spillage or other Hazardous Substances (as defined in the Loan Documents) or other material condition shall exist on the Property; f. the income and expenses of the collateral, and any other features of the transaction contemplated hereby, shall be materially as represented in any documents delivered to, or communications with, Lender in order to induce Lender to make the Loan; g. a material adverse change shall not have occurred with respect to the business operations, properties or financial condition of, Borrower, or any guarantor or indemnitor; h. (a) no other change in facts, events, conditions or circumstances shall occur which may reasonably be expected to cause the Loan to become delinquent or to materially and adversely affect the Loan or collateral or (b) no material adverse change in conditions in the financial, banking or debt capital markets shall occur that could reasonably be expected to materially adversely impair the funding or syndication of the Credit Facilities; and i. all of the information provided by Borrower, any guarantor, any indemnitor or any parent company thereof, or any officers or principals of any of the foregoing, in connection with Borrower's application for the Loan, including but not limited to questionnaires completed by any of the foregoing persons or entities, was materially true and correct on the dates provided and did not omit any material information necessary to render complete and accurate the information provided, and such information will be materially accurate and complete on the closing date, except as Borrower has otherwise disclosed in writing to, and has been approved in writing by, Lender. 4. The loan to value ratio of the property shall not exceed sixty-five percent (65%) at stabilization, as determined by Lender. 5. All fees required by this Commitment Letter or the Application shall have been paid in full. 6. Any and all amounts required to be paid by Borrower on or before the closing date in accordance with the Application or the Loan Documents (including, without limitation, amounts specified by Lender as initial deposits for the escrow and reserve accounts required to be maintained under the Loan Documents (provided, however, Lender shall provide Borrower with a credit at closing for all sums held in escrow and/or reserve accounts under the loans being refinanced by the Loan) and all fees and costs incurred by Lender in connection with the closing, including title insurance premiums and reasonable attorneys' fees) shall have been paid to Lender's designated escrow agent by wire transfer of immediately available funds no later than 12:00 noon New York City time on the closing date. 7. All representations and warranties contained in the Loan Documents shall be true and correct as of the closing date. 8. Without limiting the provisions of 2 above, Borrower shall have delivered prior to closing (i) the original, or a copy certified by the insurance agent, of the policy(ies) of insurance; or (ii) the insurance binder (Accord Form 25S provided by the insurance carrier); or (iii) a certificate of insurance (Accord Form 27 provided by the insurance agent), or (iv) an original letter from the insurance carrier on the primary layer, signed by an officer of such carrier, attaching the form of insurance policy pursuant to which coverage is being provided, and, if applicable, an original letter from each insurance carrier on the excess layers, signed by an officer of such carrier(s) agreeing that it is bound to the form of insurance policy delivered by the primary carrier (i.e., agreeing to "follow form" to the primary carrier). The letter must set forth the date by which the policy will be delivered to the Lender, which must not be more than sixty (60) days following closing. All mortgagee/loss payee/additional insured endorsements must be attached to the letter. EXHIBIT B 1. 3802 Washington Road Atlanta, GA 2. 4099 Genesee Street Buffalo, NY 14225 3. 1399 Stelzer Road Columbus, OH 43219 4. 5100 W. John carpenter Freeway Dallas, TX 5. 56th & Himalaya Denver, CO 6. 18, 24-32, 50, 53, and 110 Ella Grasso Hartford, CT 7. 159 Old County Road Hartford, CT 8. 20 Ella Grasso Hartford, CT 9. 7601 Airport Boulevard Houston, TX 77061 10. 130-24 S. Conduit Jamaica, NY 11. 149-05 131st Street Jamaica, NY 12. 129th & 52nd Street Jamaica, NY 13. 90-10 23rd Ave. Queens, NY 14. 25-85 87th Street Queens, NY 15. 77-15 19th Street Queens, NY 16. 2731 Airways Road Memphis, TN 17. 2303 Democrat Road Memphis, TN 18. 498-512 Carnegie Newark, NJ 19. 175-179 Haynes Newark, NJ 20. 157-173 Haynes Newark, NJ 21. 484-496 Carnegie Newark, NJ 22. 136-160 Carnegie Newark, NJ 23. 47-75 Bessemer Newark, NJ 24. 472-482 Carnegie Newark, NJ 25. 176-192 McClellan Newark, NJ 26. 212-226 McClellan Newark, NJ 27. Rt. 1 & 9 Newark, NJ 28. 146 Haynes Newark, NJ 29. 150 Hegenberger Road Oakland, CA 30. 106-110 Hegenberger Road Oakland, CA 31. 145 98th Avenue Oakland, CA 32. 195 98th Avenue Oakland CA 33. 9655, 9725, 9790, 9791 Empire Oakland, CA 34. 3700 N. Mannheim Chicago, IL 35. 3901 Meridian Oklahoma City, OK 36. 7060 Essington Avenue Philadelphia, PA 19153 37. Mingo Avenue (Sunoco Lease) Philadelphia, PA 19153 38. 7750 Essington Avenue (lease expires 10/31/2006) Philadelphia, PA 19153 39. 3622 E. Washington Blvd. Phoenix, AZ 40. 4040 East Van Buren Phoenix, AZ 41. 701 Flaughtery Rd. Findlay Township, PA 42. Rt. 60 & Flaughtery Rd. Findlay Township, PA 43. 160-196 Produce Avenue (Hanna) San Francisco, CA 44. 160 Produce Avenue (Arata) San Francisco, CA 45. 131 Terminal Ct (GGPT) San Francisco, CA 46. San Mateo & Colma Creek (City of South San Francisco) San Francisco, CA 47. 160 & 190 Produce Avenue (Fee) San Francisco, CA 48. 4607 Airflight Drive St. Louis, MO 63134 - -------------------------------------------------------------------------------- Capmark Finance, Inc. William P. Collopy 230 Half Mile Rd. Senior Vice President Red Bank, NJ 07701 Tel. (732) 758-0004 Fax ###-###-#### [CAPMARK LOGO] June 14, 2006 Mr. Greg Andrews Chief Executive Officer PCAA Parent, LLC 8255 Firestone Blvd., Suite 502 Downey, CA 90241 Re: AviStar/PCAA/SunPark Off Airport Parking Portfolio (the "Property") - ----------------------------------------------------------------------- Dear Mr. Andrews: Capmark Finance, Inc. ("Lender") is pleased to consider your request for financing (the "Loan") secured by the Property and Other Collateral, all as more particularly described below, on the general terms and conditions outlined below: Requested Loan Amount: $195,000,000 for the refinancing of the AviStar/PCAA/SunPark Parking Portfolio. Borrower's Equity: At Loan closing, Borrower will be required to demonstrate a minimum cash investment in the Property of not less than $64,500,000 associated with the refinancing. Borrower's final capital/ownership structure and the use of capital and Loan proceeds will be subject to Lender's approval of Borrower's business plan. Loan Purpose: Refinancing of a 25 property Off-Airport Parking Lot Portfolio. Initial Term: 36 months Extension of Initial Term: 2 Extensions of 12 months each. Each Extension must be exercised by written notice to Lender, which must be received by Lender not more than 90 days and not less than 30 days prior to the then-current maturity date. The First Extension will be made available provided that the following criteria have been satisfied: (a) the underwritten CFbDS provides a DSCR that supports a 1.10x DSCR at 10.09% constant, (b) no event of default exists, (c) Borrower has secured an Interest Rate Cap on the Index or continues to provide a LIBOR Swap Hedge. The Second Extension will be made available provided that the following criteria have been satisfied: (a) the underwritten CFbDS provides a DSCR that supports a 1.20x DSCR at 10.09% constant, (b) no event of default exists. Notwithstanding the above, in the event the DSCR tests above are not satisfied, Borrower may make a principal repayment such that after application of the repayment, said tests are satisfied. Amortization: Interest only. Subject to Lender's additional Performance Criteria Index: The 30-day London Interbank Offered Rate for U.S. Dollar Deposits. On June 5, 2006 the rate reported by Bloomberg is 5.13%. Interest Rate: The Index plus: (1) 190 basis points during the Initial Term; (2) 210 basis points during the first Extension period; and 230 basis points during the second Extension period. The Interest Rate will be adjusted monthly based upon the applicable Index and will be calculated on the actual number of days elapsed and a year consisting of 360 days. Interest Rate Cap: At or prior to closing, Borrower shall purchase an Interest Rate Cap on the Index or an Interest Rate Swap Agreement on the entire projected loan balance for the Initial Term. The Interest Rate Cap or Interest Rate Swap Agreement shall be assigned to Lender as additional collateral, shall be purchased from a financial institution, with a credit rating of at least A-, satisfactory to Lender, and shall be acceptable to Lender in all respects acting reasonably. In the event that Borrower provides any Interest Rate Swap Agreement, Lender
AviStar/PCAA/SunPark Portfolio Page 2 of 13 will escrow at closing the cost of the Agreement. Lender will also require a corporate guarantee from PCAA Parent, LLC. for any shortfalls in the escrow account related to any Interest Rate Swap Agreement. Failure by Borrower to maintain the Interest Rate Swap Agreement shall be an Event of Default. Payments: Monthly payments and the final payment will be due on the ninth day of each month. The interest will be paid partly in arrears and partly in advance. The payment date will be the 9th of the month for interest from the 15th of the previous month to and including the 14th of the payment month. Prepayment: Borrower shall pay a 1% prepayment premium during the first 12 months on any amount prepaid, a 0.50% prepayment premium during months 13-18 on any amount prepaid, unless, in either case, the loan is prepaid by the proceeds from a refinancing by Capmark. Thereafter, the Loan may be prepaid in part or whole without incurring a prepayment premium on any payment date upon 30-days prior written notice. The documentation of this prepayment clause to reflect to SunPark acquisition documents. Cash Flow Available for Debt The Debt Service Coverage Ratio ("DSCR") will Service: be calculated as the ratio of a:b where: a = Net Operating Income for the most recent 12 month period prior to the calculation date less the Replacement Reserve Amount b = Debt Service. Net Operating Income shall be defined as Borrower's Consolidated Lot EBITDA (excluding non-cash items) for the most recent 12 month period prior to the calculation date less a management fee of 1.75% of the Gross Property Revenues. Debt Service, when calculated at the time of closing, shall be defined as $193.0 million multiplied by the actual interest rate on the Loan at closing. At the time of this Loan Request, the interest rate is assumed to be 7.03%, consisting of a 5.13% Index and a 190 basis point spread. Debt Service, when calculated at any other time (Lender's extensions), shall be calculated by applying an 10.09% constant on the outstanding loan balance at that time. At the time of closing, the DSCR shall be no less than both 1.60x actual and 1.10x stressed DSCR at an 10.09% constant and Net Operating Income after the deduction of applicable reserves for replacements shall be not less than $22,241,000, based on the borrowers Pro-Forma LTM, and at stabilization Net Operating Income, after the deduction of applicable reserves for replacements of at least $25,427,000, based on Borrower's Pro-Forma Year Four (4) Operating Statements, as determined by Lender in its sole
AviStar/PCAA/SunPark Portfolio Page 3 of 13 discretion. For other DSCR calculation dates, see "Additional Conditions". Loan to Value: Not to exceed 75% "as-is" and 65% at stabilization at the end of the Initial Term of the Loan as determined by Lender and review of the appraisal report(s), which shall provide a discounted cash flow analysis. Origination Fee: 1% of the principal amount of the Loan. The Origination Fee is earned, due and payable at closing. Exit Fee: No Exit Fee shall be due, however, it is agreed that the Borrower will provide Capmark the right of first and last refusal of any potential refinance opportunities for the subject loan(s) on the portfolio for the first 18 months after closing, unless such refinancing is provided by the parent of the Borrower. In addition, in the event of a sale of the asset(s), Borrower will agree to introduce Capmark via Letter to said prospective buyers for possible financing opportunities. Underwriting Fee: $ 45,000 (non-refundable), payable upon acceptance hereof. Borrower: Borrower will be bankruptcy-remote single purpose entities ("SPE") formed exclusively for the purpose of owning and operating the Property and shall be prohibited from engaging in any other business activity or incurring any other liability or debt, whether secured or unsecured, other than the Loan, Swap Agreement and those associated with routine Property operating expenses and required capital improvements to the Property. A substantive non-consolidation opinion will be required. Significant Loan Party: PCAA Parent, LLC, subject to confirmation of ownership structure and Lender usual and customary due diligence, which may include satisfactory minimum net worth and liquidity covenants. [Need to determine Loan Party] Escrow for Recourse Carveouts: Lender will accept an on-going minimum net worth of $40,000,000, and an on-going minimum liquidity of $3,000,000 to be provided by PCAA Parent, LLC. Net worth shall be the total market value of the total assets of the Significant Loan Party less any liabilities. Liquidity shall be cash or unencumbered, marketable securities. Lien Position and Other A first priority perfected: (a) mortgage, deed Collateral: of trust or deed to secure debt covering the Property; (b) security interest in furniture, fixtures and equipment and all escrow and reserve accounts; and (c) assignment of leases, rents, profits, accounts receivable, other revenues, permits, licenses and contracts with respect to the Property. Non-Recourse: The Loan will be non-recourse to Borrower and its principals except Borrower and Significant Loan Party will retain recourse under the Loan Documents in the event (A) the Property or any part of the
AviStar/PCAA/SunPark Portfolio Page 4 of 13 collateral becomes an asset in (i) a voluntary bankruptcy or insolvency proceeding or (B) any involuntary bankruptcy or insolvency proceeding is commenced by any person or entity (other than by Lender) and Borrower fails to use its best efforts to obtain a dismissal of such proceedings, or (C) Borrower fails to comply with reporting and budget approval covenants in the Loan Documents (see Borrower Reporting). Additionally, Borrower and Significant Loan Party will retain recourse for Lender's losses, expenses and costs, which shall include Lender's costs to enforce its rights and remedies, arising out of the following: (1) fraud or intentional misrepresentation, (2) intentional affirmative waste by the Borrower or its affiliates, (3) gross negligence or criminal acts resulting in forfeiture, seizure or loss of any portion of the Property, (4) misapplication or misappropriation of funds or collateral, (5) liability arising under the Environmental Indemnity, (6) sale or conveyance of the Property or interests in the Borrower in violation of the Loan Documents without the prior written consent of Lender; (7) any material breach of SPE covenants, (8) Lender's enforcement of and collection of any amounts payable under the Loan Documents and Lender protecting its interest in the Property and the Other Collateral, (9) Lender's losses from indemnifying the cash management bank, and (10) Borrower's failure to maintain an interest rate swap agreement or interest rate cap. Environmental Indemnity: Borrower and the Significant Loan Party shall at Borrower's election, either (a) execute an environmental indemnity in form and substance acceptable to Lender or (b) Borrower may provide environmental insurance in form and substance reasonably acceptable to Lender. Borrower Reporting: The Loan Documents will require quarterly, and annual reporting by the Borrower with respect to the Property and Borrower's Business Plan. Lender may request monthly reporting prior to securitization or syndication of the Loan or in the Event of Default. Failure to comply with reporting and budget approval requirements (after expiration of applicable notice and cure periods) will result in a penalty of $5,000 for the first failure, $10,000 for the second failure and $25,000 for the third, and each successive, failure. Notwithstanding the above, the Borrower Reporting requirements shall be consistent with the SunPark transaction. Cross-Collateralization: The properties shall be cross-collateralized and cross-defaulted. Borrower may obtain a release of an individual property by : (a) prepaying the Loan in an amount equal to 125% of the Loan amount allocated to such property, provided that, in no event shall the debt service coverage ratio on the properties remaining be; (i) less than the minimum required DSCR and LTV at closing prior to the commencement of the Performance criteria and, (ii) less than the minimum DSCR required upon the commencement of the Performance Criteria; and (b) paying a 1% prepayment premium within the first 12 months and 0.5% during the months 13 - 18, and
AviStar/PCAA/SunPark Portfolio Page 5 of 13 without penalty thereafter. Borrower shall have a right to the release to an unaffiliated third party of the undeveloped out-parcel at the Oklahoma City lot and Oakland Red subject to Lender's review of the impact of the release with regard to property-level cash flow, LTV, zoning, the lot being a separate tax lot and parcel and updated survey and title. Transfers: Transfers of the Property or legal or direct or indirect beneficial interests in the Property or Borrower and the assumption and/or assignment of the Loan will be allowed subject to Lender's written consent, which shall not be unreasonably withheld or delayed, which may be conditioned upon, among other things: (a) approval by Lender of the proposed transferee's financial condition and management experience for comparable properties; (b) payment of a transfer fee of a minimum of 1/2% of the principal balance of the Loan if all of the Property is transferred; and (c) confirmation from the applicable rating agencies, if applicable, that such transfer shall not result in a downgrade, qualification or withdrawal of the then current ratings of the securities issued pursuant to a securitization which includes the Loan. Notwithstanding the foregoing, subject to the terms and provisions in the Loan Documents, (i) Transfers of Equity Interests which, in the aggregate over the term of the Loan (i) do not exceed forty-nine percent (49%) of the total interests in Borrower or in SPE Equity Owner or in Guarantor, as applicable; (ii) do not result in any Person holding an Equity Interest in Borrower or SPE Equity Owner, as applicable, which exceeds forty-nine percent (49%) of the total Equity Interests in Borrower or in SPE Equity Owner, as applicable; and (iii) do not result in a change of Control shall also be permitted without payment of a fee, and (2) transfers to Macquarie Group members shall be permitted without payment of a fee (other than Lender's reasonable out-of-pocket expenses) and without Lender's consent; and (iii) the "Permitted Transfers" as defined in the SunPark transaction shall be permitted without Lender's consent. Notwithstanding anything contained herein to the contrary, the "transfer" and "control" provision from the SunPark transaction shall be used except to the extent they conflict with this application, including without limitation that Macquarie Infrastructure Company, Inc. ("MIC"), which is the parent of Macquarie Americas Parking Corporation ("MAPC"), which is the parent of PCAA Parent, LLC, is currently a borrower under an Amended and Restated Credit Agreement dated May 9, 2006 among MIC LLC, MIC Inc, the lenders and issuers party thereto and Citigroup North America, Inc., as administrative agent pursuant to which it has pledged its equity interests in MAPC and may in the future seek other credit facilities from other "comparable financial institutions" (collectively, "Creditors") including without limitation, replacements, extensions, modifications, increases of existing credit facilities and/or any new credit facility ("Credit Facilities"). For the purposes of this application and the Loan Documents the term "comparable financial
AviStar/PCAA/SunPark Portfolio Page 6 of 13 institutions" shall mean any Eligible Assignee (as defined in Schedule A attached). In addition, the Loan Documents shall provide therein that Lender consents to any future pledge of MIC's (or any of the Macquarie Group's) equity interest in MAPC to any Creditors to secure any one or more such Credit Facilities, provided, however, such consent shall not be deemed a consent to any transfer of MIC's (or any of the Macquarie Group's) equity interest in MAPC to the Creditors pursuant to any enforcement of such pledge or otherwise. "Macquarie Group" means Macquarie Bank Limited, its direct or indirect subsidiaries and any fund or entity are managed or advised by any direct or indirect subsidiary of Macquarie Bank Limited, or any direct or indirect subsidiary of any such legal entity, provided however the term "advised" shall mean advice in relation to the management of investments of that legal entity which (other than in relation to actually making decisions to implement such advice) is substantially the same as the services which would be provided by a fund manager of the relevant legal entity. "Transfer" shall mean to sell, lease, convey or otherwise dispose of. Deferred Maintenance/Capital Lender may require Borrower to deposit funds at Improvement Reserve: closing into a reserve account equal to 125% of the proposed amount of deferred maintenance/capital improvements for the Property, as determined by Lender, after conducting an inspection of the Property and reviews of the Borrower's Business Plan and the current A&E Report. Disbursements from such reserve will be made by Lender upon completion of the work, delivery of lien waivers, and Lender's approval of the work. Notwithstanding the above, Deferred Maintenance and Capital Improvement Reserves shall be consistent with Lender's prior underwriting. Replacement Reserve: Lender may require an annual reserve per stall for replacements, as determined by Lender, after conducting an inspection of the Property and reviews of the Borrower's Business Plan and the current A&E Report. Borrower will make monthly deposits equal to 1/12th of the annual replacement reserve amount. The replacement reserve will be available to Borrower for qualified capital expenditures. The annual deposit is, subject to underwriting, currently estimated at $10 per stall. Lender will cap the Replacement Reserve in the amount of 125% of Lender's underwritten amount (the "Replacement Reserve Cap"). At such time as payments to the Replacement Reserve, including any accrued interest earned on the Replacement Reserve, equal the Replacement Reserve Cap, payments to the Replacement Reserve shall be suspended. Upon Borrower's draw down of funds from the Replacement Reserve Account, Lender will commence normalized collections of the Replacement Reserve until such time as the Replacement Reserve Cap is reached (including any accrued credited interest earned on the Replacement Reserve Account).
AviStar/PCAA/SunPark Portfolio Page 7 of 13 Subject to Lender's annual inspection and provided that there is no event of default under the Loan, the Replacement Reserve will be capped at $366,550, which shall be provided for in cash or in the form of a letter of credit acceptable to Lender. Lender's underwriting will utilize an amount of no less than $10 per stall Tax/Insurance Reserve: A monthly escrow for insurance, real estate taxes, assessments and, if applicable, ground rents will be required. Evidence of Insurance: Prior to closing, Borrower must provide Lender with evidence of insurance acceptable to the Lender, including, among other things, an original copy of the insurance policy(ies). Such insurance policy(ies) must not have an exclusion for terrorism or terrorist acts. Insurance requirements shall be consistent with Lender's prior transaction. Casualty/Condemnation Subject to Lender's review during underwriting, Insurance: Lender may require Casualty and/or Condemnation Insurance at closing, at Borrower's expense, if tenant has termination rights in the event of a casualty and/or condemnation. If required, this policy will be separate and apart from other forms of insurance required by Lender and shall be in form and substance and from a carrier or insurer acceptable to Lender. Cash Management Account: Lender acknowledges that each property manager makes deposits of all money collected at such property into an account at a local bank no less than twice weekly. Borrower's local bank shall accordingly make deposits of all such cash flow directly to Lender's Cash Management Account, which shall be established at Wachovia Bank, National Association. Deposits in the Cash Management Account will be available to pay real estate taxes, insurance premiums, loan principal and interest payments, property operating expenses, approved capital improvements and required reserves. Provided that Borrower is not in default, all excess cash will be returned to the Borrower The Cash Management Account shall be consistent with Lender's prior transaction. Lease Approval: Lender shall have approval rights for all property operating leases or master leases, excluding immaterial leases. Management Agreement: A cancelable Property Management Agreement acceptable to Lender and subordinate to Lender's mortgage and the Loan will be required. The Management Agreement shall be consistent with Lender's prior transaction. Securitization and Transfer: Borrower shall cooperate with Lender in connection with the sale of the Loan or the securitization of the Loan and obtaining ratings from one or more rating agencies, which cooperation shall include: (i) providing additional information, subject to any contractual
AviStar/PCAA/SunPark Portfolio Page 8 of 13 restrictions, regarding the Property, Borrower or any of its affiliates, any Significant Loan Party, including, without limitation, additional appraisals, environmental reports, engineering reports and similar due diligence materials, and updates, verifications and consents with respect to such materials that were delivered at closing, (ii) supplying such documentation, financial statements, and reports that may be required to comply with Regulation S-X of the federal securities law, (iii) re-executing or making modifications to the Loan Documents or the organizational documents, provided that no such modification, revision, additional documentation, or other action in connection with such cooperation shall adversely affect the Borrower or any other Loan Party, (iv) revising existing opinions or supplying additional opinions reasonably requested by the Lender, (v) delivering additional tenant estoppel letters, subordination agreement or similar agreements and (vi) participating (including senior management of Borrower) in meetings and presentations to the rating agencies and prospective investors, in each case as required by the rating agency or agencies or prospective investors. The Borrower shall bear its own cost (including without limitation costs of its legal counsel) incurred in providing such additional opinions, additional documents, revisions to existing opinions or modifications to the Loan Documents or other actions in connection with such cooperation Lender shall bear all other costs associated with the securitization, including without limitation its legal costs. The cost of providing such additional opinions, additional documents, revisions to existing opinions or modifications to the Loan Documents or other actions in connection with such cooperation shall be borne by Borrower. At the request of Lender, Borrower shall make such representations and warranties as of the date of the securitization as are customary in securitization transactions, review any factual information or disclosures with respect to the Property, Borrower and its affiliates or any Significant Loan Party, which is contained in any private placement memorandum, prospectus, registration statement, or other offering materials relating to any sale or securitization of the Loan, and Borrower and Significant Loan Party, as applicable, shall indemnify Lender against securities liability and any loss or expense incurred as a result of any misstatements or omissions of the Borrower in any written offering material approved by Borrower, its sponsor or parent or any of their affiliates. Any costs or expenses in cooperating with any re-structuring of the Loan shall be borne solely by Lender, to the extent that such costs exceed $5,000. Promissory Notes Structure: Lender shall have the right, in its sole discretion, between the closing of the Loan and a sale or securitization, to require that the Loan be divided into two or more separate (or component) notes, of which the aggregate weighted average coupon rate shall, as of the sale or securitization, equal the initial Interest Rate on the Loan at closing (adjusted, if applicable, to account for amortization), but each of which may have a different interest rate and a different amortization schedule, which notes may be included in separate transactions, including the creation of a mezzanine loan secured by a collateral
AviStar/PCAA/SunPark Portfolio Page 9 of 13 assignment of equity interests in Borrower and/or its affiliates. For portfolios only: Lender shall also have the right to allocate the properties among two or more pools, which will secure one or more of the component notes described above. Not withstanding the foregoing, any costs or expenses in cooperating with any re-structuring of the Loan shall be borne solely by Lender, to the extent that such costs exceed $5,000. Due Diligence Period: Upon acceptance hereof, the Significant Loan Party will or will cause Borrower to promptly deliver to Lender and its legal counsel all materials reasonably requested by Lender and otherwise cooperate in good faith with Lender in order to comply with the terms and conditions hereof and of the Commitment Letter in order to close the Loan. All such deliveries must be received within 30 days from acceptance hereof. Lender will order third party reports from its customary vendors immediately upon acceptance hereof for delivery to Lender by July 10, 2006. Lender will complete its due diligence by July 17, 2006. Pending acceptance by Lender of all third party reports. Lender will endeavor to close and fund the loan within 14 days of the completion of Lender's Due Diligence period, which is currently estimated to be 45 days. Commitment Letter / Loan Promptly following the completion of the Due Closing: Diligence Period, Lender may issue or decline to issue a Commitment Letter to make the Loan or the parties may agree to forego issuance of a Commitment Letter and proceed directly to closing. The issuance of a Commitment Letter and Loan closing are subject to, among other things, (a) receipt of final acceptable third party reports; (b) completion of all underwriting, legal and business due diligence and documentation; (c) Committee Approval; (d) Property inspection acceptable to Lender; and (e) absence of any material adverse change in the Property, Borrower or any Significant Loan Party. The Commitment Letter will be effective for 45 days from the date it is issued. Lender will endeavor to close the loan on or before July 31, 2006, which is 60 days from receipt of the fully executed application letter which shall be accompanied with the appropriate deposits subject to Borrower's prompt delivery of all required due diligence and third party reports as required by Lender. Appraisal: Within the time frame specified herein, Lender must receive an "as is" and "as stabilized" at the end of the Initial Term of the Loan appraisal of the Property. The appraisal must be in form and substance acceptable to Lender and shall be consistent in form and content with the SunPark transaction. A&E Report/Environmental: Within the time frame specified herein, Lender must receive an architectural and engineering report as well as a Phase I
AviStar/PCAA/SunPark Portfolio Page 10 of 13 environmental report (including wetlands, asbestos, radon and toxic mold), in form and substance acceptable to Lender (including from an acceptable vendor). Loan Expenses: Borrower shall pay for all of Lender's reasonable and documented out-of-pocket expenses in connection with the Loan whether or not the Loan closes or a Commitment Letter is issued. Such expenses include, but are not limited to, the cost of title insurance, survey, legal fees, appraisal, seismic report, architectural and engineering report, environmental report, insurance review fees, loan set-up fees (which include establishing reserve accounts), and third party due diligence. In addition, Borrower shall pay all closing costs customary to a transaction of this nature, including, recording fees and taxes and intangible taxes on the note or the debt evidenced by the Loan. Notwithstanding the foregoing and to the extent same is customary in similar loan transactions, at Borrower's request, Lender shall cooperate with Borrower and use commercially reasonable efforts to structure the note(s) and mortgage(s) in a manner that provides Borrower with credit for mortgage taxes previously paid on the mortgages being refinanced. In jurisdictions in which mortgage taxes are assessed, Lender shall limit the face amount of the mortgage upon which mortgage taxes are to be assessed to the greater of (A) 110% of the allocated loan amount; or (B) the amount for which Borrower is able to obtain a credit for mortgage taxes paid on the mortgage being refinanced. Loan Expense Deposit: Upon Borrower's acceptance and execution of this letter, Borrower shall deposit with Lender the sum of $150,000, as an initial deposit, to cover expenses associated with third party reports and fees, legal fees, and other closing costs. In the event a Commitment Letter is not issued or the Loan does not close, this deposit, less costs incurred, will be refunded to Borrower and reports prepared will be provided to the Borrower upon the execution of a Lender prepared Borrower Release Form. If the initial Loan Expense Deposit is insufficient, Borrower may be required to post additional expense funds. To the extent that the Loan does close, any excess Loan Expense Deposit will be credited against other upfront costs associated with the Loan. Loan Documents: The Loan will be evidenced by Lender's customary loan documentation which will include, without limitation, Lender's customary representations and warranties with respect to compliance with legal requirements, including, but not limited to, those related to (a) money laundering and (b) transactions with persons subject to financial sanctions, trade embargoes, economic sanctions and other similar prohibitions under applicable laws provided that such loan documentation shall be subject to reasonable, good faith negotiations by the parties. The terms of the Loan Document's are to be substantially the same
AviStar/PCAA/SunPark Portfolio Page 11 of 13 as the documents utilized in the Sunpark acquisition, unless otherwise indicated in this document. Committee Approval: The issuance of any Commitment Letter or any other undertaking or obligation of Lender to make the Loan is subject to, among other things, the approval of its loan/credit committee. Additional Conditions: 1) Business Plan - Borrower shall submit its Business Plan, which is the financial and operating projections and business objectives for the Property during the term of the Loan. The Business Plan shall include three years of historical operating statements if available, the most recent operating statement, and proforma operating statements for the 10 years looking forward, including at the time of projected stabilization, at the end of the Initial Loan Term. The Business Plan shall also include the proposed budget for tenant improvements, leasing commissions, deferred Property maintenance and interior and exterior capital improvements including, if applicable, any proposed expansion of, or addition to, the Property. The Business Plan shall contain a brief, bullet point discussion of the steps Borrower will implement to take the Property from Loan closing to stabilization. The Loan is specifically subject to the Lender's approval of the Borrower's Business Plan in Lender's sole discretion, not to be unreasonably withheld. 2) Subject to acceptable Property inspections by Capmark, acting reasonably. 3) Subject to Lender's satisfactory review of the Year-To-Date 2006 operating history for the subject properties where applicable and available. 4) Subject to Lender's satisfactory review of any applicable operating agreement or lease on the subject Property to the extent not previously reviewed. 5) Lender's underwriting will be based off the trailing 12-month net operating income for the Properties (Pro-Forma for acquisitions occurring during the trailing 12 month period). 6) Subject to Lender's satisfaction that at the Loan closing, a $193,000,000 takeout loan, at the end of the Initial Loan term, can be underwritten to a 1.20x DSCR at an 10.09% constant based on Lender's satisfactory review of Borrower's proforma operating statements. 7) Lender will utilize actual rents for underwriting in determining periodic underwritten DSCR. The portfolio must satisfy the following Performance Criteria, as determined by Lender during the Loan Term which shall be based on a trailing 12-month operating results basis for all of the properties: Tested quarterly, 1.00x DSCR at 10.09% constant. If the above Performance Criteria are not satisfied Lender will sweep 100% of the net monthly cash flow (after payment of real estate taxes, insurance premiums, Loan principal and interest payments (to the extent then due), property operating expenses, approved capital improvements and required reserves) to either hold as additional collateral against the loan or pay down the Loan to satisfy the
AviStar/PCAA/SunPark Portfolio Page 12 of 13 Performance Criteria. To the extent that the cash is held as additional collateral, such funds shall be released once the Performance Criteria have been achieved. 8) An interest rate cap or interest rate swap agreement shall be required, as determined by Lender during its due diligence. Borrower shall assign all rights relating thereto to Capmark. Capmark will have a right of first refusal to place the Interest Rate cap provided that economic and all other terms meet or exceed third party quotes. 9) Lender reserves the right to split the loan into senior and subordinate pieces, including mezzanine debt collateralized by a pledge of equity interests, and borrower will execute all documents in conjunction therewith.
This letter is not a commitment to lend, either expressed or implied, and does not impose any obligation on Lender to issue a Commitment Letter or to make the Loan, or on the Borrower or any other entity in the Macquarie Group in any respect. The terms and conditions outlined above are not all inclusive, but merely reflect the parties' discussions to date and are subject to change. The contents hereof are confidential and are intended for use exclusively by the parties, their advisors and legal counsel in connection with the Loan from Lender and may not be disclosed to any third party by Borrower or its representatives. To commence processing of your requested financing, please sign and return the enclosed counterpart together with a check in the amount of $195,000 representing a $ 45,000 Underwriting Fee, and a $150,000 Loan Expense Deposit. This letter shall become null and void unless a counterpart of this letter and your check is received by 5:00 PM Eastern time on June 15, 2006. It may be sent via facsimile ###-###-####, provided the original and the required check are received the next business day. IMPORTANT INFORMATION ABOUT PROCEDURES FOR OBTAINING A LOAN: TO HELP THE GOVERNMENT FIGHT THE FUNDING OF TERRORISM AND MONEY LAUNDERING ACTIVITIES, FEDERAL LAW REQUIRES ALL FINANCIAL INSTITUTIONS TO OBTAIN, VERIFY AND RECORD INFORMATION THAT IDENTIFIES EACH PERSON WHO OPENS AN ACCOUNT. TO COMPLY WITH THIS FEDERAL REQUIREMENT, LENDER OR LENDER BANK WILL ASK YOU FOR THE BORROWER'S NAME, PRINCIPAL PLACE OF BUSINESS OR OTHER PHYSICAL LOCATIONS, TAX IDENTIFICATION NUMBER, DOCUMENTS SHOWING THE EXISTENCE OF THE BORROWER, AND OTHER INFORMATION THAT WILL ALLOW THE LENDER TO IDENTIFY YOU. TO HELP THE GOVERNMENT FIGHT THE FUNDING OF TERRORISM AND MONEY LAUNDERING ACTIVITIES, FEDERAL LAW REQUIRES ALL FINANCIAL INSTITUTIONS TO OBTAIN, VERIFY AND RECORD INFORMATION THAT IDENTIFIES EACH PERSON WHO OPENS AN ACCOUNT ITS CUSTOMERS. TO COMPLY WITH THIS FEDERAL REQUIREMENT, LENDER OR LENDER BANK WILL ASK YOU FOR THE BORROWER'S NAME, PRINCIPAL PLACE OF BUSINESS OR OTHER PHYSICAL LOCATIONS, TAX IDENTIFICATION NUMBER, DOCUMENTS SHOWING THE EXISTENCE OF THE BORROWER, AND OTHER INFORMATION THAT WILL ALLOW THE LENDER TO IDENTIFY YOU. WILL REQUEST AND KEEP A RECORD OF INFORMATION THAT IDENTIFIES BORROWER AND ITS PRINCIPALS, INCLUDING, WITHOUT LIMITATION, LEGAL NAMES, PRINCIPAL PLACE OF BUSINESS OR RESIDENCE, TAX IDENTIFICATION OR SOCIAL SECURITY NUMBERS, BIRTH DATES OF INDIVIDUALS, AND DOCUMENTS SHOWING THE LEGAL EXISTENCE OF AN ENTITY. THIS INFORMATION MAY BE SHARED WITH U.S. GOVERNMENT AGENCIES AS REQUIRED BY THE USA PATRIOT ACT. If there are any questions, please contact the undersigned at ###-###-####, fax ###-###-####. Capmark Finance, Inc. By: /s/ William Collopy --------------------- William Collopy Senior Vice President Cc: Dennis S. Owen Vice President Capmark Finance Inc. 48 Wall Street New York, N.Y. 10005 AGREED TO AND ACCEPTED THIS 14TH DAY OF JUNE, 2006. Borrower: By: /s/ Peter Stokes Name: Peter Stokes Title: Chairman AviStar/PCAA/SunPark Portfolio Page 13 of 13 SCHEDULE 1 - List of Properties LOCATION ADDRESS CITY, STATE - -------- ------- ----------- Atlanta, Ga. 3802 Washington Rd. Atlanta, GA 30344 Dallas, Texas 5100 W John Carpenter Fwy Irving, TX, 75063 Phoenix, Ariz. 3622 East Washington St Phoenix, AZ 85034 Phoenix, Ariz. 4040 East Van Buren Phoenix, AZ 85008 Denver, Colo. 19901 E. 56th Avenue Denver, CO 80019 San Francisco, CA 160 Produce Avenue San Francisco, CA 94080 Pittsburgh, Pa. 701 Flaugherty Run Road. Coraopolis, PA 15108 Oakland, Calif. 145 98th Avenue Oakland, CA 94603 Oakland, Calif. 195 98th Avenue Oakland, CA 94603 Memphis, Tenn. 2303 Democrat Rd Memphis TN, 38132 Hartford, Conn. 24 Ella Grasso Tpke Windsor Locks, CT Hartford, Conn. 53 Ella Grasso Tpke Windsor Locks, CT Hartford, Conn. 110 Ella Grasso Tpke Windsor Locks, CT Buffalo, NY 4099 Genesee Street Buffalo, NY 14225 Columbus, OH 1399 Stelzer Road Columbus, OH 43219 Houston, TX 7601 Airport Blvd. Houston, TX 77061 Oklahoma City, OK 3901 South Meridian Oklahoma City, OK 73119 Newark, N.J. 176-192 McClellan Street Newark, NJ 07114 Newark, N.J. 498-512 Carnegie Avenue Newark, NJ 07114 146 Haynes Avenue Newark, N.J. 472 US Highway 1 and 9 Newark, NJ 07114 New York, N.Y. 130-24 South Conduit Avenue Jamaica, NY 11430 New York, N.Y. 23rd Ave. and 90th St. East Elmhurst, NY 11369 Chicago, IL 3700 N. Mannheim Rd. (Leasehold) Franklin Park, IL 60131 Philadelphia, Pa. 7750 & 7060 Essington Ave. Philadelphia, PA 19153 St. Louis, MO 4607 Airflight Drive St. Louis, MO 63134-4128
