Exhibit 10.262
ALLSTATE LIFE INSURANCE COMPANY
ALLSTATE PLAZA SOUTH, SUITE G5C
NORTHBROOK, ILLINOIS 60062
July 21,2004
Gateway Village LLC
0000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Re: Allstate Life Insurance Company
Loan No. 122493 and 122494
Gateway Village
Housely Road and Defense Highway
Annapolis, Maryland (the "Property")
Ladies and Gentlemen:
Reference is made to our Commitment Letter dated June 23, 2004, as
amended (the "Commitment") with respect to a $31,458,000 Loan (the "Loan") to
INLAND GATEWAY SPE, L.L.C., a Delaware limited liability company, to be
evidenced by a Mortgage Note A ("Note A") of even date herewith in the amount of
$27,233,000 and a Mortgage Note B ("Note B", and together with Note A, either
the "Note" or the "Notes") of even date herewith in the amount of $4,225,000,
guaranteed by an Indemnity Guaranty from GATEWAY VILLAGE LLC, a Maryland limited
liability company ("Gateway"), which in turn is secured by an Indemnity Deed of
Trust, Assignment of Leases, Rents and Contracts, Security Agreement and Fixture
Filing of even date herewith (the "Deed of Trust") encumbering the Property.
Initially capitalized terms used but not otherwise defined in this letter
agreement (the "Letter Agreement") have the same meanings given them in the Deed
of Trust.
In consideration of the execution and delivery of the documents
evidencing, securing or otherwise pertaining to the Loan (the "Loan Documents"),
Gateway and we ("Lender") hereby agree as follows:
1. RELATED AGREEMENT. This Letter Agreement shall constitute a
Related Agreement.
2. IMPOUNDS. With regard to the provisions contained in
Section 1.06 of the Deed of Trust requiring Gateway to deposit 1/12 of the
annual amounts of real estate taxes, regular and special assessments and
insurance premiums, Lender hereby agrees to defer collection of such monthly
deposits for so long as (i) Gateway is the sole fee simple owner of the
Property; (ii) no Event of Default exists under the Loan Documents and no
condition or event exists which with notice, the passage of time, or both, would
constitute an Event of Default; (iii) at Lender's election, Gateway either pays
for a tax reporting service or Gateway promptly and consistently furnishes
evidence that taxes are being currently paid; and (iv) Gateway promptly and
consistently furnishes evidence that insurance premiums are being currently
paid.
3. EARTHQUAKE INSURANCE. With regard to the provisions contained in
Section 1.02 of the Deed of Trust requiring Gateway obtain earthquake insurance
coverage on the Property, Lender hereby agrees to waive such requirement until
such time as such coverage is available at commercially reasonable rates and in
Lender's reasonable opinion such coverage is generally required by other
institutional lenders.
4. GATEWAY'S RIGHT TO TRANSFER THE PROPERTY. Notwithstanding the
provisions contained in Section 1.08 and other applicable provisions of the Deed
of Trust, Gateway shall have a one time right, provided there is no default or
an event which, with notice or the passage of time, or both, could result in a
default by Gateway under the Loan Documents, to assign, sell or transfer all of
the Property (the "Permitted Transfer") to a party with experience, reasonably
satisfactory to Lender, in managing property similar to the Property and whose
financial condition is reasonably satisfactory to Lender ("Permitted
Transferee"). The Permitted Transfer shall be further conditioned upon:
(a) the payment by Gateway to Lender of a transfer fee equal to one
percent of the outstanding principal balance of the Note (a nonrefundable $5,000
deposit toward such transfer fee shall be due at the time Gateway initially
requests a Permitted Transfer, the balance of the transfer fee shall be due on
the closing of the transaction);
(b) the reimbursement of all of Xxxxxx's expenses, including legal
fees, incurred in connection with the Permitted Transfer;
(c) the Permitted Transferee and such general partners or principals
of Permitted Transferee as Lender may request, assuming, in form and substance
satisfactory to Lender, all obligations of Borrower and Gateway under the Loan
Documents, including, without limitation, the Environmental Indemnity Agreement
and the Nonrecourse Exception Indemnity Agreement, with the same degree of
recourse liability as Borrower and Gateway and subject to the same exculpatory
provisions;
(d) Xxxxxx's receipt of a title policy complying with the
requirements of the Commitment, updated to the date of the Permitted Transfer,
evidencing that such Permitted Transfer will not adversely affect Xxxxxx's first
and prior lien on the Property or any other rights or interests granted to
Lender under the Loan Documents;
(e) Xxxxxx's receipt of opinions of counsel acceptable to Lender
that all previous opinions, pertaining to Gateway and Borrower are true with
respect to the Permitted Transferee and the Permitted Transferee has duly
assumed the Loan Documents, and same are valid and enforceable against Permitted
Transferee and the Property; and that Gateway has the requisite power and
authority to properly transfer the Property;
(f) the Property having maintained a Debt Coverage Ratio of not less
than 225 percent for the 12 month period ending 30 days before the date of the
Permitted Transfer and the Property having a projected Debt Coverage Ratio for
the next 12 months based on the most recently approved and certified financial
statements and annual rent roll of not less than 225 percent;
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(g) the Permitted Transferee paying to Gateway at least 40 percent
cash down payment on the date of the Permitted Transfer;
(h) Xxxxxx's receipt and approval of the purchase and sale contract
and copies of the proposed transfer documentation;
(i) Xxxxxx's receipt and approval of the Permitted Transferee's
resume and financial statements; and
(j) Xxxxxx's receipt and approval of an updated MAI appraisal by an
appraiser satisfactory to Lender (prepared at Gateway's expense) specifically
confirming a loan to value ratio of no more than 60 percent; and
(k) Note B has been paid in full.
In addition, Gateway shall have the right, provided there is no default
or an event which, with notice or the passage of time, or both, could result in
a default by Gateway under the Loan Documents, to make a Permitted Transfer to
Inland Western Retail Real Estate Trust, Inc. ("IWEST"), an indirect owner of
Gateway, so long as (x) Gateway pays to Lender a transfer fee equal to $5,000,
(y) IWEST, assuming, in form and substance satisfactory to Lender, all
obligations of Gateway under the Loan Documents, including, without limitation,
the Environmental Indemnity Agreement, with the same degree of recourse
liability as Gateway and subject to the same exculpatory provisions, and (z) the
conditions and requirements set forth in subparagraphs 4(b), (d) and (e) above
are satisfied.
Net Operating Income shall be certified to be true and correct by the
managing general partner, manager or chief financial officer of Gateway.
5. RIGHT TO CHANGE OWNERSHIP INTERESTS IN GATEWAY. Notwithstanding
the provisions contained in Section 1.08 and other applicable provisions of the
Deed of Trust, so long as IWEST maintains its status as a Real Estate Investment
Trust (a "REIT"), any encumbrance, security interest or assignment or transfer
of ownership of all types and classes of the shares of IWEST shall not
constitute an improper encumbrance or transfer.
6. INSURANCE. Lender hereby approves the insurance evidenced by the
certificates attached as EXHIBIT A hereto.
7. PROPERTY MANAGER. Xxxxxx xxxxxx approves Inland Northwest
Management Corp. as manager of the Property, subject to its execution of the
letter attached as EXHIBIT B hereto.
8. REPAIR OBLIGATION. Pursuant to that certain Tenant Estoppel
Certificate ("Estoppel"), dated as of July 14, 2004, executed by Petsmart, Inc.
a Delaware corporation ("Petsmart"), Gateway has certain obligations to repair
certain roof leaks as referenced in Section 6(i) of the Estoppel. Gateway shall,
on or before January 1, 2005, and in a manner and with results that are
reasonably satisfactory to Lender, make the necessary repairs to the roof to
remedy any active roof leaks (the "Repairs"). Gateway's agreement to effect the
Repairs shall be governed by this Letter Agreement. Gateway's failure to effect
the Repairs on or before January
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1, 2005, in a manner and with results that are reasonably satisfactory to Lender
shall be an Event of Default under the Note, the Deed of Trust and other Related
Agreements.
9. RIGHTS PERSONAL TO GATEWAY. The rights granted to Gateway in
paragraphs 2, 3, 4, 5, 6, and 7 of this Letter Agreement shall be personal to
Gateway and shall not inure to the benefit of any subsequent owner of the
Property. In the event Lender transfers all or any part of the Loan or any
interest in the Loan Documents to any other person or entity, Xxxxxx agrees to
notify such transferee(s) of the existence of this Letter Agreement and the fact
that it is binding upon Xxxxxx's successors and assigns by delivering such
transferee(s) a true, correct and complete copy of this Letter Agreement
concurrently with such transfer accompanied by a letter of transmittal from
Lender advising such transferee(s) of the binding nature of the provisions of
this Letter Agreement. Lender will send a copy of its letter of transmittal and
the enclosure to Gateway, and Gateway's name will be shown on the face of the
original letter of transmittal as an addressee thereof.
Very truly yours,
ALLSTATE LIFE INSURANCE COMPANY
an Illinois insurance corporation
By:
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By:
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Its Authorized Signatories
Accepted and agreed:
GATEWAY VILLAGE LLC,
a Maryland limited liability company
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Authorized Person
Dated: July 21, 2004
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EXHIBIT A
INSURANCE CERTIFICATES
EXHIBIT B
PROPERTY MANAGER LETTER
INLAND NORTHWEST MANAGEMENT CORP.
July 21,2004
Allstate Life Insurance Company
c/o Allstate Investments, LLC
Allstate Plaza South, Suite G5C
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Commercial Mortgage Division
Re: Allstate Life Insurance Company
Loan No. 122493 and 122494
Gateway Village
Housely Road and Defense Highway
Annapolis, Maryland (the "Property")
Ladies and Gentlemen:
The undersigned ("Manager") is the current property manager of
the Property pursuant to that certain Management Agreement (the "Agreement")
dated July 21, 2004, by and between GATEWAY VILLAGE LLC, a Maryland limited
liability company ("Owner") and Manager. In consideration of your making the
Loan to Owner (Manager being an affiliate of Owner), Manager acknowledges and
agrees to the following;
1. Allstate, in its sole discretion, may terminate the Agreement by
notice to Manager upon acquisition by Allstate of title to the
Property by foreclosure, deed in lieu of foreclosure, or other
transfer of the Property or upon Allstate otherwise obtaining
possession of the Property by any lawful means. Upon the
appointment of a receiver or court appointed officer, either
Allstate or such receiver or officer may terminate the Agreement
in its sole discretion by notice to Manager.
2. Manager waives any right to create a lien against the Property
to secure payment of unpaid management fees.
3. Upon the occurrence of, and during the continuation of, a
default under any of the documents evidencing the Loan which has
not been cured in Allstate's sole judgment, all management fees
paid or payable to Manager thereafter shall be subordinate to
amounts owed to Allstate under such Loan documents.
4. Upon the occurrence of, and during the continuation of, a
default under any of the documents evidencing the Loan which has
not been cured in Allstate's sole judgment, all management fees
and other sums received by Manager thereafter in connection with
management of the Property shall be held in trust for the
benefit of Allstate.
5. Until Allstate elects to terminate the Agreement as provided
herein, Manager will perform all of its obligations, covenants,
conditions and agreements under the Agreement for the benefit of
Allstate and its successors and assigns, so long as Allstate
performs the duties and obligations of Owner under the Agreement
accruing after the date Allstate exercises its rights under the
Deed of Trust.
INLAND NORTHWEST MANAGEMENT CORP.
By:
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Its
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