Exhibit 10.251
ALLSTATE LIFE INSURANCE COMPANY
XXXXXXXX XXXXX XXXXX, XXXXX X0X
XXXXXXXXXX, XXXXXXXX 00000
July 14, 2004
Inland Western Seattle Northgate North, L.L.C.
0000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Re: Allstate Life Insurance Company
Loan No. 122504
Northgate North
000 XX Xxxxxxxxx Xxx
Xxxxxxx, Xxxxxxxxxx (the "Property")
Ladies and Gentlemen:
Reference is made to our Commitment Letter dated July 13, 2004, as
amended (the "Commitment") with respect to a $26,650,000 loan (the "Loan") to be
evidenced by a Deed of Trust Note of even date herewith, payable to Allstate
Life Insurance Company, in the principal amount of the Loan (the "Note") and to
be secured by a 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 your execution and delivery of the documents
evidencing, securing or otherwise pertaining to the Loan (the "Loan Documents"),
you (the "Borrower") and we (the "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 Borrower 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
(a) Borrower is the sole fee simple owner of the Property; and (b) 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;
and (c) at Lender's election, Borrower either pays for a tax reporting service
or Borrower promptly and consistently furnishes evidence that taxes and
insurance are being currently paid.
3. EARTHQUAKE INSURANCE. With regard to the provisions contained in
Section 1.02 of the Deed of Trust requiring Borrower 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. BORROWER'S RIGHT TO TRANSFER THE PROPERTY. Notwithstanding the
provisions contained in Section 1.08 and other applicable provisions of the Deed
of Trust, Borrower 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 Borrower 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 Borrower 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 Borrower 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 Lender'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 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 subject to the same exculpatory provisions;
(d) Lender'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 Lender's first and prior
lien on the Property or any other rights or interests granted to Lender under
the Loan Documents;
(e) Lender's receipt of opinions of counsel acceptable to Lender that
all previous opinions, pertaining to 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 Borrower 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;
(g) the Permitted Transferee paying to Borrower at least 40 percent
cash down payment on the date of the Permitted Transfer;
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(h) Lender's receipt and approval of the purchase and sale contract
and copies of the proposed transfer documentation;
(i) Lender's receipt and approval of the Permitted Transferee's resume
and financial statements; and
(j) Lender's receipt and approval of an updated MAI appraisal by an
appraiser satisfactory to Lender (prepared at Borrower's expense) specifically
confirming a loan to value ratio of no more than 60 percent.
In addition, Borrower 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 Borrower under the Loan Documents, to make a Permitted Transfer to
Member, the sole member of Borrower, so long as (x) Borrower pays to Lender a
transfer fee equal to $5,000, (y) the Member assumes, in form and substance
satisfactory to Lender, all obligations of Borrower under the Loan Documents,
including, without limitation, the Environmental Indemnity Agreement, with the
same degree of recourse liability as Borrower 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 Borrower.
5. RIGHT TO CHANGE OWNERSHIP INTERESTS IN BORROWER. Notwithstanding
the provisions contained in Section 1.08 and other applicable provisions of the
Deed of Trust, so long as Member 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 Member shall not
constitute an improper encumbrance or transfer.
6. DAMAGE TO PROPERTY. With regard to the provisions contained in
Section 1.04(A) of the Deed of Trust requiring Borrower to notify Lender of
damage to the Property, the cost threshold for notification shall be increased
to One Hundred Thousand Dollars ($100,000). With regard to the provisions
contained in Section 1.04(B) and 1.04(C) of the Deed of Trust regarding the
estimated cost of restoration, the threshold amounts shall be increased to Two
Hundred Fifty Thousand Dollars ($250,000).
7. INSURANCE. Lender hereby approves the insurance evidenced by the
certificates attached as EXHIBIT A hereto.
8. PROPERTY MANAGER. Lender hereby approves INLAND NORTHWEST
MANAGEMENT CORP. as manager of the Property, subject to its execution of the
letter attached as EXHIBIT B hereto.
9. RIGHTS PERSONAL TO BORROWER. This Letter Agreement shall be
binding upon Borrower and its successors and assigns, except that the rights
granted to Borrower in paragraphs 2 -- 8 of this Letter Agreement shall be
personal to Borrower 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, Lender agrees
to notify such transferee(s) of the existence of this Letter Agreement and the
fact that it is binding upon
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Lender'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 Borrower, and
Borrower'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:/s/ [ILLEGIBLE]
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By:/s/ [ILLEGIBLE]
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Its Authorized Signatories
Accepted and agreed:
INLAND WESTERN SEATTLE NORTHGATE
NORTH, L.L.C., a Delaware limited liability company
By: INLAND WESTERN RETAIL REAL ESTATE
TRUST, INC., a Maryland corporation,
Its sole member
By: /s/ [ILLEGIBLE]
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Its: Asst. Secretary
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Dated: July ___, 2004
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EXHIBIT A
INSURANCE CERTIFICATES
EXHIBIT B
PROPERTY MANAGER LETTER
INLAND NORTHWEST MANAGEMENT CORP.
July ___, 2004
Allstate Life Insurance Company
Xxxxxxxx Xxxxx Xxxxx, Xxxxx X0X
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Commercial Mortgage Division
Re: Allstate Life Insurance Company
Loan No. 122504
Northgate North
000 XX Xxxxxxxxx Xxx
Xxxxxxx, Xxxxxxxxxx (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
June 30, 2004, by and between INLAND WESTERN SEATTLE NORTHGATE NORTH, L.L.C., a
Delaware 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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