Exhibit 10.268
ALLSTATE LIFE INSURANCE COMPANY
ALLSTATE PLAZA SOUTH, SUITE G5C
NORTHBROOK, ILLINOIS 60062
July 21, 2004
Towson Circle LLC
0000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Re: Allstate Life Insurance Company
Loan No. 122495 and 000000
Xxxxxx Xxxxxx
Xxxxxxx Valley & Joppa Roads
Towson, Maryland (the "Property")
Ladies and Gentlemen:
Reference is made to our Commitment Letter dated July 7, 2004, as
amended (the "Commitment") with respect to a $19,197,500 Loan (the "Loan") to
INLAND TOWSON 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
$15,647,500 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 $3,550,000,
guaranteed by an Indemnity Guaranty from TOWSON CIRCLE LLC, a Maryland limited
liability company ("Towson"), which in turn is secured by a Fee and Leasehold
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"),
Towson 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 Towson 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) Towson 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;
(ii) at Lender's election, Towson either pays for a tax reporting service or
Towson promptly and consistently furnishes evidence that taxes are being
currently paid; and (iv) Towson 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 Towson 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
Xxxxxx's reasonable opinion such coverage is generally required by other
institutional lenders.
4. TOWSON'S RIGHT TO TRANSFER THE PROPERTY. Notwithstanding the
provisions contained in Section 1.08 and other applicable provisions of the Deed
of Trust, Towson 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 Towson 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 Towson 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 Towson 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 Towson 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 Towson 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 Towson 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 Towson 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 Towson 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 Towson'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, Towson 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 Towson under the Loan Documents, to make a Permitted Transfer to
Inland Western Retail Real Estate Trust, Inc. ("IWEST"), an indirect owner of
Towson, so long as (x) Towson pays to Lender a transfer fee equal to $5,000, (y)
IWEST, assuming, in form and substance satisfactory to Lender, all obligations
of Towson under the Loan Documents, including, without limitation, the
Environmental Indemnity Agreement, with the same degree of recourse liability as
Towson and subject to the same exculpatory provisions, and (z) the conditions
and requirements set forth in subparagraphs 4(b), (d) and (c) 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 Towson.
5. RIGHT TO CHANGE OWNERSHIP INTERESTS IN TOWSON. 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. RIGHTS PERSONAL TO TOWSON. The rights granted to Towson in
paragraphs 2, 3, 4, 5, 6, and 7 of this Letter Agreement shall be personal to
Towson 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
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Letter Agreement. Lender will send a copy of its letter of transmittal and the
enclosure to Towson, and Towson'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:
TOWSON CIRCLE LLC,
a Maryland limited liability company
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------
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. 122495 and 000000
Xxxxxx Xxxxxx
Xxxxxxx Valley & Joppa Roads
Towson, 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 TOWSON CIRCLE 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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