Exhibit 10.256
ALLSTATE LIFE INSURANCE COMPANY XX XXX XXXX
XXXXXXXX XXXXX XXXXX, XXXXX X0X
XXXXXXXXXX, XXXXXXXX 00000
July 21, 0000
Xxx Xxx Xxxxxx LLC
0000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Re: Allstate Life Insurance Company
Loan No. 122497
Tollgate Marketplace
Route 24 and Xxxxx 0
Xxx Xxx, Xxxxxxxx (the "Property")
Ladies and Gentlemen:
Reference is made to our Commitment Letter dated June 23, 2004, as amended
(the "Commitment") with respect to a $39,765,000 Loan (the "Loan") to INLAND BEL
AIR SPE, L.L.C., a Delaware limited liability company, to be evidenced by a
Mortgage Note (the "Note") of even date herewith in the principal amount of the
Loan, guaranteed by an Indemnity Guaranty from BEL AIR SQUARE LLC, a Maryland
limited liability company ("Bel Air"), 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"), Bel Air
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 Bel Air 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) Bel Air 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, Bel Air either pays for a tax reporting service or
Bel Air promptly and consistently furnishes evidence that taxes are being
currently paid; and (iv) Bel Air 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 Bel Air 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. BEL AIR'S RIGHT TO TRANSFER THE PROPERTY. Notwithstanding the
provisions contained in Section 1.08 and other applicable provisions of the Deed
of Trust, Bel Air 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 Bel Air 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 Bel Air 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 Bel Air 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 and Bel Air 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 Bel Air 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 Bel Air 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 Bel Air 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 1ess than 225 percent;
(g) the Permitted Transferee paying to Bel Air 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 Bel Air's expense) specifically
confirming a loan to value ratio of no more than 60 percent.
In addition, Bel Air 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 Bel Air under the Loan Documents, to make a Permitted Transfer to
Inland Western Retail Real Estate Trust, Inc. ("IWEST"), an indirect owner of
Bel Air, so long as (x) Bel Air pays to Lender a transfer fee equal to $5,000,
(y) IWEST, assuming, in form and substance satisfactory to Lender, all
obligations of Bel Air under the Loan Documents, including, without limitation,
the Environmental Indemnity Agreement, with the same degree of recourse
liability as Bel Air 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 Bel Air.
5. RIGHT TO CHANGE OWNERSHIP INTERESTS IN BEL AIR. 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. Lender hereby 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. A number of tenant estoppel letters report that
the parking lot disrepair and roof leaks. Borrower shall, on or before January
1, 2005, and in a manner and with results that are reasonably satisfactory to
Lender, make necessary parking lot repairs and appropriate roof repairs to
remedy any active roof leaks (the "Repairs"). Additionally, pursuant to that
certain Estoppel Certificate dated as of May 18, 2004, executed by Xx-Xxx
Stores, Inc., an Ohio corporation, ("Xx-Xxx"), Borrower shall also make certain
repairs to a crack in the dry wall on the rear exterior of the premises rented
by Xx-Xxx ("Xx-Xxx Repairs" together with Repairs shall hereinafter be
collectively referred to as "Repairs"). Borrower's agreement to effect the
Repairs shall be governed by this Letter Agreement. Borrower's failure to effect
the Repairs on or before January 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.
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9. RIGHTS PERSONAL TO BEL AIR. The rights granted to Bel Air in
paragraphs 2, 3, 4, 5, 6, and 7 of this Letter Agreement shall be personal to
Bel Air 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 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 Bel Air, and Bel Air'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:
BEL AIR SQUARE LLC
a Maryland limited liability company
By: /s/ [ILLEGIBLE]
--------------------------------
Name: [ILLEGIBLE]
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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
x/x Xxxxxxxx Xxxxxxxxxxx, XXX
Xxxxxxxx Xxxxx Xxxxx, Xxxxx X0X
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Commercial Mortgage Division
Re: Allstate Life Insurance Company
Loan No. 122497
Tollgate Marketplace
Route 24 and Xxxxx 0
Xxx Xxx, Xxxxxxxx (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 BEL AIR SQUARE 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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