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Exhibit 10.36
ALLSTATE INSURANCE COMPANY
ALLSTATE PLAZA SOUTH, SUITE G5C
NORTHBROOK, ILLINOIS 60062
January 5, 2004
Inland Southeast Stony Creek, L.L.C.
2901 Butterfield Road
Oakbrook, Illinois 60523
Re: Allstate Insurance Company
Loan No. 122397
Stoney Creek Marketplace
17130 Mercantile Boulevard, Noblesville, Indiana (the "Property")
Ladies and Gentlemen:
Reference is made to our Commitment Letter dated December 16, 2003, as
amended (the "Commitment") with respect to a $14,162,000 loan (the "Loan") to be
evidenced by a Mortgage Note (the "Note") of even date herewith, payable to
Allstate Insurance Company in the principal amount of the Loan and to be secured
by a Mortgage, Assignment of Leases, Rents and Contracts, Security Agreement and
Fixture Filing of even date herewith (the "Mortgage") 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
Mortgage.
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 (collectively, "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 Mortgage 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 Mortgage 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
Mortgage, Borrower shall have a
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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
200 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 200 percent;
(g) the Permitted Transferee paying to Borrower at least 40 percent cash
down payment on the date of the Permitted Transfer;
(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
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(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
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a Maryland corporation
("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
Mortgage, 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. 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. 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 -- 7 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 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.
* * * * *
[Signature Page Follows]
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INV
LAW
Very truly yours,
ALLSTATE INSURANCE COMPANY,
an Illinois insurance corporation
By: /s/ Heather [ILLEGIBLE]
----------------------------------
By: /s/ [ILLEGIBLE]
----------------------------------
Its Authorized Signatories
Accepted and agreed:
INLAND SOUTHEAST STONY CREEK, L.L.C.,
a Delaware limited liability company
By: INLAND WESTERN RETAIL REAL ESTATE
TRUST, INC., a Maryland corporation,
Its sole member
By: /s/D A Palmer Debra A Palmer
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Its: Asst Secretary
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Dated: January 5, 2004
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EXHIBIT A
INSURANCE CERTIFICATES
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[ACORD(TM) LOGO] CERTIFICATE OF LIABILITY INSURANCE DATE(MM/DD/YYYY)
01/14/04
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PRODUCER 1-630-773-3800 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND
Arthur J. Gallagher & Co, CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE
DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE
Two Pierce Place POLICIES BELOW.
Itasca, IL 60143-3141
Mary Belasich INSURERS AFFORDING COVERAGE NAIC #
INSURED INSURER A: National Surety Corp 21881
Inland Western Retail Real Estate Trust, Inc.
INSURER B: St Paul Fire & Marine Inc Co 24767
2901 Butterfield Road INSURER C:
Oak Brook, IL 60523 INSURER D:
INSURER E:
COVERAGES
THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED.
NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY
BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND
CONDITIONS OF SUCH POLICIES, AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
INSR ADD'L TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE POLICY EXPIRATION
LTR INSRD DATE (MM/DD/YY) DATE (MM/DD/YY) LIMITS
B GENERAL LIABILITY CK01206068 12/08/03 12/08/04 EACH OCCURENCE $ 1,000,000
DAMAGE TO RENTED $ 50,000
/X/ COMMERCIAL GENERAL LIABILITY PREMISES (Ex occurrence)
/ / / /CLAIMS MADE /X/ OCCUR
MED EXP (Any one person)$ 1,000
/ /_____________________________
PERSONAL & ADV INJURY $ 1,000,000
/ /_____________________________
GENERAL AGGREGATE $ 2,000,000
GEN'L AGGREGATE LIMIT APPLIES PER:
PRODUCTS-COMP/OP AGG $ 1,000,000
/X/ POLICY / / PROJECT / / LOC
AUTOMOBILE LIABILITY
/ / ANY AUTO COMBINED SINGLE LIMIT
(Ex accident) $
/ / ALL OWNED AUTOS
BODILY INJURY
/ / SCHEDULED AUTOS (Per person) $
/ / HIRED AUTOS BODILY INJURY
(Per accident) $
/ / NON-OWNED AUTOS
PROPERTY DAMAGE
/ /_____________________________ (Per accident) $
/ /
GARAGE LIABILITY AUTO ONLY - EA ACCIDENT $
/ / ANY AUTO
/ /
OTHER THAN EA ACC $
AUTO ONLY: AGG $
A EXCESS/UMBRELLA LIABILITY XEK85878874 12/08/03 12/08/04 EACH OCCURRENCE $ 25,000,000
/X/ OCCUR / / CLAIMS MADE AGGREGATE $ 25,000,000
$
/ / DEDUCTIBLE $
/ / RETENTION $ $
WORKERS COMPENSATION AND
EMPLOYERS' LIABILITY WC STATUTORY OTHER
LIMITS
ANY PROPRIETOR/PARTNER/ INCL E.L. EACH ACCIDENT $
EXECUTIVE OFFICER/MEMBER EXCL.
EXCLUDED? E.L.DISEASE-EA EMPLOYEE $
If yes, describe under
SPECIAL PROVISIONS below E.L.DISEASE - POLICY
LIMIT $
OTHER
DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/EXCLUSIONS ADDED BY ENDORSEMENT/SPECIAL PROVISIONS
Re: Loan #122-397 Stony Creek Marketplace, 1713C Mercantile Blvd., Nobaleville, IN
Allstate Life Insurance Company, IASOA, c/o Holliday Fenoglio Fowler, LP is shown as an additional insured solely with respect to
General Liability coverage as evidenced herein as required by written contract with respect to location referenced above. Named
Insured includes Inland Southeast Stony Creek, LLC.
CERTIFICATE HOLDER CANCELLATION
Allstate Ins. Co., IASOA c/o Holliday Fenoglio Fowler, LP SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED
Re: Stony Creek Marketplace BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING INSURER
WILL ENDEAVOR TO MAIL 60 DAYS WRITTEN NOTICE TO THE
CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO DO
2000 Post Oak Blvd. Ste. 2000 SO SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND
UPON THE INSURER, ITS AGENTS OR
Houston, TX 77055 REPRESENTATIVES.
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AUTHORIZED REPRESENTATIVE
USA
/s/ W.D. Grant
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ACORD 25(2001/08) lorconn (C) ACORD CORPORATION 1988
1615029
Powered By
CERTIFICATESNOW(TM)
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INLWESRE
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[ACORD(TM) LOGO] EVIDENCE OF PROPERTY INSURANCE DATE(MM/DD/YYYY)
12/04/03
THIS IS EVIDENCE THAT INSURANCE AS IDENTIFIED BELOW HAS BEEN ISSUED, IS IN
FORCE, AND CONVEYS ALL THE RIGHTS AND PRIVILEGES AFFORDED UNDER THE POLICY.
PRODUCER PHONE COMPANY
(A/C. No. Ext):
AJ Gallagher Risk Mgmt Svcs MM St. Paul Fire & Marine
2, Pierce Place 385 Washington Street
Itasca, IL 60143 P.O. Box 64345
Mary Belasich, 630-773-3800 St. Paul, MN 55102
CODE: SUB CODE:
AGENCY
CUSTOMER ID #: 68537
INSURED LOAN NUMBER POLICY NUMBER
Inland Western Retail Real Estate 122-397/CF #62 CK01206068
Trust, Inc.
2901 Butterfield Road EFFECTIVE DATE EXPIRATION DATE CONTINUED UNTIL
Oak Brook, IL 60523 12/05/03 12/05/04 / /TERMINATED IF CHECKED
THIS REPLACES PRIOR EVIDENCE DATED:
PROPERTY INFORMATION
LOCATION/DESCRIPTION
Stony Creek Marketplace
17015-17177 Mercantile Blvd.
Noblesville, IN 46060
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COVERAGE INFORMATION
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COVERAGE/PERILS/FORMS AMOUNT OF INSURANCE DEDUCTIBLE
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Blanket Building Coverage $ 13,600,000 $ 10,000
Special Form, Replacement Cost, Agreed Amount
Blanket Loss of Rents Coverage $ 2,479,169
Flood Coverage (Non-Zone A&B) $ 15,000,000 $ 25,000
Earthquake Coverage (MMI Zones 1-6 only) $ 15,000,000 $ 25,000
Terrorism Coverage is included per St. Paul Form
REMARKS (INCLUDING SPECIAL CONDITIONS)
Re: Named Insured, Inland Southeast Stony Creek, LLC
Allstate Insurance Company, IASOA, c/o Holliday Fenoglio Fowler, LP is shown as mortgagee and loss payee soley
with respect to property coverage as evidenced herein as required by written contract with respects to the
building at location referenced above.
CANCELLATION
THE POLICY IS SUBJECT TO THE PREMIUMS, FORMS, AND RULES IN EFFECT FOR EACH POLICY PERIOD, SHOULD THE POLICY
BE TERMINATED, THE COMPANY WILL GIVE THE ADDITIONAL INTEREST IDENTIFIED BELOW 60 DAYS WRITTEN NOTICE, AND
WILL SEND NOTIFICATION OF ANY CHANGES TO THE POLICY THAT WOULD AFFECT THAT INTEREST, IN ACCORDANCE WITH THE
POLICY PROVISIONS OR AS REQUIRED BY LAW.
ADDITIONAL INTEREST
NAME AND ADDRESS /X/ MORTGAGEE / / ADDITIONAL INSURED
Allstate Insurance Company, IASOA /X/ LOSS PAYEE / /
c/o Holliday Fenoglio Fowler, LP
2000 Post Oak Blvd. LOAN # 122-397/CF #62
Suite #2000
Houston, TX 77056 AUTHORIZED REPRESENTATIVE
/s/ W.D. Grant
ACORD 27 (3/83) 1 of 1 2820 MZB (C) ACORD CORPORATION 1983
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IMPORTANT
If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be
endorsed. A statement on this certificate does not confer rights to the
certificate holder in lieu of such endorsement(s).
If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy,
certain policies may require an endorsement. A statement on this certificate
does not confer rights to the certificate holder in lieu of such
endorsement(s).
DISCLAIMER
The Certificate of Insurance on the reverse side of this form does not
constitute a contract between the issuing insurer(s), authorized
representative or producer, and the certificate holder, nor does it
affirmatively or negatively amend, extend or alter the coverage afforded by
the policies listed thereon.
ACORD 25(2001/08)
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EXHIBIT B
PROPERTY MANAGER LETTER
INLAND NORTHWEST MANAGEMENT CORP.
January 5, 2004
Allstate Insurance Company
c/o Allstate Investments, LLC
Allstate Plaza South, Suite G5C
3075 West Sanders Road
Northbrook, Illinois 60062
Attention: Commercial Mortgage Division
Re: Allstate Insurance Company
Loan No. 122397
Stoney Creek Marketplace
17130 Mercantile Boulevard, Noblesville, Indiana (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 December
___, 2003, by and between INLAND SOUTHEAST STONY CREEK, 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.
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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 judgement, 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 Mortgage.
INLAND NORTHWEST MANAGEMENT CORP.
By:
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Its
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