**Exhibit 10.433**

 

ALLSTATE LIFE INSURANCECOMPANY

ALLSTATE PLAZA SOUTH,SUITE G5C

NORTHBROOK, ILLINOIS60062

 

December 23, 2004

 

InlandWestern Longmont Fox Creek, L.L.C.

2901Butterfield Road

Oakbrook,Illinois 60523

 

Re:     Allstate Life Insurance Company

            LoanNo. 122561

            FoxCreek Village, 1601-1645 Pace Street

            Longmont,Colorado(the “Property”)

 

Ladiesand Gentlemen:

 

Referenceis made to our Commitment Letter dated December 17, 2004, as amended (the “Commitment”)with respect to a**$11,485,000 loan (the “Loan”) tobe evidenced by a Mortgage Note of even date herewith payable to Allstate LifeInsurance Company in the principal amount the Loan (the “Note”), and to besecured by a Deed of Trust, Assignment of Leases, Rents and Contracts, SecurityAgreement and Fixture Filing of even date herewith (the “Deed of Trust”)encumbering the Property. Initially capitalized terms used but not otherwisedefined in this letter agreement (the “Letter Agreement”) have the samemeanings given them in the Deed of Trust.

 

Inconsideration of your execution and delivery of the documents evidencing,securing or otherwise pertaining to the Loan (the “Loan Documents”), you (the “Borrower”)and we (“Lender”) hereby agree as follows:

 

1.             Related Agreement. ThisLetter Agreement shall constitute a Related Agreement

 

2.             Impounds.With regard to the provisions contained in Section 1.06 of the Deed of Trustrequiring Borrower to deposit 1/12 of the annual amounts of real estate taxes,regular and special assessments and insurance premiums, Lender hereby agrees todefer collection of such monthly deposits for so long as (a) Borrower is thesole fee simple owner of the Property; and (b) no Event of Default exists underthe Loan Documents and no condition or event exists which with notice, thepassage of time, or both, would constitute an Event of Default; and (c) at Lender’selection, Borrower either pays for a tax reporting service or Borrower promptlyand consistently furnishes evidence that taxes and insurance are beingcurrently paid.

 

3.             Earthquake Insurance. Withregard to the provisions contained in Section 1.02 of the Deed of Trustrequiring Borrower obtain earthquake insurance coverage on the Property, Lenderhereby agrees to waive such requirement until such time as such coverage isavailable at commercially reasonable rates and in Lender’s reasonable opinionsuch coverage is generally required by other institutional lenders.

 

4.             Borrower’s Right to Transfer theProperty.    Notwithstanding the provisionscontained in Section 1.08 and other applicable provisions of the Deed of Trust,Borrower shall have a one time right, provided there is no Event of Default ordefault or event which, with notice or the passage of time, or both, couldresult in an Event of Default by Borrower under the Loan Documents, to assign,sell or transfer all of the Property (the “Permitted Transfer”) to a

 

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party with experience,reasonably satisfactory to Lender, in managing property similar to the Propertyand whose financial condition is reasonably satisfactory to Lender (“PermittedTransferee”). The Permitted Transfer shall be further conditioned upon:

 

(a)           the payment by Borrower to Lender ofa transfer fee equal to one percent of the outstanding principal balance of theNote (a nonrefundable $5,000 deposit toward such transfer fee shall be due atthe time Borrower initially requests a Permitted Transfer, the balance of the transferfee shall be due on the closing of the transaction);

 

(b)           the reimbursement of all of Lender’sexpenses, including legal fees, incurred in connection with the PermittedTransfer;

 

(c)           the Permitted Transferee and suchgeneral 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 any nonrecourse exceptionindemnity agreement, with the same degree of recourse liability as Borrower andsubject to the same exculpatory provisions;

 

(d)           Lender’s receipt of a title policycomplying with the requirements of the Commitment, updated to the date of thePermitted Transfer, evidencing that such Permitted Transfer will not adverselyaffect Lender’s first and prior lien on the Property or any other rights orinterests granted to Lender under the Loan Documents;

 

(e)           Lender’s receipt of opinions ofcounsel acceptable to Lender that all previous opinions, pertaining to Borrowerare true with respect to the Permitted Transferee and the Permitted Transfereehas duly assumed the Loan Documents, and same are valid and enforceable againstPermitted Transferee and the Property; and that Borrower has the requisitepower and authority to properly transfer the Property;

 

(f)            the Property having maintained aDebt Coverage Ratio of not less than 180 percent for the 12 month period ending30 days before the date of the Permitted Transfer and the Property having aprojected Debt Coverage Ratio for the next 12 months based on the most recentlyapproved and certified financial statements and annual rent roll of not lessthan 180 percent;

 

(g)           the Permitted Transferee paying toBorrower at least 40 percent cash down payment on the date of the PermittedTransfer;

 

(h)           Lender’s receipt and approval of thepurchase and sale contract and copies of the proposed transfer documentation;

 

(i)            Lender’s receipt and approval of thePermitted Transferee’s resume and financial statements; and

 

(j)            Lender’s receipt and approval of anupdated MAI appraisal by an appraiser satisfactory to Lender (prepared atBorrower’s expense) specifically confirming a loan to value ratio of no morethan 60 percent.

 

Inaddition, Borrower shall have the right, provided there is no Event of Defaultor default or event which, with notice or the passage of time, or both, couldresult in an Event of Default by Borrower under the Loan Documents, to make aPermitted Transfer to INLAND

 

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WESTERNRETAIL REAL ESTATE TRUST, INC., a Maryland corporation (“Member”), the solemember of Borrower, so long as (x) Borrower pays to Lender a transfer fee equalto $5,000, (y) the Member assumes, in form and substance satisfactory toLender, all obligations of Borrower under the Loan Documents, including,without limitation, the Environmental Indemnity Agreement, with the same degreeof recourse liability as Borrower and subject to the same exculpatoryprovisions, and (z) the conditions and requirements set forth in subparagraphs4(b), (d) and (e) above are satisfied.

 

NetOperating Income shall be certified to be true and correct by the managinggeneral partner, manager or chief financial officer of Borrower.

 

5.               Right to Change OwnershipInterests in Borrower. Notwithstanding the provisions contained in Section1.08 and other applicable provisions of the Deed of Trust, so long as Membermaintains its status as a Real Estate Investment Trust (a “REIT”), anyencumbrance, security interest or assignment or transfer of ownership of alltypes and classes of the shares of Member shall not constitute an improperencumbrance or transfer.

 

6             Damage to Property.With regard to the provisions contained in Section 1.04(A) of the Deed of Trustrequiring Borrower to notify Lender of damage to the Property, the costthreshold for notification shall be increased to One Hundred Thousand Dollars($100,000). With regard to the provisions contained in Section 1.04(B) and1.04(C) of the Deed of Trust regarding the estimated cost of restoration, thethreshold amounts shall be increased to Two Hundred Fifty Thousand Dollars($250,000).

 

7.             Insurance.   Lender hereby approves the insuranceevidenced by the certificates attached as Exhibit A hereto.

 

8.             Property Manager. Lenderhereby approves Inland Southwest Management LLC, as manager of the Property,subject to its execution of the letter attached as Exhibit B hereto.

 

9.             Red Bug Loan.   In connection with the Loan, INLAND WESTERNWINTER SPRINGS RED BUG, L.L.C., a Delaware limited liability company (“AffiliatedBorrower”), an affiliate of Borrower has applied to Allstate for a loan to beevidenced and secured by (a) a Mortgage Note from Affiliated Borrower to Lender(the “Other Note”), (b) a Mortgage, Assignment of Leases, Rents and Contracts,Security Agreement and Fixture Filing of even date herewith (the “OtherMortgage”) encumbering certain real property owned by Affiliated Borrower andthe respective improvements thereon and personal property associated therewith locatedin Winter Springs, Seminole County, Florida, as described in the Other Mortgage(the “Other Property”), and (c) the Related Agreements defined in the OtherMortgage (collectively and as the same may be amended, modified or supplementedfrom time to time, the “Other Loan Documents”).   Borrower acknowledges and agrees that Lenderis making the Loan with the understanding that the Loan will also be secured bythe Other Mortgage and that an Event of Default under either the Loan Documentsor the Other Loan Documents shall constitute an Event of Default under both theLoan and the Other Loan.   In connectionwith the Other Loan, Borrower shall execute an Amendment to Loan Documents tobe recorded in Boulder County, Colorado, and any other documentation necessary to ensure that the loans arc “cross-collateralized” and “cross-defaulted”.

 

10.           Rights Personal to Borrower.    This Letter Agreement shall be binding uponBorrower and its successors and assigns, except that the rights granted toBorrower in this Letter Agreement shall be personal to Borrower and shall notinure to the benefit of any subsequent

 

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ownerof the Property. In the event Lender transfers all or any part of the Loan orany interest in the Loan Documents to any other person or entity, Lender agreesto notify such transferee(s) of the existence of this Letter Agreement and thefact that it is binding upon Lender’s successors and assigns by delivering suchtransferee(s) a true, correct and complete copy of this Letter Agreement concurrentlywith such transfer accompanied by a letter of transmittal from Lender advisingsuch transferee(s) of the binding nature of the provisions of this LetterAgreement. Lender will send a copy of its letter of transmittal and theenclosure to Borrower, and Borrower’s name will be shown on the face of theoriginal letter of transmittal as an addressee thereof.

 

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[Signature Page Follows]

 

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|                     | Very truly yours,                                                                 |
|--------------------------|-----------------------------------------------------------------------------------|
|                     |                                                                              |
|                     | ALLSTATE LIFE INSURANCE  COMPANY,

an Illinois insurance  corporation             |
|                     |                                                                              |
|                     |                                                                              |
|                     | By:                                                                               |   |   |
|                     |                                                                              |   |   |
|                     |                                                                              |   |   |
|                     | By:                                                                               |   |   |
|                     |           Its Authorized Signatories |
|                     |                                                                              |
|                     | Accepted and agreed:                                                              |
|                     |                                                                              |
|                     | INLAND WESTERN LONGMONT  FOX 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/ [ILLEGIBLE] |   |
|                     |                                                                              | Its: | Asst. Secretary |   |
| Dated: December 23, 2004 |                                                                              |   |
|                          |                                                                                   |  |  |  |  |

 

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EXHIBIT A

 

INSURANCE CERTIFICATES

 

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EXHIBIT B

 

PROPERTY MANAGER LETTER

 

INLAND SOUTHWESTMANAGEMENT LLC

 

December 23, 2004

 

Inland Western Longmont FoxCreek, L.L.C.

290l Butterfield Road

Oakbrook,Illinois 60523

 

Re:     Allstate Life Insurance Company

            LoanNo. 122561

            FoxCreek Village, 1601-1645 Pace Street

            Longmont,Colorado (the “Property”)

 

Ladiesand Gentlemen:

 

Theundersigned (“Manager”) is the current property manager of the Propertypursuant to that certain Management Agreement (the “Agreement”) dated as ofNovember 22, 2004, by and between INLAND WESTERN LONGMONT FOX CREEK, L.L.C., aDelaware limited liability company (“Owner”) and Manager. In consideration ofyour making the Loan to Owner (Manager being an affiliate of Owner), Manageracknowledges and agrees to the following:

 

1.                                       Allstate, in its sole discretion, mayterminate the Agreement by notice to Manager upon acquisition by Allstate oftitle to the Property by foreclosure, deed in lieu of foreclosure, or othertransfer of the Property or upon Allstate otherwise obtaining possession of theProperty by any lawful means. Upon the appointment of a receiver or courtappointed officer, either Allstate or such receiver or officer may terminatethe Agreement in its sole discretion by notice to Manager.

 

2                                          Manager waives any right to create a lienagainst the Property to secure payment of unpaid management fees.

 

3.                                       Upon the occurrence of, and during thecontinuation of, a default under any of the documents evidencing the Loan whichhas not been cured in Allstate’s sole judgment, all management fees paid orpayable to Manager thereafter shall be subordinate to amounts owed to Allstateunder such Loan documents.

 

 

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4.                                       Upon the occurrence of, and during thecontinuation of, a default under any of the documents evidencing the Loan whichhas not been cured in Allstate’s sole judgment, all management fees and othersums received by Manager thereafter in connection with management of theProperty shall be held in trust for the benefit of Allstate.

 

5.                                       Until Allstate elects to terminate theAgreement as provided herein, Manager will perform all of its obligations,covenants, conditions and agreements under the Agreement for the benefit ofAllstate and its successors and assigns, so long as Allstate performs theduties and obligations of Owner under the Agreement accruing after the dateAllstate exercises its rights under the Deed of Trust.

 
|   | INLAND SOUTHWEST  MANAGEMENT LLC |
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|   | By:                              |   |   |
|   |                             | Its |   |   |
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