Exhibit 10.146
POST-CLOSING ESCROW AND MASTER LEASE AGREEMENT
This POST-CLOSING ESCROW AND MASTER LEASE AGREEMENT (the "AGREEMENT") is
made and entered into as of May 21, 2004 (the "EFFECTIVE DATE"), by and among
ASG WATAUGA PAVILION, LTD., a Texas limited partnership (hereinafter referred to
as "SELLER", INLAND WESTERN WATAUGA LIMITED PARTNERSHIP, an Illinois limited
partnership (hereinafter referred to as "BUYER"), and CHICAGO TITLE INSURANCE
COMPANY (hereinafter referred to as "ESCROW AGENT") having as its address 000
Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx Xxxxxx.
WITNESSETH:
WHEREAS, pursuant to that certain Purchase and Sale Agreement dated as of
April 20, 2004 (as may be amended, the "CONTRACT"), by and between Seller and
Inland Real Estate Acquisitions, Inc. (Buyer's predecessor in interest), Buyer
acquired from Seller certain real property known as the Watauga Pavilion
Shopping Center located in Watauga, Tarrant County, Texas (the "PROPERTY"), such
acquisition having been closed and consummated as of the Effective Date;
WHEREAS, pursuant to the terms of the Contract, Seller and Buyer have
agreed to enter into this Agreement to govern, among other things, the
establishment of certain escrow accounts and the post-closing rights and
obligations of Seller with respect to the Post-Closing Construction and the
Master Lese Premises (as such terms are used in the Contract);
NOW, THEREFORE, for and in consideration of the premises hereto, the
covenants and agreements hereinafter made, and for Ten and No/100 Dollars
($10.00) in hand paid to Escrow Agent, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
AGREEMENT:
1. DEFINITIONS. Capitalized terms which are used but not defined in this
Agreement shall have the meanings ascribed thereto in the Contract.
2. MASTER LEASE.
(a) From and after the Effective Date hereof until the Termination Date
(as defined in SECTION 6 hereof), Purchaser hereby grants and conveys to
Seller, and Seller hereby accepts from Purchaser, the Post-Closing Leasing
Rights covering the Master Lease Premises.
(b) Except as may be otherwise expressly set forth herein, the rights
and obligations of Seller and Purchaser with respect to the Post-Closing
Leasing Rights and the Master Lease Premises shall be governed by the
terms and provisions of the Contract, including, without limitation,
SECTIONS 15.2, 15.3 and 15.4 of the Contract.
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3. POST-CLOSING CONSTRUCTION ESCROW.
(a) Contemporaneously with the execution hereof, Seller has delivered to
Escrow Agent, and Escrow Agent hereby acknowledges receipt of, the sum of
Four Hundred Seventy Three Thousand and No/100 Dollars ($473,000.00) (the
"POST-CLOSING CONSTRUCTION ESCROW") to secure the performance and
completion by Seller of the Post-Closing Construction, as more
particularly set forth in SECTION 15.4 of the Contract. The Post-Closing
Construction Escrow constitutes Seller's total monetary obligations with
respect to the Post-Closing Construction.
(b) Escrow Agent agrees to immediately deposit the Post-Closing
Construction Escrow in a money market account in a financial institution
approved by Seller and Buyer, in their respective reasonably discretion,
from which immediate withdrawal is available without penalty, and to hold
and disburse the same, together with any interest earned thereon, in
accordance with this Agreement. Interest earned on the Post-Closing
Construction Escrow shall belong to Seller, and shall be disbursed to
Seller upon the termination of this Agreement.
(c) Upon the Substantial Completion of the Post-Closing Improvements,
Seller shall provide Escrow Agent (with a contemporaneous copy to Buyer)
with (i) a written certification that Substantial Completion has occurred
and (ii) Seller's written direction to Escrow Agent to release the
Post-Closing Construction Escrow to Seller (collectively, the "COMPLETION
NOTICE"). Within one (1) business day of Escrow Agent's receipt of the
Completion Notice, Escrow Agent shall disburse the Post Closing
Construction Escrow to Seller. For purposes of this SECTION 3,
"Substantially Complete" or "Substantial Completion" shall mean (a) a
certificate of substantial completion (subject only to an attached punch
list) as to the Post-Closing Improvements and all Post-Closing
Construction shall have been issued and signed by Seller's project
architect stating that Seller's work has been substantially completed
(subject only to an attached punch list) in substantial compliance with
the Plans and Specifications and all applicable governmental rules,
regulations and requirements, (ii) Seller shall have delivered to Buyer
and Escrow Agent lien waivers from Seller's general contractor for the
ninety (90) day period prior to the date of Substantial Completion, and
(iii) Seller shall have delivered to Buyer and Escrow Agent an updated
survey showing the final as-built condition of the Post-Closing
Improvements (at Seller's sole cost and expense).
(d) In accordance with the terms and provisions of SECTION 15.3(b) of
the Contract, in the event that any portion of the Post-Closing
Improvements is not Substantially Complete by the expiration of the
Post-Closing Leasing Period, Buyer, as Buyer's sole remedy, shall be
entitled to complete such construction in accordance with the applicable
terms hereof and of the Contract, and upon completion of such construction
and delivery to Escrow Agent of invoices documenting the reasonable
out-of-pocket expenses incurred by Buyer in connection with such
construction (accompanied by evidence that such invoices have been paid in
full), Escrow Agent shall remit to Buyer the entire amount of such
invoices within two (2) business days of Escrow Agent's receipt thereof
by wire transfer or a check payable as directed by Buyer. Each invoice
submitted to Escrow Agent will be sent simultaneously to Seller, Seller
shall have the right, during such two (2) business day period, to deliver
in writing any bona fide objection regarding the
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content thereof to Escrow Agent (with a simultaneous copy to Buyer) if
Seller reasonably and in good faith determines that the amounts reflected
in the invoices are not accurate. If Escrow Agent does not timely receive
any such written objection from Seller, then Escrow Agent shall disburse
the appropriate amount out of the Post-Closing Construction Escrow. Any
remaining portion of the Post-Closing Construction Escrow following such
disbursement to Buyer shall be immediately disbursed to Seller.
Notwithstanding anything contained herein or in the Contract to the
contrary, if applicable, the terms and provisions of this SECTION 3(d)
shall survive the expiration of the Post-Closing Leasing Period and/or the
Termination Date for a period of twelve (12) months. In the event that any
funds remain in the Post-Closing Construction Escrow at the end of such
12-month period, all such remaining funds shall be immediately disbursed
to Seller.
(e) Except as otherwise expressly set forth herein, the rights and
obligations of Seller and Buyer with respect to the Post-Closing
Construction Escrow shall be governed by the terms and provisions of
SECTION 15.4 of the Contract.
4. MASTER LEASE RENT ESCROW.
(a) Contemporaneously with the execution hereof, Seller has delivered to
Escrow Agent, and Escrow Agent hereby acknowledges receipt of, the sum of
Seven Hundred Fifteen Thousand Nine Hundred Sixty and No/100 Dollars
($715,960.00) (the " MASTER LEASE RENT ESCROW". The Master Lease Rent
Escrow constitutes the Seller's total rental obligations, triple-net
obligations and other monetary obligations with respect to the Master
Lease Premises.
(b) Escrow Agent agrees to immediately deposit the Master Lease Rent
Escrow in a money market account in a financial institution approved by
Seller and Buyer, in their respective reasonably discretion, from which
immediate withdrawal is available without penalty, and to hold and
disburse the same, together with any interest earned thereon, in
accordance with this Agreement. Interest earned on the Master Lease Rent
Escrow shall belong to Seller, and shall be disbursed to Seller upon the
termination of this Agreement.
(c) Escrow Agent is hereby authorized to pay to Buyer in accordance with
the terms hereof, without further direction from Seller, monthly payments,
in advance, for rent and reimbursable expenses, from the Master Lease Rent
Escrow, in the sum of 1/24th of the Master Lease Rent Escrow (each, a
"MASTER LEASE RENT PAYMENT"). The Master Lease Rent Payment shall be made
by Escrow Agent to Buyer until the earlier of: (i) the date which is
twenty-four (24) months after the date hereof, or (ii) the date on which
the Master Lease Premises has been eliminated pursuant to one or more
Master Lease Reductions. Immediately upon written notification by Seller
to Escrow Agent (with a contemporaneous copy to Buyer) of a Master Lease
Reduction (the "REDUCTION NOTICE") Escrow Agent shall reduce the Master
Lease Rent Escrow by the gross amount of all of the base rent, additional
rent, triple-net payments and tenant reimbursables payable and/or
scheduled for payment under the applicable Tenant Lease during the
remaining portion of the term of this Agreement (as set forth in the
Reduction Notice), and shall immediately disburse to Seller from the
Master Lease Rent Escrow an amount equal to the amount of such reduction,
After such reduction, the Escrow Agent shall recalculate the scheduled
Master Lease Rent Payment to be the sum of the amount remaining in the
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Master Lease Rent Escrow divided by the number of months then remaining in
the term of this Agreement.
(d) If the Post-Closing Leasing Period expires prior to the date that is
24 months after the date hereof, then the funds held under the Master
Lease Rent Escrow shall be disbursed as follows:
(i) First, to Buyer in the amount of any accrued but unpaid
rentals owing from Seller to Buyer under the Master Lease Rent
Escrow (less the amount of payments owed from Buyer to Seller, if
any, thereunder); and
(ii) Second, any remaining portion thereof to Seller in accordance
herewith.
(e) If not disbursed as of the expiration of the full 24 month period,
all of the funds remaining in the Master Lease Rent Escrow shall be
immediately disbursed to Seller.
(f) Except as otherwise expressly set forth herein, the rights and
obligations of Seller and Buyer with respect to the Master Lease Rent
Escrow shall be governed by the terms and provisions of SECTION 15.3 of
the Contract.
5. TILC ESCROW.
(a) Contemporaneously with the execution hereof, Seller has delivered to
Escrow Agent, and Escrow Agent hereby acknowledges receipt of, the
following amounts:
(i) One Hundred Ninety Four Thousand Five Hundred Thirty Five and
No/100 Dollars ($194,535.00) (the "LEASING DEPOSIT") for the payment
of certain tenant improvement expenses incurred by Seller in
connection with Seller's exercise of the Post-Closing Leasing
Rights, and
(ii) Thirty Eight Thousand Nine Hundred Seven and No/100 Dollars
($38,907.00) (the "COMMISSION DEPOSIT") for the payment of certain
leasing commissions incurred by Seller in connection with Seller's
exercise of the Post-Closing Leasing Rights.
The Leasing Deposit and the Commission Deposit are hereinafter
collectively referred to as the "TILC ESCROW." The TILC Escrow constitutes
Seller's total monetary obligations with respect to the tenant improvement
expenses and the leasing commissions incurred in connection with Seller's
exercise of the Post-Closing Leasing Rights.
(b) Escrow Agent agrees to immediately deposit the TILC Escrow in a
money market account in a financial institution approved by Seller and
Buyer, in their respective reasonably discretion, from which immediate
withdrawal is available without penalty, and to hold and disburse the
same, together with any interest earned thereon, in accordance with this
Agreement. Interest earned on the TILC Escrow shall belong to Seller, and
shall be disbursed to Seller upon the termination of this Agreement.
(c) Upon the delivery of a portion of the Master Lease Premises to a new
tenant (the "NEW LEASE PREMISES") pursuant to the terms of such new
tenant's lease, Seller shall
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deliver to Escrow Agent written notice thereof (the "NEW LEASE NOTICE"),
with a contemporaneous copy to Buyer, which New Lease Notice shall set
forth the date of delivery and the rentable square footage of such portion
of the Master Lease Premises. Upon receipt of the New Lease Notice, Escrow
Agent shall remit to Seller, by wire transfer or a check payable as
directed by Seller, an amount equal to:
(i) $15.00 per rentable square foot of the New Lease Premises for
tenant improvements, to be disbursed from the Leasing Deposit
portion of the TILC Escrow; and
(ii) $3.00 per rentable square foot of the New Lease Premises for
leasing commissions, to be disbursed from the Commission Deposit
portion of the TILC Escrow.
(d) Escrow Agent will advance the TILC Escrow to Seller in accordance
with SECTION 5(c) above until the earlier to occur of (i) the date upon
which there are no further funds remaining in the TILC Escrow, or (ii) the
date upon which the entirety of the Master Lease Premises has been leased
and delivered to one or more new tenant. In the event of the lease and
delivery of the entirety of the Master Lease Premises as provided in the
preceding sentence, Seller shall provide Escrow Agent with written
direction to release any remaining portion of the TILC Escrow to Seller
and Escrow Agent shall disburse same to Seller within one (1) business day
of receipt of such notice.
(e) If any portion of the Master Lease Premises fails to be Occupied as
of the expiration of the Post-Closing Leasing Period (collectively, the
"FINAL VACANT SPACE"), any amounts remaining in the TILC Escrow shall be
disbursed by Escrow Agent as follows:
(i) First, to Buyer, an amount equal to the sum of (A) $15.00 per
rentable square foot of the Final Vacant Space for tenant
improvements, to be disbursed from the Leasing Deposit portion of
the TILC Escrow, and (B) $3.00 per rentable square foot of the Final
Vacant Space for leasing commissions, to be disbursed from the
Commission Deposit portion of the TILC Escrow; and
(ii) Second, to Seller, any remaining portion of the TILC Escrow.
(f) Except as otherwise expressly set forth herein, the rights and
obligations of Seller and Buyer with respect to the TILC Escrow shall be
governed by the terms and provisions of SECTION 15.3 of the Contract.
6. TERMINATION. This Agreement shall terminate and be null and void upon the
earlier to occur of the following events (the "TERMINATION DATE"):
(a) upon the mutual written agreement of Seller, Buyer and Escrow Agent;
(b) upon the Occupancy of the entirety of the Master Lease Premises by
one or more tenants pursuant to new Tenant Leases between such tenants and
Buyer; or
(c) the date that is twenty-four (24) months from the Effective Date
hereof.
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Upon the termination of this Agreement, Seller and Buyer shall execute a
termination of the Memorandum of Agreement (as defined in SECTION 11(f) hereof),
and shall cause such termination to be promptly recorded in Real Property
Records of Tarrant County, Texas.
7. ESCROW AGENT LIABILITY. The following provisions shall control with
respect to the rights, duties, liabilities, privileges and immunities of Escrow
Agent:
(a) Escrow Agent is not a party to and is not bound by, or charged with
notice of, any agreement out of which this escrow may arise, except for
the provisions of this Agreement.
(b) Escrow Agent acts hereunder as a depository and disbursing Escrow
Agent only and is not responsible or liable in any manner whatsoever for
the sufficiency, correctness, genuineness or validity of the instruments
or funds which are the subject of this Agreement.
(c) In the event Escrow Agent becomes involved in litigation in
connection with this Agreement not arising as a result of any negligence
or willful misconduct on the part of Escrow Agent, the non-prevailing
party, jointly and severally, agree to indemnify and save Escrow Agent
harmless from all loss, cost, damages, expenses and attorneys' fees
suffered or incurred by Escrow Agent as a result thereof.
(d) Escrow Agent shall be protected in acting upon any written notice,
request, waiver, consent, certificate, receipt, authorization, power of
attorney or other paper or document which Escrow Agent, in good faith,
believes to be genuine and what it purports to be.
(e) Escrow Agent shall act hereunder in accordance with ordinary
business practices and shall not be liable for anything which it may do or
refrain from doing in connection herewith, except its own negligence or
willful misconduct.
(f) In the event of any good faith disagreement between Seller and Buyer
(collectively, the "PARTIES"), or between them or any of them and any
other person, resulting in adverse claims or demands being made in
connection with this Agreement or in the event that Escrow Agent, in good
faith, is in doubt as to what action it should take hereunder, Escrow
Agent may, at its option, by written notice to the Parties, refuse to
comply with any claims or demands on it or refuse to take any other action
hereunder so long as such disagreement continues or such doubt exists; and
in any such event, Escrow Agent shall not be or become liable in any way
or to any person for its failure or refusal to act, and Escrow Agent shall
be entitled to continue so to refrain from acting until (i) the rights of
all parties shall have been fully and finally adjudicated by a court of
competent jurisdiction, or (ii) all differences shall have been adjusted
and all doubt resolved by agreement among all of the interested persons,
and Escrow Agent shall have been notified thereof, in writing, signed by
all such persons. The rights of Escrow Agent under this paragraph are
cumulative of all other rights which it may have, by law or otherwise.
(g) Reasonable compensation for the escrow services herein required of
Escrow Agent, if any, shall be paid equally by Seller and Buyer.
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8. SPRINT TI ALLOWANCE ESCROW.
(a) Contemporaneously with the execution hereof, Seller has delivered to
Escrow Agent, and Escrow Agent hereby acknowledges receipt of the sum of
Fifty Four Thousand Seven Hundred Sixty and No/100 Dollars ($54,760.00)
(the "SPRINT TI ALLOWANCE ESCROW"). Seller and Buyer acknowledge and agree
that a certain tenant improvement allowance is conditionally payable to
that certain tenant at the Property known as "Sprint" ("SPRINT") under
Sprint's Tenant Lease (as such Tenant Lease exists as of the Effective
Date, the "SPRINT LEASE"). Sprint has not, as of the Effective Date,
provided to Seller certain of the documentation and other deliveries
required under the Sprint Lease as a condition to the payment of such
tenant improvement allowance. The payment of the tenant improvement
allowance under the Sprint Lease (as such obligation exists as of the
Effective Date) is subject to the satisfaction by Sprint of the applicable
payment conditions under the Sprint Lease (as such conditions exist as of
the Effective Date).
(b) Escrow Agent agrees to immediately deposit the Sprint TI Allowance
Escrow in a money market account in a financial institution approved by
Seller and Buyer, in their respective reasonably discretion, from which
immediate withdrawal is available without penalty, and to hold and
disburse the same, together with any interest earned thereon, in
accordance with this Agreement. Interest earned on the Sprint TI Allowance
Escrow shall belong to Seller, and shall be disbursed to Seller upon the
termination of this Agreement. The Sprint TI Allowance Escrow constitutes
Seller's total monetary obligations with respect to the payment of the
tenant improvement allowance under the Sprint Lease.
(c) Promptly after the satisfaction by Sprint of the conditions to
payment of such tenant improvement allowance as stated in the Sprint
Lease, Seller shall provide Escrow Agent (with a contemporaneous copy to
Buyer) with Seller's written direction to Escrow Agent to release the
Sprint TI Allowance Escrow to Sprint (including payment directions for
Sprint) as payment of the tenant improvement allowance owed by Seller to
Sprint (the "SPRINT TI NOTICE"). Within one (1) business day of Escrow
Agent's receipt of the Sprint TI Notice, Escrow Agent shall disburse the
Sprint TI Allowance Escrow to Sprint in accordance with the Sprint TI
Notice.
(d) In the event either (i) the obligation under the Sprint Lease to pay
such tenant improvement allowance expires, lapses or terminates for any
reason during the Post-Closing Leasing Period prior to the satisfaction of
the applicable payment conditions, or (ii) the applicable payment
conditions are not satisfied during the Post-Closing Leasing Period, the
Sprint TI Allowance Escrow shall be immediately disbursed to Seller upon
written notice to Escrow Agent (with a contemporaneous copy to Buyer).
Notwithstanding any release to Seller of the Sprint TI Allowance Escrow
under ITEM (ii) above, Seller shall remain liable to Sprint for the
payment of the tenant improvement allowance under the Sprint Lease (as
such obligation exists as of the Effective Date), subject to the
satisfaction by Sprint of the applicable payment conditions under the
Sprint Lease (as such conditions exist as of the Effective Date).
9. ADDITIONAL LEASING COMMISSIONS ESCROWS.
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(a) Contemporaneously with the execution hereof, Seller has delivered to
Escrow Agent, and Escrow Agent hereby acknowledges receipt of, the
following amounts:
(i) Thirty Three Thousand Six Hundred and No/100 Dollars
($33,600.00) (the "HALF PRICE BOOKS LC ESCROW") for the payment of
the unpaid portion of that certain leasing commission that is
conditionally payable in connection with the Tenant Lease (as such
Tenant Lease exists as of the Effective Date, the "HALF PRICE BOOKS
LEASE") for the tenant at the Property known as "Half Price Books"
("HALF PRICE BOOKS"), and
(ii) Forty Two Thousand and No/100 Dollars ($42,000.00) (the "PARTY
CITY LC ESCROW") for the payment of the unpaid portion of that
certain leasing commission that is conditionally payable in
connection with the Tenant Lease (as such Tenant Lease exists as of
the Effective Date, the "PARTY CITY LEASE") for the tenant at the
Property known as "Party City" ("PARTY CITY").
The Half Price Books LC Escrow and the Party City LC Escrow are
hereinafter collectively referred to as the "OUTSTANDING LC ESCROW." The
payment of the unpaid portion of those certain leasing commissions that
are conditionally payable in connection with the Party City Lease and the
Half Price Books Lease (as such obligation exists as of the Effective
Date) is subject to the satisfaction of the applicable payment conditions
under the applicable Tenant Leases (as such conditions exist as of the
Effective Date).
(b) Escrow Agent agrees to immediately deposit the Outstanding LC Escrow
in a money market account in a financial institution approved by Seller
and Buyer, in their respective reasonably discretion, from which immediate
withdrawal is available without penalty, and to hold and disburse the
same, together with any interest earned thereon, in accordance with this
Agreement. Interest earned on the Outstanding LC Escrow shall belong to
Seller, and shall be disbursed to Seller upon the termination of this
Agreement. The Outstanding LC Escrow constitutes Seller's total monetary
obligations with respect to the payment of the unpaid portion of those
certain leasing commissions that are conditionally payable in connection
with the Party City Lease and the Half Price Books Lease.
(c) Promptly after the satisfaction by the applicable party of the
conditions to payment of the unpaid portion of such leasing commissions as
stated in the Party City Lease or the Half Price Books Lease (as
applicable), Seller shall provide Escrow Agent (with a contemporaneous
copy to Buyer) with Seller's written direction to Escrow Agent to release
the Party City LC Escrow or the Half Price Books LC Escrow (as the case
may be) to the applicable party (including payment directions for such
party) as payment of the unpaid portion of such leasing commissions owed
by Seller (an "LC NOTICE"). Within one (1) business day of Escrow Agent's
receipt of an LC Notice, Escrow Agent shall disburse the Party City LC
Escrow or the Half Price Books LC Escrow (as the case may be) to the
applicable party in accordance with the LC Notice.
(d) In the event either (i) the obligation under the Party City Lease or
the Half Price Books Lease (as applicable) to pay such leasing commissions
expires, lapses or terminates for any reason during the Post-Closing
Leasing Period prior to the satisfaction
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of the applicable payment conditions, or (ii) the applicable payment
conditions are not satisfied during the Post-Closing Leasing Period, the
applicable portion of the Outstanding LC Escrow (being either the Party
City LC Escrow or the Half Price Books LC Escrow) shall be immediately
disbursed to Seller upon written notice to Escrow Agent (with a
contemporaneous copy to Buyer), Notwithstanding any release to Seller of
any portion of the Outstanding LC Escrow under ITEM (ii) above, Seller
shall remain liable for the payment of the unpaid portion of those certain
leasing commissions that are conditionally payable in connection with the
Party City Lease and the Half Price Books Lease (as such obligations exist
as of the Effective Date), subject to the satisfaction of the applicable
payment conditions under the Party City Lease or the Half Price Books
Lease as the case may be (as such conditions exist as of the Effective
Date).
10. PARTY CITY EARNOUT ESCROW.
(a) Contemporaneously with the execution hereof, Seller has delivered to
Escrow Agent, and Escrow Agent hereby acknowledges receipt of, the sum of
Two Million One Hundred Forty-six Thousand and No/100 Dollars
($2,146,000.00) (the "PARTY CITY EARNOUT ESCROW") as and for that portion
of the Purchase Price attributable to the value of the tenancy under the
Party City Lease.
(b) Escrow Agent agrees to immediately deposit the Party City Earnout
Escrow in a money market account in a financial institution approved by
Seller and Buyer, in their respective reasonably discretion, from which
immediate withdrawal is available without penalty, and to hold and
disburse the same, together with any interest earned thereon, in
accordance with this Agreement, Interest earned on the Party City Earnout
Escrow shall be deemed to be a part of the Party City Earnout Escrow, and
shall be disbursed to the party entitled to the Party City Earnout Escrow
as a part thereof.
(c) Upon the satisfaction of the Party City Conditions (as hereinafter
defined), Seller shall provide Escrow Agent (with a contemporaneous copy
to Buyer) with: (i) a written certification that the satisfaction of the
Party City Conditions has occurred, and (ii) Seller's written direction to
Escrow Agent to release the Party City Earnout Escrow to Seller
(collectively, the "PARTY CITY NOTICE"). Within one (1) business day of
Escrow Agent's receipt of the Earnout Notice, Escrow Agent shall disburse
the Party City Earnout Escrow to Seller. For purposes of this SECTION 10,
the term "PARTY CITY CONDITIONS" shall mean: (i) Party City has opened for
business with the public at the Property for at least one calendar day as
required in the Party City Lease, (ii) Party City has commenced paying
full rent and expense reimbursements as required under the Party City
Lease, and (iii) Party City shall have executed and delivered an estoppel
certificate to Buyer in substantially the same form and substance as was
delivered to Buyer prior to the Effective Date (such prior estoppel having
been delivered May 10, 2004) but does not contain any express exceptions
regarding Seller's delivery of the premises to Party City nor the
acceptance of the premises by Party City.
If item (ii) above occurs but either of items (i) or (iii) above have not
yet then occurred, then Seller shall be entitled to collect and receive
any and all such amounts under item (ii) until such time as the Party City
Earnout Escrow is disbursed hereunder to either
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Seller or Buyer, as the case may be (and Buyer will promptly pay over to
Seller any such amounts that are received by Buyer).
If item (ii) above occurs but item (i) above has not yet then occurred,
then Buyer shall undertake commercially reasonable efforts to enforce
Party City's obligation to open for business as required under the Party
City Lease (as such obligation existed as of the Effective Date) and if
item (i) above is not satisfied within 90 days of the date the Party City
Lease requires same to occur despite Buyer's efforts to enforce the
requirements Party City Lease, then Seller shall be entitled to undertake
its efforts to procure the Party City Replacement Tenant (as defined
below) as provided below.
(d) In the event Party City properly and timely terminates the Party
City Lease pursuant to Section 2.05 of the Party City Lease, Buyer shall
deliver written notice to Seller of such termination (the "PARTY CITY
TERMINATION NOTICE") and, in such event, Seller shall have the right (but
not the obligation) to procure one or more replacement tenants for the
Party City demised premises (collectively, the "PARTY CITY REPLACEMENT
TENANT") on or prior to December 31, 2004. If Seller procures the Party
City Replacement Tenant on or prior to December 31, 2004, then the Party
City Earnout Escrow shall be disbursed by Escrow Agent as follows:
(i) First, to Buyer, an amount equal to the DIFFERENCE BETWEEN (A)
the amount of the Party City Earnout Escrow, LESS (B) the
Replacement Tenant Earnout Value; and
(ii) Second, to Seller, any remaining portion of the Party City
Earnout Escrow.
(e) If Party City properly and timely terminates the Party City Lease
pursuant to Section 2.05 of the Party City Lease and Seller fails to
procure the Party City Replacement Tenant on or prior to December 31,
2004, then (i) the Party City Earnout Escrow shall be disbursed by Escrow
Agent to Buyer within one (1) business day after delivery to the Escrow
Agent of a written certification from Buyer (with a contemporaneous copy
to Seller) that the foregoing has occurred and directing Escrow Agent to
so disburse the Party City Earnout Escrow, and (ii) Buyer shall provide
Seller with a demand promissory note evidencing Buyer's contingent
obligation to pay to Seller the Replacement Tenant Earnout Value as
provided in the last sentence of this SECTION 10(e) (with Seller only
having the right to make demand on such promissory note upon the
procurement of the Party City Replacement Tenant as provided below).
Notwithstanding the foregoing, despite the disbursement of the Party City
Earnout Escrow to Buyer in accordance with this SECTION 10(e), Seller
shall continue to have the right (but not the obligation) to procure the
Party City Replacement Tenant on or prior to May 20, 2006. If Seller
procures the Party City Replacement Tenant after December 31, 2004, but on
or prior to May 20, 2006, then Buyer shall pay to Seller (or Seller's
designee) an amount equal to the Replacement Tenant Earnout Value within
three (3) business days after the rent commencement date under the lease
agreement for the Party City Replacement Tenant. The foregoing obligation
to pay, if applicable, shall survive the expiration or termination of this
Agreement.
Page 10
(f) The Party City Replacement Tenant and the lease agreement for the
Replacement Tenant are subject to the requirements and limitations as are
applicable to the Post-Closing Leasing Rights as set forth in the
Contract. As used hereunder, the term "REPLACEMENT TENANT EARNOUT VALUE"
means the result of dividing the Party City Replacement Tenant's net
annual base rent by 7.42%. In no event shall the Replacement Tenant
Earnout Value exceed the amount of the Party City Earnout Escrow. Seller
shall (i) have the Post-Closing Leasing Rights in connection with Seller's
efforts to procure the Party City Replacement Tenant and (ii) be
responsible for all costs and expenses required to place the Replacement
Tenant into the Party City demised premises including (but not limited to)
brokerage commissions, tenant improvement allowances, free rent periods,
and like payment obligations and inducements as are applicable to the
Post-Closing Leasing Rights as set forth in the Contract.
(g) Except as may be expressly set forth herein, the premises for the
Party City Lease does not constitute any portion of the Post-Closing
Improvements.
11. MISCELLANEOUS.
(a) All notices, requests, consents and other communications hereunder
shall be sent to each of the following parties and be in writing and shall
be personally delivered, sent by Federal Express or other overnight or
same day courier service providing a return receipt, (and shall be
effective when received, when refused or when the same cannot be
delivered, as evidenced on the return receipt) to the following addresses:
If to Buyer: 0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attention: G. Xxxxxx Xxxxxxx
Tel. No. 000-000-0000
Fax No. 000-000-0000 and
630-218-4900
with a copy to: The Law Offices of Xxxxxxx X. Xxxxxxxxx
0000 Xxxxxxxxxxx Xxxx
0xx Xxxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
Tel. No. 000-000-0000
Fax No. 000-000-0000
If to Seller: c/o ASG Real Estate Company
0000 X. Xxxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxx
Tel. No. 000-000-0000
Fax No. 000-000-0000
Page 11
Copy to: Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.
5400 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Tel No. 000-000-0000
Fax No. 000-000-0000
If to Escrow Agent: 000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxx
Tel No.: 000-000-0000
Fax No.: 000-000-0000
(b) This Agreement may be executed in counterparts and shall constitute
an agreement binding on all parties notwithstanding that all parties are
not signatories of the original or the same counterpart. Furthermore, the
signatures from one counterpart may be attached to another to constitute a
fully executed original. The Agreement may be executed by facsimile.
(c) Escrow Agent agrees to deliver to Buyer and to Seller, on a monthly
basis, a copy of the bank statements of accounts of the Escrow Deposits.
Such monthly statements shall be delivered to:
(i) As to Buyer: Inland Retail Real Estate Trust, Inc., 000
Xxxxxxx Xxxxx, Xxxxx 000, Xxxx 00, Xxxx Xxxx, Xxxxxxx 00000
(telephone: 000-000-0000; facsimile: 407-688-6543); and
(ii) As to Seller: c/o ASG Real Estate Company, Attn: Xxxxx Xxxxxx,
0000 X. Xxxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxx 00000
(telephone: 000-000-0000; facsimile: 214-390-1919).
(d) Escrow Agent shall have the right to resign as Escrow Agent
hereunder at any time by giving sixty (60) days' prior written notice of
such resignation to all of the other parties hereto. In the event that
Escrow Agent shall at any time fail or refuse to serve or shall resign as
Escrow Agent hereunder, then Seller and Buyer shall have the right to
designate a successor Escrow Agent which shall be an independent third
party. If any such successor Escrow Agent hereunder shall at any time fail
or refuse to act as Escrow Agent in accordance with the provisions hereof,
then a further successor shall be selected by Seller and Buyer.
(e) The rights of Seller under this Agreement are not assignable without
the prior written consent of Buyer, which consent may be granted or
withheld at Buyer's sole discretion unless the assignment is made to an
entity which controls, is controlled by or is under common control with
Seller, in which case Buyer's consent will not be required. In any event,
the assignee must assume the obligations of Seller hereunder pursuant to
an agreement in form and substance reasonably acceptable to Buyer.
Page 12
(f) This Agreement shall not be recorded. Seller and Buyer shall execute
and acknowledge a memorandum of this Agreement (the "MEMORANDUM OF
AGREEMENT") simultaneously with their execution hereof, which Memorandum
of Agreement will be promptly recorded in the Real Property Records of
Tarrant County, Texas. In the event Buyer desires to sell the Property
during the term of this Agreement, the Property shall be conveyed subject
to the terms and provisions of this Agreement, and Buyer shall cause the
purchaser to execute and deliver to Seller an assignment and assumption of
this Agreement in form and substance reasonably satisfactory to Seller. In
the alternative, at Buyer's option, Buyer, Seller and Escrow Agent shall
enter into a written agreement declaring this Agreement to be null and
void and of no further force and effect, in which event all funds
remaining in the Post-Closing Construction Escrow, the Master Lease Rent
Escrow and the TILC Escrow as of the effective date of such written
agreement shall be immediately disbursed to Seller notwithstanding any
provision contained herein or in the Contract, and the Parties shall have
no further obligations to each other hereunder.
(g) This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors and assigns, and shall be governed
and construed in accordance with the laws of the State of Texas. No
modification, amendment or waiver of the terms hereof shall be valid or
effective unless in writing and signed by Seller and Buyer. If there is
any conflict between the terms of this Agreement and the terms of the
Contract, the terms of the Contract shall control in all events.
[The balance of this page was intentionally left blank.]
Page 13
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be signed and delivered as of the day and year first above written.
BUYER:
INLAND WESTERN WATAUGA LIMITED
PARTNERSHIP,
an Illinois limited partnership
By: Inland Western Watauga GP, LLC,
a Delaware limited liability company
General Partner
By: Inland Western Retail Real Estate
Trust, Inc.,
a Maryland corporation
Sole Member
By: /s/ G. Xxxxxx Xxxxxxx
--------------------------------
Name: G. XXXXXX XXXXXXX
-------------------------------
Title: Authorized Agent
------------------------------
SELLER:
ASG WATAUGA PAVILION, LTD.,
a Texas limited partnership
By: ASG REAL ESTATE COMPANY,
a Texas corporation
its General Partner
By:
--------------------------------------
Name:
------------------------------------
Its:
-------------------------------------
Signature Page
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be signed and delivered as of the day and year first above written.
BUYER:
INLAND WESTERN WATAUGA LIMITED
PARTNERSHIP,
an Illinois limited partnership
By: Inland Western Watauga GP, LLC,
a Delaware limited liability company
General Partner
By: Inland Western Retail Real Estate
Trust, Inc.,
a Maryland corporation
Sole Member
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
SELLER:
ASG WATAUGA PAVILION, LTD.,
a Texas limited partnership
By: ASG REAL ESTATE COMPANY,
a Texas corporation
its General Partner
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Name: XXXXX X. XXXXXX
------------------------------------
Its: VICE PRESIDENT
-------------------------------------
Signature Page
ESCROW AGENT:
CHICAGO TITLE INSURANCE
COMPANY
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------------
Name: /s/ XXXXX X. XXXXXX
-------------------------------------------
Its: AVP
--------------------------------------------
Signature Page
