Exhibit 10.136
HOLDBACK AGREEMENT
This HOLDBACK AGREEMENT (this "Holdback Agreement") is made and entered
into as of the 13th, day of May, 2004, by and among Lansing Pavilion, LLC
(hereinafter referred to as "Seller"), Inland Western Lansing Eastwood, L.L.C.,
(hereinafter referred to as "Purchaser"), and Chicago Title and Trust Company
(hereinafter referred to as "Escrow Agent") having as its address ▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Purchase and Sale Agreement dated as of
the 29th day of March, 2004 (collectively, the "Contract"), Purchaser acquired
on and as of the date hereof from Seller certain real property commonly known as
Eastwood Towne Center Shopping Center located in Lansing, Michigan (the
"Property"); and
WHEREAS, one of the tenants in the Property is Dick's Sporting Goods
("Dick's") under a lease, dated June 28, 2001 (the "Lease"); and
WHEREAS, the Lease provides that until Walmart and Sam's open their doors
for business within the Property, Dick's has the option of paying percentage
rent based on sales, rather than the Minimum Rent (as defined in the Lease) of
$450,000.00 per year ($37,500.00 per month) (the "Minimum Rent"); and
WHEREAS, Dick's has elected to pay percentage rent based on sales because
Walmart and Sam's have not yet opened for business; and
WHEREAS, Seller and Purchaser reasonably expect that Walmart and Sam's
will open for business in approximately September, 2004, at which time Dick's
will be required to stop paying percentage rent and will be required to start
paying Minimum Rent; and
WHEREAS, Purchaser and Seller negotiated the purchase price of the
Property based upon the assumption that at the closing of this transaction
("Closing") Dick's would be paying Minimum Rent; and
WHEREAS, if Dick's was paying Minimum Rent, the total purchase price of
the Property attributable to the Lease would have been $5,480,453.00
($450,000.00 x a capitalization rate of 8.211%); and
WHEREAS, Purchaser and Seller agreed that only $1,644,136.00 of the
$5,480,453.00 attributable to the Lease would be paid ($135,000.00 x
capitalization rate of 8.211%), leaving a balance due of the purchase price
attributable to the Lease of $3,836,317.00; and
WHEREAS, Seller and Purchaser have agreed that an amount equal to
$3,836,317.00 (the "Escrow Deposit") will be held back from the purchase price
and deposited with Escrow Agent at Closing and will then be held and disbursed
in accordance with this Holdback Agreement; and
WHEREAS, Escrow Agent is willing to accept the Escrow Deposit and hold
and disburse same in accordance with the terms and conditions set forth below.
NOW, THEREFORE, for and in consideration of the premises hereto, the
covenants and agreements hereinafter made, and for Ten and 00/100 Dollars
($10.00) in hand paid to Escrow Agent, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. DEPOSIT. Purchaser hereby deposits with Escrow Agent, and Escrow
Agent hereby acknowledges receipt of the Escrow Deposit. Escrow Agent hereby
agrees to deposit the Escrow Deposit into an interest bearing account with U.S.
Bank National Association or other depository reasonably satisfactory to
Purchaser, Seller and Escrow Agent with interest accruing and added to the
Escrow Deposit. The federal taxpayer identification of Seller is as follows:
▇▇-▇▇▇▇▇▇▇.
2. TERM. The term of this Holdback Agreement shall commence on the date
hereof and end on the earlier of (the "Expiration Date") (i) the Minimum Rent
Date (as hereinafter defined) or (ii) May ______, 2005.
3. MONTHLY REPORTS. At the written request of Seller, made no more than
once each calendar month, Purchaser shall give Seller, within five (5) business
days of such request, a written report on the status of Walmart and Sam's
opening their stores for business. In addition, if there is any reason that
Purchaser believes that Dick's will not start paying Minimum Rent when Walmart
and Sam's opens for business, Purchaser shall so notify Seller in such written
reports. If Purchaser indicates that there may be a problem or issue with Dick's
paying Minimum Rent when Walmart and Sam's opens for business, Seller and
Purchaser shall confer and the parties shall work together to resolve, if
possible, any such problem.
4. NOTIFYING DICK'S. When Walmart and Sam's open for business,
Purchaser shall take reasonable action to ensure that Dick's knows that they are
open for business and that Dick's begins to pay Minimum Rent instead of
percentage rent based on sales.
5. MINIMUM RENT DATE. Purchaser covenants and agrees that as promptly
as is reasonably possible and in any event not more than ten (10) days after the
date upon which Dick's is obligated to and commences paying the Minimum Rent
pursuant to the Lease, Purchaser shall deliver notice thereof ("Purchaser's
Notice") to Escrow Agent and Seller. The "Minimum Rent Date" is the date that is
the later of (a) the date upon which Escrow Agent receives Purchaser's Notice or
(b) the date upon which the Escrow Deposit is received by Seller's bank account
as described below.
6. DISBURSEMENT OF ESCROW DEPOSIT. If Purchaser's Notice is received by
Escrow Agent on or before May ____, 2005, Escrow Agent shall upon receipt
thereof, without requirement of further direction from any party, disburse the
Escrow Deposit to Seller. If Purchaser's Notice is not received on or before May
___, 2005 and provided Escrow Agent has not received notice of a Purchaser
Default, as defined and provided in paragraph 7 below, Escrow Agent shall,
without requirement of further direction from any party, disburse the Escrow
Deposit to Purchaser. Upon disbursement of
the Escrow Deposit to either party, this Holdback Agreement shall terminate.
Disbursement of the Escrow Deposit required by this Holdback Agreement to be
made to Seller shall be wire transferred to Seller as follows:
Lansing Pavilion, LLC
c/o The Huntington National Bank
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Acct No.: 01651110775
ABA No.: ▇▇▇▇▇▇▇▇▇
7. PURCHASER DEFAULT. Notwithstanding the foregoing, in the event that
Walmart and Sam's have opened for business and Dick's does not commence paying
Minimum Rent but the reason for such non-payment is the material non-performance
of Purchaser's obligations under the Lease arising from and after the Closing or
Purchaser's negligence or willful misconduct or in the event Dick's has
commenced paying Minimum Rent prior to May ____, 2005 but Purchaser has failed
to timely provide Purchaser's Notice with respect to same (as to any such
non-performance, negligence, willful misconduct or failure, "Purchaser
Default"), the Escrow Deposit shall not be disbursed to Seller or Purchaser
until both such parties have mutually agreed in writing on its disposition and
instructed the Escrow Agent accordingly or until a court of competent
jurisdiction determines the Escrow Deposit's disposition. In the event that
Escrow Agent receives written notice from Seller or Purchaser that a Purchaser
Default has occurred or is occurring, Escrow Agent shall not disburse the Escrow
Deposit to Purchaser even if May ____, 2005 occurs; provided that if Escrow
Agent has not received such notice of Purchaser Default on or prior to May ___,
2005, Escrow Agent shall disburse the Escrow Deposit in accordance with
Paragraph 6 hereof without any further direction from either party hereto..
8. ESCROW ADMINISTRATION. The costs of administration of this Holdback
Agreement by Escrow Agent in the sum of ________________________ Dollars
($_________________) shall be shared equally by Seller and Purchaser. This
Holdback Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, principals, successors and assigns and shall
be governed and construed in accordance with the laws of the State of Illinois.
No modification, amendment or waiver of the terms hereof shall be valid or
effective unless in writing and signed by all of the parties hereto. This
Holdback Agreement may be executed in multiple counterpart originals, each of
which shall be deemed to be and shall constitute an original. If there is any
conflict between the terms of this Holdback Agreement and the terms of the
Contract, the terms of this Holdback Agreement shall control.
9. NOTICES. All notices, requests, consents and other communications
hereunder shall be sent to each of the following parties and be in writing and
shall either be: (i) delivered by facsimile transmission, or (ii) personally
delivered, or (iii) 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 Seller: Lansing Pavilion, LLC
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and J.R. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
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Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & Shohl LLP
1900 Chemed Center
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser: Inland Western Lansing Eastwood, L.L.C.
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to: The Inland Real Estate Group, Inc.
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Escrow Agent: Chicago Title Insurance Company
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
10. COUNTERPARTS. This Holdback 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. This Holdback Agreement may be
executed by facsimile.
11. REPORTING. Escrow Agent agrees to deliver to Seller and Purchaser,
on a monthly basis,
a copy of the bank statement of account of the Escrow Deposit. Such monthly
statements shall be delivered to the foregoing notice addresses.
12. ESCROW AGENT'S LIABILITY. Escrow Agent shall have no liability
whatsoever arising out of or in connection with its activity as escrow agent
provided it does not act in bad faith and Seller and Purchaser jointly and
severally agree to indemnify and hold harmless Escrow Agent from all loss, cost,
claim, damage, liability and expenses (including reasonable attorneys' fees)
which may be incurred by reason of its acting as escrow agent unless caused by
Escrow Agent's bad faith or willful disregard of the terms of this Holdback
Agreement.
13. RELIANCE. Escrow Agent shall be entitled to rely upon any judgment,
certification, demand or other writing delivered to it hereunder without being
required to determine the authenticity or the correctness of any fact stated
therein, the propriety or validity thereof, or the jurisdiction of a court
issuing any such judgment. Escrow Agent may act in reliance upon (x) any
instrument or signature believed to be genuine and duly authorized, and (y)
advice of counsel in reference to any matter or matters connected therewith.
14. LEGAL FEES. In the event of a dispute concerning disposition of the
Escrow Deposit, the party to whom the Escrow Deposit is finally awarded by a
court of competent jurisdiction shall be entitled to be reimbursed by the other
party for its reasonable legal fees incurred in the dispute.
(SIGNATURES ON FOLLOWING PAGE)
IN WITNESS WHEREOF, each of the parties hereto has caused this Holdback
Agreement to be signed and delivered as of the day and year first above written.
PURCHASER:
INLAND WESTERN LANSING EASTWOOD, L.L.C., a
Delaware limited liability company
By: Inland Western Retail Real Estate Trust, Inc., a
Maryland corporation, its sole member
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Asst. Secretary
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(Signatures Continued On Next Page)
SELLER:
LANSING PAVILION, LLC, a Michigan limited liability
company
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Real Estate, Inc., its Manager
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: President
By:
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As Its:
ESCROW AGENT:
CHICAGO TITLE AND TRUST COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: AVP
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