Exhibit 10.4

 

POST CLOSING AND INDEMNITY AGREEMENT

 

THIS POST CLOSING AND INDEMNITY AGREEMENT (“Agreement”) is dated this 11th of
July, 2014 by SOUTH MAIN CENTER, INC., a Wisconsin corporation (“Seller”), and
IREIT WEST BEND MAIN, L.L.C., a Delaware limited liability company (“Purchaser”)
in connection with the acquisition of the Pick’n Save Center in West Bend,
Wisconsin (referred to as the “Property” as defined in that certain Purchase and
Sale Agreement dated April 4, 2014 (as amended, “Contract”) by and between
Seller and Purchaser’s predecessor-in-interest, Inland Real Estate Acquisitions,
Inc. (“Inland”).

 

WHEREAS, Purchaser is the successor to Inland with respect to the Contract; and

 

WHEREAS, in connection with the acquisition of the Property from Seller,
Purchaser requires a confirmation of Seller to complete certain obligations
following the closing (the “Closing”) for the acquisition of the Property by
Purchaser; and it being acknowledged that Purchaser would not complete its
purchase of the Property without Seller’s execution of this Agreement; and

 

WHEREAS, in order to proceed to Closing, Purchaser requires Seller to make
certain undertakings, to obtain documents regarding or confirming certain
issues, and/or certifications as to the state of facts regarding such issues,
and further, Purchaser requires that Seller indemnify and hold harmless
Purchaser, and each of its successors, assigns, officers, directors, employees
and lenders (each an “Indemnified Party” and collectively, the “Indemnified
Parties”) harmless from any loss, cost or expense incurred by any Indemnified
Party, including costs and attorneys fees, (“Loss”) as a result of either
Seller’s failure to obtain the required documents, Seller’s failure to timely
complete its obligations as set forth herein, or any Loss that results from a
certification hereafter being incorrect.

 

NOW, THEREFORE, for good and valuable consideration including the mutual
promises contained herein, the parties hereto agree as follows:

 

1.                Tenant Reconciliations. Seller agrees to indemnify and hold
Purchaser, its lender and their respective successors and assigns harmless from
and against any claims relating to or arising out claims by any tenant to the
Property relating to reconciliations for periods ending prior to the Closing,
including, but not limited to, claims relating to refunds of real estate taxes.

POST CLOSING AND INDEMNITY AGREEMENT

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2.                Earnouts. Seller and Purchaser hereby acknowledge and agree
that the Property is not one hundred percent (100%) occupied at the time of
Closing with all tenants occupying their space, open for business and paying
full rent, including CAM, taxes and insurance current. Notwithstanding anything
to the contrary set forth in the Contract, Seller shall have twenty-four (24)
months following the date of Closing (“Earnout Period”) to receive additional
proceeds of up to $4,874,726.00 (“Earnout Purchase Price”) based upon an Earnout
Annual Base Minimum Rent of $370,042.00 divided by the Base Rent Divider of
7.5910% by leasing (i) the vacant space shown on Exhibit A attached hereto and
made a part hereof (the “Constructed Vacant Space”) and (ii) vacant space
located in a building(s) to be constructed by Seller after the date hereof
(“Unbuilt Vacant Space”), the Constructed Vacant Space and the Unbuilt Vacant
Space shall be collectively referred to herein as the “Earnout Space”);
provided, however, in no event shall the overall purchase price for the Property
exceed $23,997,286.00. During the Earnout Period, it shall be Seller’s
responsibility and sole cost and expense for leasing out and paying all costs
related to placing the tenants into the Earnout Space, including, but not
limited to, any commissions, tenant improvement allowances and concessions;
provided, however, no tenant shall be Seller or an affiliate of Seller. The
tenant for each Earnout Space and each lease for the Earnout Space shall be
subject to the leasing parameters attached hereto as Exhibit B. Seller is not
entitled to any portion of the Earnout Purchase Price until a Purchaser-approved
tenant under a Purchaser-approved lease for an Earnout Space has accepted its
space “as is” and takes total possession, has opened for business and commences
full rental payments, including CAM, taxes and insurance on a pro rata basis,
all applicable tenant improvement allowances and leasing commissions have been
paid in full and Purchaser has received an estoppel letter reasonably acceptable
to Purchaser from each such tenant (“Earnout Requirements”). Each Earnout
closing shall occur upon ten (10) business days advance written notice to
Purchaser that the Earnout Requirements have been satisfied and provided the
Earnout Period has not expired; provided, however, (a) Seller hereby
acknowledges that Seller waives its right to any remaining payments of the
Earnout Purchase Price if the Earnout Requirements for the Earnout Space have
not been satisfied during the Earnout Period, and (b) at the respective Earnout
closing, Seller shall deliver to Purchaser (if not previously delivered) a down
date endorsement to Purchaser’s Owner’s Policy of Title Insurance showing that
there are no mechanic’s or materialmens’ liens affecting Purchaser’s title to
the Property caused by Seller. During the Earnout Period and until tenants have
satisfied all requirements stated herein with respect to its respective Earnout
Space, Seller shall be responsible on a monthly basis for all CAM, taxes and
insurance due for the applicable Earnout Space, but in no event following the
expiration of the Earnout Period.

Purchaser shall act in a commercially reasonable manner and in good faith during
its review and determination of the approval of any new proposed tenant and/or
lease presented to Purchaser. Also, Purchaser agrees to respond to any request
for the approval of any new proposed tenant and/or lease presented to Purchaser
within ten (10) business days after receipt of such request and all reasonable
documentation required to evaluate such request by Purchaser. If Purchaser fails
to respond to such request within such 10-business day period and such failure
continues for a period in excess of five (5) business days after Purchaser’s
receipt of notice of such failure, then such proposed tenant and/or lease shall
be deemed approved by Purchaser.

POST CLOSING AND INDEMNITY AGREEMENT

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3.                Escrow Agreement. As part of the Closing, Seller shall place
in escrow with Chicago Title Insurance Company, pursuant to a mutually agreed
upon escrow agreement (“Escrow Agreement”), (i) an amount equal to $40,000.00
(“Roof Escrow Deposit”), such amount being agreed to by Seller and Purchaser as
the amount necessary to repair the roof on the vacant building located on the
Property to the north of the Pick ‘n Save grocery store, and (ii) an amount
equal to $100,000.00 (“Roundy’s Tax Escrow Deposit”), such amount being agreed
to by Seller and Purchaser as the maximum amount that Roundy’s Supermarkets,
Inc. may be owed due to overpayment of real estate taxes for calendar years 2012
and 2013. The Escrow Agreement shall set forth the terms of the disbursement of
the Roof Escrow Deposit and the Roundy’s Tax Escrow Deposit. Any Roof Escrow
Deposit and/or Roundy’s Tax Escrow Deposit remaining at the end of the Earnout
Period shall be disbursed to Purchaser.

4.                Further Assurances. Seller and Purchaser agree to cooperate
with each other following the closing to confirm any matter and execute any
document reasonably required by the other party in furthering of the Closing and
consistent with the requirements of the Contract.

5.                Defined Terms. All capitalized terms which are not expressly
defined herein shall have the meaning as set forth in the Contract.

6.                Indemnification. Seller agrees to indemnify and hold the
Indemnified Parties harmless from any Loss.

7.                Miscellaneous. This Agreement shall be binding upon and inure
to the benefit of the parties to this Agreement and their respective successors
and permitted assigns and may be executed in counterparts.

POST CLOSING AND INDEMNITY AGREEMENT

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SIGNATURE PAGE FOR

POST CLOSING AND INDEMNITY AGREEMENT

 

IN WITNESS WHEREOF, Purchaser and Seller have caused this Agreement to be
executed as of the day and year first above written.

 

 

  SELLER:          

SOUTH MAIN CENTER, INC., a

Wisconsin corporation

          By: /s/ Matthew P. Prescott   Name: Matthew P. Prescott   Title:
President                   PURCHASER:          

IREIT WEST BEND MAIN, L.L.C., a

Delaware limited liability company

          By:

Inland Real Estate Income Trust, Inc., a

Maryland corporation, its sole member

            By: /s/ Marcia L. Grant     Name: Marcia L. Grant     Title:
Assistant Secretary

 

 

POST CLOSING AND INDEMNITY AGREEMENT

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EXHIBIT A

 

CONSTRUCTED VACANT SPACE

 

(see attached)

 

 

 

 

POST CLOSING AND INDEMNITY AGREEMENT

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EXHIBIT B

 

LEASING PARAMETERS

 

(see attached)

 

 

 

 

POST CLOSING AND INDEMNITY AGREEMENT

 

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