Exhibit
10.5


 


ESCROW
AGREEMENT


(Earn
Out Purchase Price – Pick’n Save Center)


 


 


This Escrow Agreement (this “Agreement”)
is entered into as of the 11th day of July, 2014, by and between SOUTH MAIN CENTER, INC., a Wisconsin corporation (“Seller”),
and IREIT WEST BEND MAIN, L.L.C., a Delaware limited liability company (“Purchaser”), and Chicago Title
Insurance Company (“Escrow Agent”).


 


 


RECITALS


 


A.As of the effective date hereof,
Purchaser has purchased from Seller that certain property located in West Bend, Wisconsin described on Exhibit “A”
attached hereto and incorporated herein (the “Shopping Center”), pursuant to the terms of that certain
Purchase and Sale Agreement dated April 4, 2014 (as amended, the “Purchase Agreement”).


 


B.As of the effective
date hereof, Seller and Purchaser have entered into that certain Post Closing and Indemnity Agreement (“Post Closing
Agreement”), a copy of which is attached hereto as Exhibit “B” and incorporated herein.


 


C. Pursuant
to Section 2 of the Post Closing Agreement, upon satisfaction of the terms and conditions
set forth in the Post Closing Agreement, Seller shall be entitled to payments of the Earnout Purchase Price, which may be earned
and paid at one or more Earnout closings.


 


D.Seller
and Purchaser have agreed that Purchaser shall deposit the Earnout Purchase Price with respect
to the Unbuilt Vacant Space (“New Building Earnout Price”), as further detailed herein, with Escrow
Agent, to be held and disbursed in accordance with the terms of this Agreement.


 


 


AGREEMENTS


 


NOW, THEREFORE, for and in consideration of
Ten and No/100 Dollars ($10.00), the mutual covenants and agreements contained herein, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by the parties hereto, Seller, Purchaser, and Escrow Agent hereby
agree as follows:


 


1.Recitals; Capitalized
Terms. The above recitals are incorporated herein for all purposes. Any capitalized term that is not defined herein shall have
the same meaning that is ascribed to it in the Post Closing Agreement.




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2.Acceptance by
Escrow Agent. Escrow Agent hereby accepts appointment as escrow agent and agrees to serve under the terms of this Agreement
and perform the duties herein particularly described.


 


3.Deposit of Funds
by Purchaser. (a) From time to time as Seller constructs the Unbuilt Vacant Space (the “New Building Improvements”),
but not more often than monthly, Seller shall submit to Purchaser and Escrow Agent written evidence and supporting documentation
reasonably acceptable to Purchaser of the costs Seller has incurred to date (or from the date of the last Expense Update Report,
as applicable) (each, an “Expense Update Report”). Each Expense Update Report shall identify the New
Building Improvements to which it pertains and the dollar amounts so expended by Seller.


 


(b) Within five (5) business
days after receipt of the Expense Update Report, Purchaser shall deposit with Escrow Agent the amount shown on such Expense Update
Report; provided, however, in no event shall Purchaser be required to deposit any sums in excess of the New Building Earnout Price.
If Purchaser has any objections to any Expense Update Report or requires additional documentation, Purchaser shall notify Seller
in writing (the “Objection Notice”) within such five (5) business day period, setting forth the specific
objection or information required and the dollar amount to which such objection or request applies (the “Objection
Amount”); provided that (i) Purchaser shall be required to timely deposit in escrow the amount set forth in such
Expense Update Report less the Objection Amount; (ii) upon receipt of the additional information or Seller’s response resolving
the objection in the Objection Notice, Purchaser shall deposit the Objection Amount within three (3) business days; and (iii) in
no event shall the foregoing right of Purchaser to object or request additional information be deemed a right to approve any construction
budget or costs associated with the construction of the New Building Improvements, it being agreed and acknowledge that the foregoing
right is solely to permit Purchaser to request additional documentation and to verify the Expense Update Report is not front-loaded
and accurately reflects the costs incurred to date.


 


(c)Within five (5)
business days after Seller’s satisfaction of the Earnout Requirements with respect to the New Building Improvements (“New
Building Deposit Deadline”), Purchaser shall deposit the difference between the New Building Earnout Price and the
amount currently held in escrow by the Escrow Agent. The Escrow Agent shall disburse
payments of the New Building Earnout Price at one or more Earnout closings, as further set forth in the Post Closing Agreement.


 


(d)If Purchaser fails
to make any payments or deposits required by this Agreement on the date such payment or deposit was due, interest
shall accrue on such delinquent amounts at a fixed rate equal to Eight and 00/100 percent (8.0%) per annum after such payment or
deposit was due until such delinquent amounts (together with accrued interest) are paid in full. The right to charge interest on
delinquent amounts shall be in addition to any other rights and remedies Seller may have pursuant to the Post Closing Agreement.


 




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(e)Escrow Agent accepts
the New Building Earnout Price deposited pursuant to the terms hereof in trust to be disbursed only in accordance with this Agreement
and the terms of the Post Closing Agreement. The New Building Earnout Price shall be held by Escrow Agent in one or more interest-bearing
and federally-insured accounts (collectively, the “Account”) at financial institutions acceptable
to Seller and Purchaser (collectively, the “Bank”). As used herein, the term “financial institution”
shall mean a bank, savings association or savings bank whose accounts are insured by the federal government.


 


4.Obligations of
Escrow Agent. Purchaser and Seller hereby agree that the following provisions shall control with respect to the rights, duties,
liabilities, and privileges of Escrow Agent hereunder: (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 (other than this Agreement); (b) Escrow Agent acts hereunder only as
a depository and agent for Purchaser and Seller; and (c) Escrow Agent shall be protected in acting upon any written notice, request,
waiver, consent, certificate, receipt, authorization, power of attorney, or other paper or documents which Escrow Agent in good
faith believes to be genuine and what it purports to be.


 


5.Fee to Escrow
Agent. Escrow Agent shall charge a fee in the amount of $500.00 in connection with this Agreement. Seller and Purchaser shall
each be responsible for payment of one-half (1/2) of such fee.


 


6.Termination.
This Agreement shall be terminated upon the completion of all of the New Building Improvements and Escrow Agent’s payment
to Seller of the New Building Earnout Price; provided, however, if Seller defaults under the terms of that certain Construction
Management Agreement by and between Seller and Purchaser (a copy of which is attached hereto as Exhibit “C”
and incorporated herein) and Purchaser terminates such Construction Management Agreement and/or elects to take over the Work (as
such term is defined in the Construction Management Agreement) as a result of such default, Purchaser shall notify Escrow Agent
in writing of same, with a copy of such notice to Seller, and any funds held by Escrow Agent pursuant to the terms of this Agreement
shall be released to Purchaser five (5) business days after Escrow Agent’s receipt of such notice, but only after Seller
is first reimbursed for all reasonable out of pocket expenses actually incurred under the Construction Management Agreement, such
cost not to exceed the New Building Earnout Price.




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7.Notices. Any
notices or communications required or permitted to be delivered hereunder must be in writing and shall be deemed to be delivered
upon receipt if delivered personally, sent by facsimile, or deposited in the United States Mail, certified, return receipt requested,
postage prepaid, addressed to Seller or Purchaser, as the case may be, at the following addresses and/or facsimile numbers:


 


	 	
        If to Seller:

         

        South Main Center, Inc.

        2001 W. Beltline Highway, Suite 200

        Madison, Wisconsin 53717

        Attn: Matthew Prescott

        Telephone: (608) 250-2099

        Facsimile:(608) 250-2093

         

        With Copy To:

         

        Whyte Hirschboeck Dudek S.C.

        555 E. Wells Street, Suite 1900

        Milwaukee, Wisconsin 53202

        Attn: Brad Dallet

        Telephone:(414) 978-5525

        Facsimile:(414) 223-5000

         

        If to Purchaser:

         

        c/o Inland Real Estate Income Trust, Inc.

        Attn: President

        2901 Butterfield Road

        Oak Brook, Illinois 60523

        Telephone: (630) 218-4948

        Facsimile: (630) 218-4935

         

        With a Copy to:

         

        The Inland Real Estate Group, Inc., Law Department

        Attn: Brett Smith

        2901 Butterfield Road

        Oak Brook, Illinois 60523

        Telephone: (630) 218-2885

        Facsimile: (630) 218-4900

         



 




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The addresses and facsimile numbers for providing
notice may be changed by providing notice of the said change pursuant to this paragraph.


 


8.Governing Law.
The laws of the State of Wisconsin shall govern the rights and duties of the parties hereto and the validity, construction, enforcement
and interpretation hereof; and the parties hereto hereby irrevocably agree that in the event of any dispute involving this Agreement,
venue for such dispute shall lie in any court of competent jurisdiction in Washington County, Wisconsin.


 


9.Complete Agreement.
This instrument embodies the entire agreement among the parties, supersedes all prior agreements and understandings, if any, relating
to the subject matter hereof, and may be amended only by an instrument in writing executed collectively by each of the parties
hereto.


 


10.Counterparts.
This Agreement may be executed in a number of identical counterparts, each of which shall be deemed an original for all purposes
and all of which constitute, collectively, one agreement; but, in making proof of this Agreement, it shall not be necessary to
produce or account for more than one such counterpart.


 


11.Legal Construction.
In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof.


 


12.Successors and
Assigns. This instrument shall be binding upon and shall inure to the benefit of Seller, Purchaser and Escrow Agent and the
respective representatives, successors and assigns of each.


 


13.Attorney’s
Fees. If either Seller or Purchaser is a prevailing party in any legal proceeding brought under or with relation to this Agreement,
then such party shall be entitled to recover from the non-prevailing party all costs of such proceeding and reasonable attorneys’
fees. The provisions of this paragraph shall survive the termination of this Agreement.


 


[Signature Page(s) to Follow]




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[Signature Page for Seller]


 


EXECUTED as of the date first set forth above.


 


	 	Seller:
	 	 
	 	SOUTH MAIN CENTER, INC., a Wisconsin corporation
	 	 	 
	 	 	 
	 	By:	/s/ Matthew P. Prescott
	 	 	Matthew P. Prescott, President


 


 


	THE STATE OF WISCONSIN	§
	 	§
	COUNTY OF MILWAUKEE	§


 


This
instrument was acknowledged before me on July __, 2014, by Matthew P. Prescott, the President of South Main Center, Inc., a Wisconsin
corporation, on behalf of said corporation.


 


	 	 
	 	Notary Public in and for the State of Wisconsin


 




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[Signature Page for Purchaser]


 


EXECUTED as of the date first set forth above.


 


	 	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
	 	 	Its:	Assistant Secretary


 


 


	THE STATE OF ILLINOIS	§
	 	§
	COUNTY OF DUPAGE	§


 


This instrument was acknowledged
before me on this the _____ day of July, 2014, by __________________, _____________________ of Inland Real Estate Income Trust,
Inc., the sole member of IREIT West Bend Main, L.L.C., a Delaware limited liability company.


 


 


	 	 
	 	Notary Public in and for the State of __________


 




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[Signature
Page for Title Company]


 


EXECUTED as of the date first set forth above.


 


	 	Title Company:
	 	 
	 	Chicago Title Insurance Company
	 	 	 
	 	By:	 
	 	Name:	 
	 	Its:	 


 


	THE STATE OF __________	§
	 	§
	COUNTY OF __________	§


 


 


This instrument was acknowledged
before me on this the _____ day of July, 2014, by __________________, _____________________ of CHICAGO TITLE INSURANCE COMPANY.


 


 


 


	 	 
	 	Notary Public in and for the State of __________


 




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EXHIBIT "A"


 


Description of Shopping Center


 


[See attached]


 




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EXHIBIT “B”


 


Post Closing Agreement


 


[See attached]




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EXHIBIT “C”


 


Construction Management Agreement


 


[See attached]