EXHIBIT 10.4
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made and entered into as of the
[__] day of February, 2005, by and among Inland American Real Estate Trust,
Inc., a Maryland corporation (the "Company"), Inland Securities Corporation, a
Delaware corporation (the "Dealer Manager") and LaSalle Bank National
Association, a national banking association (the "Escrow Agent").
1. The Company does hereby open this escrow and Escrow Agent's sole
concern and duties shall be as specifically set forth herein: From time to time
during the course of this escrow, in connection with the Company's offering (the
"Offering") of up to 500,000,000 shares of common stock on a "best efforts"
basis (the "Shares") (exclusive of Shares offered and sold pursuant to the
Company's distribution reinvestment plan), Escrow Agent will receive from
subscribers deposits to be held in escrow in accordance with the terms hereof.
All such funds received by Escrow Agent shall be placed into an interest-bearing
account entitled "Inland American Real Estate Trust, Inc. Subscription Account"
(the "Escrow Account").
2. All deposits from each subscriber shall be accompanied by the
subscriber name, social security number, current address and investment amount.
3. Checks deposited in the Escrow Account from the various subscribers
shall be made payable to "LBNA/Escrow Agent for IARETI."
4. All parties understand and are aware that all funds received during
the course of the escrow and deposited in the Escrow Account must clear the
normal banking channels prior to the release of any funds.
5. The Company understands that it is not entitled to any funds received
into escrow in the event of cancellation of the Offering and in such event,
deposits shall be returned to the subscribers.
6. The parties agree that this is an impound escrow between the Company,
the Dealer Manager and the Escrow Agent. The Company and the Dealer Manager
agree that the subscribers who deposit into the Escrow Account are not a party
to this escrow.
7. All documents, including any instrument necessary for the negotiation
or other transfer of escrow assets, deposited simultaneously with the execution
of this Agreement are approved by the Company, and the Escrow Agent shall not be
obligated to inquire as to the form, manner of execution or validity of these
documents or any document hereafter deposited pursuant to the provisions hereof,
nor shall the Escrow Agent be obligated to inquire as to the identity, authority
or rights of the persons executing the same. The Escrow Agent shall be liable
under this Agreement only for its gross negligence or willful misconduct in the
performance of its duties expressly set forth in this Agreement. The Escrow
Agent shall have a lien on all securities, monies and documents deposited in
this escrow by each subscriber to secure Escrow Agent's reasonable compensation
and expenses and for judgments, attorneys' fees and other liabilities which the
Escrow Agent may incur or sustain by reason of this escrow, and the
undersigned agrees to pay to Escrow Agent, upon demand, amounts to satisfy all
such liabilities, fees and expenses. In case of conflicting demands upon it, the
Escrow Agent may withhold performance of this escrow until such time as the
conflicting demands shall have been withdrawn or the rights of the respective
parties shall have been settled by court adjudication, arbitration, joint order
or otherwise.
8. Until the termination of the Offering, the Company shall notify the
Escrow Agent of the Company's acceptance or rejection of each subscription
agreement as promptly as practicable, but in any event within ten (10) days of
its receipt, and of any subscription which is rescinded within five (5) days of
such rescission. If the Escrow Agent receives notice that a subscription is
rejected by the Company, the subscriber's deposit will be returned by the Escrow
Agent to the subscriber, without interest or deduction, as promptly as
practicable, but in any event within ten (10) days after its receipt of notice
from the Company that the subscription has been rejected. If a subscription is
rescinded, the Escrow Agent shall return to the subscriber the subscriber's
deposit, without interest or deduction, within seven (7) days of being notified
by the Company of such rescission. In the event the check of a subscriber whose
subscription has been rescinded has been negotiated (and if the funds
represented thereby have been disbursed to the Company), the Company shall
deposit with the Escrow Agent an amount of funds equal to the amount necessary
to be returned to the subscriber (or the Escrow Agent may deduct such amount
from any funds due to the Company under this Agreement). The Escrow Agent shall
not be liable for the failure to return a rejected or rescinded subscription if
the Company fails to notify the Escrow Agent of the rejection of rescission of
the corresponding subscription agreement.
9. Commencing with the date paid subscriptions have been received and
accepted for at least 200,000 Shares or $2,000,000 (the "Minimum Offering"),
provided such date is within one (1) year of the original effective date of the
Company's prospectus (such original effective date of the Company's prospectus
being the "Effective Date"), and ending on the Termination Date (the "Offering
Period"), the Escrow Agent shall:
(a) disburse to the Company on a weekly basis any funds received by
the Escrow Agent for accepted subscriptions (but not those funds of a
subscriber whose subscription has been rejected or rescinded of which the
Escrow Agent has been notified by the Company, or otherwise in accordance
with the Company's written request, and
(b) subject to SECTION 10 hereof, invest any funds held in the escrow
in such instruments as the Company may direct.
Upon termination of the Offering, which shall occur not later than twelve (12)
months after the Effective Date, provided however that, subject to
requalification in certain states, the Company may extend the Offering Period
from time to time, but in no event more than two years after the Effective Date
(the "Termination Date"), all amounts theretofore undistributed shall be
distributed to the Company, and this escrow shall close and be consummated in
its entirety. If subscriptions for at least the Minimum Offering have not been
received, accepted and paid for within one (1) year of the Effective Date, all
funds received will be promptly returned in full to subscribers, together with
their pro rata share of any interest earned thereon pursuant to instructions
made by the Company, upon which the Escrow Agent may conclusively rely. If such
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refund is made, Inland Real Estate Investment Corporation, an affiliate of the
Dealer Manager, will pay any escrow fees.
10. The funds deposited herein shall be invested in federally insured
bank accounts (E.G., savings accounts), short-term certificates of deposit
issued by a bank, short-term securities issued or guaranteed by the United
States government and any other investments permitted under Rule 15c2-4 of the
Securities Exchange Act of 1934, as amended, at the direction of the Company.
The interest on such investments shall, on a monthly basis while subscribers'
deposits remain in escrow and, if all conditions herein are met, when such
deposits are disbursed to the Company, be disbursed by the Escrow Agent to the
Company in accordance with SECTION 9 hereof.
11. The Company agrees to disburse to the Dealer Manager any funds due to
it for the Offering in accordance with the terms and conditions of the Dealer
Manager Agreement dated February [__], 2005 between the Company and the Dealer
Manager, provided that the Escrow Agent has disbursed to the Company the funds
due to the Company for the related subscriptions. The Dealer Manager shall
assist the Company in connection with the Company's compliance with this
Agreement. The Dealer Manager shall not have any lien on or security interest in
any securities, monies or documents deposited in this escrow.
12. Any notices which are required or desired to be given hereunder to the
parties hereto shall be in writing and may be given by mailing the same to the
address indicated below (or to such other address as either of the parties may
have theretofore substituted therefor by written notification to the other party
hereto), by registered or certified United States mail, postage prepaid. For all
purposes hereof, any notice so mailed by the Escrow Agent shall be treated as
though served upon the party to whom it was mailed at the time it is deposited
in the United States mail by the Escrow Agent whether or not such party
thereafter actually receives such notice. Notices to the Escrow Agent shall be
in writing and shall not be deemed to be given until actually received by the
Escrow Agent's trust department. Whenever under the terms hereof the time for
giving a notice or performing an act falls upon a Saturday, Sunday or bank
holiday, such time shall be extended to the Escrow Agent's next business day.
13. The Escrow Agent, when acting as the Escrow Agent hereunder,
undertakes to perform only such duties as are expressly set forth herein and the
Escrow Agent shall not be subject to, nor obliged to recognize, any other
agreement between, or direction or instruction of, the Company even though
reference thereto may be made herein; provided, however, this Agreement may be
amended at any time or times by an instrument in writing signed by the Company,
the Dealer Manager and Escrow Agent. In the event the Escrow Agent becomes
involved in or is threatened with litigation by reason hereof, it is hereby
authorized to and may deposit with the clerk of a court of competent
jurisdiction any and all funds held by it pursuant hereto, and thereupon the
Escrow Agent shall stand fully relieved and discharged of any further duties
hereunder.
14. If any property subject hereto is at any time attached, garnished or
levied upon, under any court order, or in case the payment, assignment,
transfer, conveyance or delivery of any such property shall be stayed or
enjoined by any court order, or in any case any order, judgment or decree shall
be made or entered by any court affecting such property, or any part
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thereof, then in any of such events, the Escrow Agent is authorized, in its sole
discretion, to rely upon and comply with any such order, writ, judgment or
decree, which it is advised by legal counsel of its own choosing is binding upon
it, and if it complies with any such order, writ, judgment or decree, it shall
not be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, even though such order, writ, judgment
or decree may be subsequently reversed, modified, annulled, set aside or
vacated.
15. This Agreement shall be construed, enforced and administered in
accordance with the internal laws, as opposed to the conflicts of laws
provisions, of the State of Illinois.
16. The Escrow Agent shall be entitled to reasonable fees in connection
with this Escrow, which fees shall be payable by the Company.
17. The Escrow Agent may resign at any time upon giving at least thirty
(30) days' prior written notice to the Company; provided, however, that no such
resignation shall become effective until the appointment of a successor escrow
agent which shall be accomplished as follows: The Company shall use its best
efforts to select a successor escrow agent within thirty (30) days after
receiving such notice. If the Company fails to appoint a successor escrow agent
within such time, the Escrow Agent shall have the right to appoint a successor
escrow agent. The successor escrow agent shall execute and deliver an instrument
accepting such appointment and it shall, without further acts, be vested with
all the estates, properties, rights, powers, and duties of the predecessor
escrow agent as if originally named as escrow agent. Upon delivery of such
instrument, the Escrow Agent shall be discharged from any further duties and
liability under this Agreement. The Escrow Agent shall be paid any outstanding
fees and expenses prior to transferring assets to a successor escrow agent.
18. Any notice required to be given hereunder by any of the parties hereto
shall be addressed as follows:
IF TO THE COMPANY: Inland American Real Estate Trust, Inc.
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
IF TO THE DEALER MANAGER: Inland Securities Corporation
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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IF TO ESCROW AGENT: LaSalle Bank National Association
Corporate Trust Department
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
19. The foregoing is subject to the following conditions:
(a) The obligations and duties of the Escrow Agent are confined to
those specifically enumerated in the escrow instructions. The Escrow Agent
shall not be subject to, nor be under any obligation to ascertain or
construe the terms and conditions of any other instrument, whether or not
now or hereafter deposited with or delivered to the Escrow Agent or
referred to in the escrow instructions, nor shall the Escrow Agent be
obligated to inquire as to the form, execution, sufficiency, or validity of
any such instrument nor to inquire as to the identity, authority, or rights
of the person or persons executing or delivering the same.
(b) The Escrow Agent shall not be personally liable for any act which
it may do or omit to do hereunder in good faith and in the exercise of its
own best judgment. Any act done or omitted by the Escrow Agent pursuant to
the advice of its attorneys shall be deemed conclusively to have been
performed or omitted in good faith by the Escrow Agent.
(c) If the Escrow Agent should receive or become aware of any
conflicting demands or claims with respect to this Agreement, or the rights
of any of the parties hereto, or any money, property, or instruments
deposited herein or affected hereby, the Escrow Agent shall have the right
in its sole discretion, without liability for interest or damages, to
discontinue any or all further acts on its part until such conflict is
resolved to its satisfaction and/or to commence or defend any action or
proceeding for the determination of such conflict. Notwithstanding any
other provision hereof, in the event of any dispute, disagreement or legal
action relating to or arising in connection with the escrow, the Escrow
Fund, or the performance of the Escrow Agent's duties under this Agreement,
the Escrow Agent will not be required to determine the controversy or to
take any action regarding it. The Escrow Agent may hold all documents and
funds and may wait for settlement of any such controversy by final
appropriate legal proceedings, arbitration, or other means as, in the
Escrow Agent's discretion, it may require. In such event, the Escrow Agent
will not be liable for interest or damage. Furthermore, the Escrow Agent
may, at its option, file an action of interpleader requiring the parties to
answer and litigate any claims and rights among themselves. The Escrow
Agent is authorized, at its option, to deposit with the Court in which such
interpleader action is filed all documents and funds held in escrow. The
Escrow Agent is further authorized to withhold from such deposit for its
own account an amount sufficient to compensate itself for all costs,
expenses, charges, and reasonable attorneys' fees incurred by it due to the
interpleader action. Upon initiating such action, the Escrow Agent shall be
fully released
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and discharged of and from all obligations and liability imposed by the
terms of this Agreement.
(d) The Company and Dealer Manager agree, jointly and severally, to
indemnify and hold the Escrow Agent, its officers, directors and employees
harmless from and against all costs, damages, judgments, attorney's fees
(whether such attorneys shall be regularly retained or specially employed),
expenses, obligations and liabilities of every kind and nature which the
Escrow Agent may incur, sustain, or be required to pay in connection with
or arising out of this Agreement, and to pay the Escrow Agent on demand the
amount of all such costs, damages, judgments, attorney's fees, expenses,
obligations, and liabilities. To secure said indemnification and to satisfy
its compensation hereunder, the Escrow Agent is hereby given a first lien
upon and the right to reimburse itself therefor out of, all of the rights,
titles, and interests of each of said parties in all money, property, and
instruments deposited hereunder, except for any money, property or
instruments that relate to money received that must be returned pursuant to
the provisions of the second to last sentence of SECTION 9.
[SIGNATURES ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement
as of the day and year first above written.
INLAND AMERICAN REAL ESTATE TRUST, INC.
By: ----------------------------------
Name: ----------------------------------
Its: ----------------------------------
INLAND SECURITIES CORPORATION
By: ----------------------------------
Name: ----------------------------------
Its: ----------------------------------
LASALLE BANK NATIONAL ASSOCIATION
By: ----------------------------------
Name: ----------------------------------
Its: ----------------------------------
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