Earn-out Agreement

Exhibit 10.190


EARN-OUT AGREEMENT


This EARN-OUT AGREEMENT ("Agreement") is made and entered into as of the 23rd day of June, 2004, by and among Hendon/Johns Creek Village, LLC, a Georgia limited liability company ("HJCV"), and J. Charles Johns Creek Village, LLC, a Georgia limited liability company ("JCJCV"), (each hereinafter referred to as a "Seller" and together the "Sellers"), and Inland Western Duluth John's Creek, a Delaware limited liability (hereinafter referred to as "Buyer") and Inland Western Retail Real Estate Trust, Inc., as guarantor ("Guarantor").


W I T N E S S E T H:


WHEREAS, pursuant to that certain Purchase Agreement dated as of the 13th day of April, 2004, as amended from time to time (collectively, the "Contract"), Buyer acquired at a closing (the "Initial Closing") on and as of the date hereof (the "Closing Date") from Sellers all of the outstanding equity interests of Hendon/JDN John's Creek Village, LLC, a Georgia limited liability company ("JDN"), the owner of certain real property known as John's Creek Village shopping center located in Duluth, Georgia (the "Property"); and


WHEREAS, the Property is less than one hundred percent (100%) occupied on the Closing Date; and


WHEREAS, pursuant to the Contract, if the Property is less than one hundred percent (100%) occupied on the Closing Date, in addition to the Initial Closing there shall be possible subsequent earn-out closing(s) to occur upon completion of the construction and leasing of vacant tenant space at the Property; and


WHEREAS, Buyer will withhold from the portion of the purchase price payable to Sellers at the Initial Closing an aggregate of Seven Hundred Fifty Two Thousand Two Hundred Fifty Dollars ($752,250) as an allowance for tenant improvements and leasing commissions applicable to such vacant space (the "TI/LC Deposit"), which will be disbursed to the Sellers at such earn-out closing(s) in accordance with the terms of this Agreement.


NOW, THEREFORE, for and in consideration of the premises hereto, the covenants and agreements hereinafter made, and for Ten Dollars ($10.00) in hand, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


1. EARN-OUT


A. Approximately 50,150 square feet of tenant space at the Property has not been fully constructed and/or leased as of the Closing Date (the "Vacant Space"). Buyer hereby hires Sellers to serve as Buyer's exclusive listing agent for all of the Vacant Space during the term of this Agreement. Sellers shall be responsible for negotiating the terms of the lease agreements and related matters and shall bear expenses incurred in connection therewith.


B. Buyer shall make earn-out payments to Sellers at one or more closings ("Earn-out Closings") upon each tenant's Acceptance of its applicable portion of the Vacant Space. "Acceptance" shall mean that such tenant has executed a lease agreement, accepted and taken possession of its premises, opened for business and commenced full rental payments, including CAM, taxes and insurance on a pro rata basis and delivered a certificate of occupancy and tenant estoppel to Buyer. It shall be Sellers' responsibility and sole cost and expense for leasing out and paying all costs related to placing the tenants into their leaseable space. Once leased and Accepted as provided above, the premises occupied by a tenant shall be referred to hereunder as "Accepted Vacant Space." The amount of the earn-out payment to be paid to Sellers at each Earn-out Closing (the "Earn-out Amount") for the applicable Accepted Vacant Space shall be calculated according to the Earn-out Formula attached hereto as EXHIBIT A. Each Earn-out Closing shall occur upon at least ten (10) business days' prior written notice ("Notice") by Sellers to Buyer that one or more of the previously unleased spaces has been leased on terms substantially in accordance with EXHIBIT B hereto. The aggregate of all Earn-out Amounts payable hereunder is referred to as the "Aggregate Earn-out Amount," an estimate of which is set forth on EXHIBIT C hereto. Buyer shall have no obligation to pay any Earn-out Amount or consummate any Earn-out Closing with respect to any Notice sent after the date that is eighteen (18) months from the date hereof (the "Termination Date").


C. The parties acknowledge and agree that the Aggregate Earn-out Amount and other data set forth on EXHIBIT C hereto are based on estimates of the parties made at the Closing Date and the actual Aggregate Earn-out Amount payable to Sellers may be greater or less than such estimate, depending on actual rent and lease obligations of the tenants.


2. TI/LC DEPOSIT. The TI/LC Deposit is applicable to the Vacant Space on the basis of the sum of Three Dollars ($3.00) for leasing/brokerage commissions ("LC"), plus Twelve Dollars ($12.00) for tenant improvement allowances ("TI"), multiplied by the aggregate number of square feet in the Vacant Space (approximately 50,150 square feet). At each Earn-out Closing that occurs in accordance with Section 1 above, that portion of the TI/LC


Deposit attributable to the applicable portion of the Vacant Space shall be paid to Sellers. To the extent that any funds remain in the TI/LC Deposit (and are not subject to an outstanding Notice) on the Termination Date, such funds shall be released to Buyer. To the extent that any funds remain in the TI/LC Deposit on the date that Earn-out Closings have occurred with respect to 100% of the Vacant Space, such funds shall be released to Sellers.


3. NOTICES. 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: Inland Western Retail Real Estate Trust, Inc.
2901 Butterfield Road
Oak Brook, Illinois 60523
Attn: Joseph Cosenza


with a copy to: Charles J. Benvenuto, Esq.
2901 Butterfield Road
3rd Floor
Oak Brook, Ilinois 60523


If to Sellers: Hendon/Johns Creek Village, LLC
J. Charles Johns Creek Village, LLC
c/o Hendon Properties, Inc.
Two Live Oak Center
3445 Peachtree Road, NE, Suite 175
Atlanta, GA ...