UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K


X

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007

 

or

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM     TO     


COMMISSION FILE NUMBER: 000-51199

Inland Western Retail Real Estate Trust, Inc.

 (Exact name of registrant as specified in its charter)


Maryland

42-1579325

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

2901 Butterfield Road, Oak Brook, Illinois  60523

 (Address of principal executive offices) (Zip Code)

630-218-8000

 (Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

Name of each exchange on which registered:

None

None


Securities registered pursuant to Section 12(g) of the Act:

Title of class:

Common stock, $.001 par value per share


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes   o      No  X

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15 (d) of the Act.

Yes   o      No  X

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for at least the past 90 days.

Yes X   No   o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  [ X ]


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company  See definitions of “accelerated filer” and “a smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o           Accelerated filer   o           Non-accelerated filer X   (Do not check if a smaller reporting company)  

Smaller reporting company   o


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o  No  X


The aggregate market value of the registrant's common stock held by non-affiliates of the registrant as of June 30, 2007 (the last business day of the registrant's most recently completed second fiscal quarter) was $4,491,016,099, assuming a market value of $10.00 per share.


As of March 27, 2008, there were 483,710,075 shares of common stock outstanding.


Documents Incorporated by Reference:  Portions of the Registrant’s proxy statement for its annual shareholders meeting to be held in 2008 are incorporated by reference in Part III, Items 10, 11, 12, 13 and 14.









INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.

TABLE OF CONTENTS


PART I

Page


Item 1.

Business

1

Item 1A.

Risk Factors

5

Item 1B.

Unresolved Staff Comments

13

Item 2.

Properties

13

Item 3.

Legal Proceedings

15

Item 4.

Submission of Matters to a Vote of Security Holders

16


PART II


Item 5.

Market for Registrant's Common Equity, Related Stockholder Matters

  and Issuer Purchases of Equity Securities

17

Item 6.

Selected Financial Data

19

Item 7.

Management's Discussion and Analysis of Financial Condition

  and Results of Operations

21

Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

46

Item 8.

Consolidated Financial Statements and Supplementary Data

48

Item 9.

Changes in and Disagreements with Accountants on Accounting

  and Financial Disclosure

114

Item 9A.

Controls and Procedures

114

Item 9B.

Other Information

114


PART III


Item 10.

Directors, Executive Officers and Corporate Governance

115

Item 11.

Executive Compensation

115

Item 12.

Security Ownership of Certain Beneficial Owners and Management

  and Related Stockholder Matters

115

Item 13.

Certain Relationships and Related Transactions, and Director Independence

115

Item 14.

Principal Accounting Fees and Services

115


PART IV


Item 15.

Exhibits and Financial Statement Schedules

115

SIGNATURES

121



i




PART I


Item 1.  Business


General

Inland Western Retail Real Estate Trust, Inc. is a self-managed real estate investment trust (REIT) that acquires, manages and develops a diversified portfolio of real estate, primarily multi-tenant shopping centers.  As of December 31, 2007, our portfolio of operating properties consisted of 290 properties wholly-owned by us (the wholly-owned properties), and 12 properties of which we own between 5% and 95% (the consolidated joint venture properties). We have also invested in nine development joint venture projects, six of which we consolidate.

The properties in our portfolio are located in 38 states.  At December 31, 2007, the portfolio (excluding the development joint venture properties) consisted of 180 multi-tenant shopping centers and 122 free-standing single-user properties of which 103 are net lease properties.  A net lease property is one which is leased to a tenant who is responsible for the base rent and all costs and expenses associated with their occupancy including property taxes, insurance and repairs and maintenance.  The portfolio contained an aggregate of approximately 44.8 million square feet of gross leasable area, or GLA, of which approximately 97% of the GLA was leased at December 31, 2007.  Our anchor tenants include nationally and regionally recognized grocers, discount retailers, financial companies, and other tenants who provide basic household goods and services.  Of our total annualized portfolio rental revenue as of December 31, 2007, approximately 66% was generated by anchor or credit tenants.  The term "credit tenant" is subjective and we apply the term to tenants who we believe have a substantial net worth.

All amounts in this Form 10-K are stated in thousands with the exception of per share amounts, per square foot amounts, number of properties, number of states, number of leases and number of employees.

On November 15, 2007, pursuant to an agreement and plan of merger, approved by our shareholders on November 13, 2007, we acquired, through a series of mergers, four entities affiliated with our former sponsor, Inland Real Estate Investment Corporation, which entities provided business management/advisory and property management services to us.  Shareholders of the acquired companies received an aggregate of 37,500 shares of our common stock, valued under the merger agreement at $10.00 per share.

Based upon discussions between us and our Independent Registered Public Accounting Firm relating to a recent change in interpretation of relevant accounting literature and the resulting change to historical accounting practice for internalization transactions, the merger transaction has been accounted for as a consummation of a business combination.  As a result, the purchase price in excess of the fair value of the assets and liabilities of the acquired companies was allocated to goodwill pursuant to EITF Issue no. 04-1, Accounting for Preexisting Relationships between Parties to a Business Combination and SFAS No. 141, Business Combinations .  Previously, we had anticipated that substantially all of the merger consideration would be treated as an expense in connection with the termination of our property management and advisory agreements upon consummation of the merger.

According to EITF Issue No. 04-1, the settlement of an executory contract in a business combination as a result of a preexisting relationship should be measured at the lesser of (a) the amount by which the contract is favorable or unfavorable from the perspective of the acquirer when compared to pricing for current market transactions for the same or similar items or (b) any stated settlement provisions in the contract available to the counterparty to which the contract is unfavorable.  We have determined that our agreements with our former business manager/advisor and property managers resulted in no allocation of the purchase price to contract termination costs.  The assets and liabilities of the acquired companies were recorded at their estimated fair value at the date of the transaction.  The purchase price in excess of the fair value of the assets and liabilities of the acquired companies was allocated to goodwill.



1




In determining the purchase price, an independent third party rendered an opinion on the $10.00 per share value of the shares, as well as the aggregate purchase price of $375,000.  Additional costs totaling $4,019 were incurred as part of the merger transaction consisting of financial and legal advisory services and accounting and proxy related costs.  As part of the merger, the value assigned to these tangible and intangible assets was determined by an independent third party engaged to provide such information.  The following table summarizes the estimated fair values of the allocation of the purchase price:

Shares of common stock issued (37,500 shares at $10.00 per share)

$

375,000 

Tangible assets acquired

 

(482)

Intangible assets

 

(621)

Additional merger costs and fees incurred

 

4,019 

 

 

 

Goodwill

$

377,916 

 

 

 

Business and Operating Strategies

Our goal is to maximize the possible return to stockholders through the acquisition, development, redevelopment, creation of strategic joint ventures and management of related properties consisting of lifestyle, power, neighborhood and community multi-tenant shopping centers and single-user net lease properties.  We seek to provide an attractive return to our stockholders by taking advantage of our strong presence in many markets. We are able to accommodate the growth needs of tenants who are interested in working with one landlord in multiple locations. Because of our focused acquisition strategy, we possess large amounts of retail space in certain markets, thus allowing us to lease and re-lease space at favorable rental rates. Working with our property management companies, we focus on the needs and problems facing our tenants, so we can provide solutions whenever possible. Because of our size, we enjoy the benefits of purchasing goods and services in large quantities, thus creating cost savings and improving efficiency. The result of these activities, we believe, will lead to profitability and growth as we go forward.

Prior to 2007, acquisitions had been a key contributor to our growth. In 2004 through 2006, for example, acquisitions totaled over $7,498,000. In 2007, however, our acquisition and financing strategies were complemented by proactive asset management, and development and redevelopment strategies.

Asset Management Strategies

Because we own over 44.8 million square feet of GLA, asset management of our properties is a key element of our operating strategy.  Our asset management philosophy includes working closely with our property managers to achieve the following goals:

·

Employ experienced, well-trained property managers, leasing agents and collection personnel;

·

Actively manage costs and minimize operating expenses by centralizing management, leasing, marketing, financing, accounting, renovation and data processing activities;

·

Improve rental income and cash flow by aggressively marketing rentable space;

·

Emphasize regular maintenance and periodic renovation to meet the needs of tenants and to maximize long-term returns;

·

Maintain a diversified tenant base at our retail centers, consisting primarily of retail tenants providing basic consumer goods and services; and

·

Identify properties that will benefit from asset enhancement including renovation and development of land that we own.

Institutional and Development Joint Ventures

During 2007 we began our two-pronged joint venture strategy – institutional and development.  Our initial institutional joint venture was consummated in April 2007 by the creation of a new entity with equity contributions made by our joint venture partner and a combination of assets and equity contributions by us.  Our joint venture partner is a large state



2




pension fund, advised by Morgan Stanley Real Estate Advisors.  We initially contributed approximately $336,000 of assets to the joint venture with the intention of contributing an additional $164,000 in assets, followed by an additional $500,000 of new assets to be acquired.  We earn fees for asset management, property management, leasing, acquisitions and dispositions.

Also during 2007, we launched our development joint venture program which involves partnering with regional developers.  We believe that a national platform of retail development requires the strength and expertise in strategic local markets.  Currently we have nine developments totaling $104,900 of equity contributed by us, all anticipated to earn a preferred return of not less than 10%.  Total costs of these developments are expected to be $474,646.  Furthering our strategy for development joint ventures, we signed an agreement with a regional developer in the Las Vegas area whereby we will commit, at our discretion, up to $112,500 in equity on to be named developments.  We seek to maintain a right of first offer with respect to completed developments, but we will seek to get the best execution if that involves a sale of the developed property at which time we will share in the proceeds of sale.

Acquisition Strategies

Management continues to focus on acquiring properties that meet our investment objectives.  We intend to continue to acquire a diversified (by geographical location and type and size of shopping centers) portfolio of real estate primarily improved for use as retail establishments.  The retail centers we have and expect to continue to acquire are located throughout the United States.

During the acquisition process, to ascertain the value of an investment property, we take into consideration many factors which require difficult, subjective, or complex judgments to be made.  These judgments require us to make assumptions when valuing each investment property.  Such assumptions include projecting vacancy rates, rental rates, property operating expenses, capital expenditures, and debt financing rates, among other assumptions.  The capitalization rate is also a significant driving factor in determining the property valuation which requires judgment of factors such as market knowledge, historical experience, length of leases, tenant financial strength, economy, demographics, environment, property location, visibility, age, and physical condition, and investor return requirements, among others.  Furthermore, at the acquisition date, we require that every property acquired is supported by an independent appraisal.  All of these factors are taken as a whole in determining the valuation.

Key elements of our acquisition strategy include:

·

Selectively acquiring diversified and well-located properties of the type described above;

·

Acquiring properties, in most cases, on an all-cash basis to provide us with a competitive advantage over potential purchasers who must secure financing simultaneously. We generally obtain mortgage financing concurrently or subsequent to the purchase.  We may, however, acquire properties subject to existing indebtedness if we believe this is in our best interest; and

·

Diversifying geographically by acquiring properties located primarily in major consolidated metropolitan statistical areas, in order to minimize the potential adverse impact of economic downturns in certain markets.

Financing Strategies

Generally, we have and expect to continue to acquire properties free and clear of permanent mortgage indebtedness by paying the entire purchase price of each property in cash. However, if it is determined to be in our best interest, we will, in some instances, incur indebtedness to acquire properties. With respect to properties purchased on an all-cash basis, financing is generally placed on a property after it closes and the proceeds from such financing have enabled us to purchase or develop additional properties.  Overall our borrowings have been approximately 50% to 60% of the cost of each property.  Our articles of incorporation provide that the aggregate amount of borrowing, in relation to our net assets, shall not, in the absence of a satisfactory showing that a higher level of borrowing is appropriate, exceed 300% of net assets.   We employ financing strategies to take advantage of trends we anticipate with regard to interest rates. One such strategy is if we believe interest rates will decline over a period of time, we may use variable rate financing with the option to fix the rate at a later date.  In other instances we may elect not to place individual permanent debt on each acquisition.  Such decisions are made on an individual basis and are influenced by the availability of cash on hand and our evaluation of the future trend of interest rates.



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Tax Status

We elected to be taxed as a real estate investment trust, or REIT, under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, or the Code, beginning with our taxable year ending December 31, 2003, and believe we have qualified as a REIT since such election.  Provided that we qualify for taxation as a REIT, we generally will not be subject to federal income tax on REIT taxable income that is distributed to stockholders.   If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax (including any applicable alternative minimum tax) on our taxable income at regular corporate tax rates.  Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income, property, or net worth and to federal income and excise taxes on our undistributed income.  We have one wholly-owned subsidiary that has elected to be treated as a taxable REIT subsidiary, or TRS, for federal income tax purposes. A TRS is taxed on its net income at corporate tax rates. The income tax expense incurred as a result of the TRS does not have a material impact on our consolidated financial statements.  On November 15, 2007, we acquired four qualified REIT subsidiaries.  Their income will be consolidated with REIT income for federal and state income tax purposes.  

Competition

We continue to see intense competition for the types of properties in which we invest. In seeking new investment opportunities, we compete with other real estate investors, including pension funds, insurance companies, foreign investors, real estate partnerships, other REITs, private individuals and other domestic real estate companies, some of which have greater financial resources than we do.  With respect to properties presently owned or to be owned by us, we compete with other owners of like properties for tenants.  There can be no assurance that we will be able to successfully compete with such entities in development, acquisition, and leasing activities in the future.

Our business is inherently competitive. Property owners, including us, compete on the basis of location, visibility, quality and aesthetic value of construction, volume of traffic, strength and name recognition of tenants and other factors.  These factors combine to determine the level of occupancy and rental rates that we are able to achieve at our properties.  Further, our tenants compete with other forms of retailing, including e-commerce, catalog companies and direct consumer sales.  We may, at times, compete with newer properties or those in more desirable locations.  To remain competitive, we evaluate all of the factors affecting our centers and try to position them accordingly.  For example, we may decide to focus on renting space to specific retailers who will complement our existing tenants and increase traffic.    We believe the principal factors that retailers consider in making their leasing decision include:

·

Consumer demographics

·

Quality, design and location of properties

·

Total number and geographic distribution of properties

·

Diversity of retailers and anchor tenants at shopping center locations

·

Management and operational expertise

·

Rental rates

Based on these criteria, we believe that the size and scope of our property portfolio, as well as the overall quality and attractiveness of our individual properties, enable us to compete effectively for retail tenants in our local markets. Because our revenue potential is linked to the success of our retailers, we indirectly share exposure to the same competitive factors that our retail tenants experience in their respective markets when trying to attract individual shoppers. These dynamics include general competition from other regional shopping centers, including outlet malls and other discount shopping centers, as well as competition with discount shopping clubs, catalog companies, Internet sales and telemarketing.

Environmental Matters

We believe that our portfolio of investment properties complies in all material respects with all federal, state and local environmental laws, ordinances and regulations regarding hazardous or toxic substances.  All of our investment properties have been subjected to Phase I or similar environmental audits at the time they were acquired.  These audits, performed by independent consultants, generally involve a review of records and visual inspection of the property.  These audits do not



4




include soil sampling or ground water analysis.  These audits have not revealed, nor are we aware of, any environmental liability that we believe will have a material adverse effect on our operations.  These audits may not, however, reveal all potential environmental liabilities.  Further, the environmental condition of our investment properties may be adversely affected by our tenants, by conditions of nearby properties or by unrelated third parties.

Employees

As of December 31, 2007, we had 239 employees.  

Certifications

We have filed with the Securities and Exchange Commission (SEC) the chief executive officer, chief operating officer/chief financial officer and chief accounting officer certifications required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, which are attached as Exhibits 31.1, 31.2 and 31.3 to this Annual Report on Form 10-K.

Access to Company Information

We electronically file our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports with the SEC.  The public may read and copy any of the reports that are filed with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549.  The public may obtain information on the operation of the Public Reference Room by calling the SEC at (800)-SEC-0330.  The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically.

We make available, free of charge, through our website and by responding to requests addressed to our investor relations group, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports.  These reports are available as soon as reasonably practical after such material is electronically filed or furnished to the SEC. Our website address is www.inland-western.com .  The information contained on our website, or other websites linked to our website, is not part of this document.

Stockholders wishing to communicate directly with the Board of Directors or any committee can do so by writing to the attention of the Board of Directors or committee in care of Inland Western Retail Real Estate Trust, Inc. at 2901 Butterfield Road, Oak Brook, IL 60523.

Item 1A. Risk Factors

In evaluating our company, careful consideration should be given to the following risk factors, in addition to the other information included in this annual report.  Each of these risk factors could adversely affect our business operating results and/or financial condition, as well as adversely affect the value of an investment in our common stock.  In addition to the following disclosures, please refer to the other information contained in this report including the consolidated financial statements and the related notes.

General Investment Risks

Our common stock is not currently listed on an exchange and cannot be readily sold.  There is currently no public trading market for our shares of common stock and we cannot assure investors that one will develop.  We may never list the shares for trading on a national stock exchange.  The absence of an active public market for our shares could impair an investor’s ability to sell our stock or obtain an active trading market valuation of the value of their interest in the Company.

Increases in market interest rates may hurt the value of our common stock.   We believe that investors consider the distribution rate on REIT stocks, expressed as a percentage of the price of stocks, relative to the market interest rates as an important factor in deciding whether to buy or sell the stocks.  If market interest rates go up, prospective purchasers of REIT stocks may expect a higher distribution rate.  Higher interest rates would not, however, result in more funds being



5




available for us to distribute and, in fact, would likely increase our borrowing costs and might decrease our funds available for distribution.  Thus, higher market interest rates could cause the price of our common stock to decline.

Our share repurchase program is limited to 5% of the weighted average number of shares of our stock outstanding during the prior calendar year and may be changed or terminated by us, thereby reducing the potential liquidity of a stockholders’ investment.   In accordance with our share repurchase program, a maximum of 5% of the weighted average number of shares of our stock outstanding during the prior calendar year may be repurchased by us.  This standard limits the number of shares we can purchase.  Our board of directors also has the ability to change or terminate, at any time, our share repurchase program.  If we terminate or modify our share repurchase program or if we do not have sufficient funds available to repurchase all shares that our stockholders request to repurchase, then our stockholders’ ability to liquidate their shares will be further diminished.

There are conflicts of interest between us and our affiliates.  Our operation and management, including our acquisition of properties, may be influenced or affected by conflicts of interest arising out of our relationship with our affiliates.  Those affiliates could take actions that are more favorable to other entities than to us.  The resolution of conflicts in favor of other entities could have a negative impact on our financial performance.

General Real Estate Risks


There are inherent risks with real estate investments.  All real property investments are subject to some degree of risk.  Equity real estate investments cannot be quickly converted to cash.  This limits our ability to promptly vary our portfolio in response to changing economic, financial and investment conditions.  Real property investments are also subject to adverse changes in general economic conditions or local conditions which reduce the demand for rental space.  Other factors also affect real estate values, including:

·

Possible federal, state or local regulations and controls affecting rents, prices of goods, fuel and energy consumption and prices, water and environmental restrictions;

·

Increasing labor and material costs; and

·

The attractiveness of the property to tenants in the neighborhood.

The yields available from equity investments in real estate depend in large part on the amount of rental income earned, as well as property operating expenses and other costs we incur.  If our properties do not generate revenues sufficient to meet operating expenses, we may have to borrow amounts to cover fixed costs, and our cash available for distributions may be adversely affected.

Adverse economic conditions could reduce our income and distributions to investors.  Our properties are primarily retail establishments.  The economic performance of our properties could be affected by changes in local economic conditions.  Our performance is therefore linked to economic conditions in areas where we have acquired or intend to acquire properties and in the market for retail space generally.  Adverse conditions include, but are not limited to:

·

The regional and local economy, which may be negatively impacted by plant closings, industry slowdowns, adverse weather conditions, natural disasters and other factors

·

Local real estate conditions, such as an oversupply of, or a reduction in demand for, retail space or retail goods, and the availability and creditworthiness of current and prospective tenants

·

Perceptions by retailers or shoppers of the safety, convenience and attractiveness of the retail property

·

The convenience and quality of competing retail properties and other retailing options such as the Internet

·

Changes in laws and regulations applicable to real property, including tax and zoning laws

·

Changes in interest rate levels and the availability and cost of financing

If we are unable to generate sufficient revenue from our retail properties, including those held by joint ventures, we will be unable to meet operating and other expenses, including debt service, lease payments, capital expenditures and tenant improvements, and to make distributions from our joint ventures and then, in turn, to our stockholders.



6




Therefore, to the extent that there are adverse economic conditions in an area and in the market for retail space generally that impact the market rents for retail space, such conditions could result in a reduction of our income and cash available for distributions and thus affect the amount of distributions we can make to our stockholders.

The value of our common stock may be negatively impacted.

·

If our tenants are unable to make rental payments, if their rental payments are reduced, or if they terminate a lease, our financial condition and ability to pay distributions will be adversely affected.  We are subject to the risk that tenants, as well as lease guarantors, if any, may be unable to make their lease payments or may decline to renew a lease upon its expiration.  A default by a tenant, the failure of a guarantor to fulfill its obligations or other premature termination of a lease, or a tenant's election not to renew a lease upon its expiration, could have an adverse effect on our financial condition and our ability to pay distributions.


·

Our financial condition and ability to make distributions may be adversely affected by the bankruptcy or insolvency, a downturn in the business, or a lease termination of a tenant that occupies a large area of the retail center (commonly referred to as an anchor tenant).  Any anchor tenant, a tenant that is an anchor tenant at more than one retail center, or a tenant of any of the single-user net lease properties may become insolvent, may suffer a downturn in business, or may decide not to renew its lease.  Any of these events would result in a reduction or cessation in rental payments to us and would adversely affect our financial condition.  A lease termination by an anchor tenant could result in lease terminations or reductions in rent by other tenants whose leases permit cancellation or rent reduction if an anchor tenant's lease is terminated.  In certain properties where there are large tenants, other tenants may require that if certain large tenants or "shadow" tenants discontinue operations, a right of termination or reduced rent may exist.  In such event, we may be unable to re-lease the vacated space.  Similarly, the leases of some anchor tenants may permit the anchor tenant to transfer its lease to another retailer.  The transfer to a new anchor tenant could cause customer traffic in the retail center to decrease and thereby reduce the income generated by that retail center.  A transfer of a lease to a new anchor tenant could also allow other tenants to make reduced rental payments or to terminate their leases at the retail center.  If we are unable to re-lease the vacated space to a new anchor tenant, we may incur additional expenses in order to re-model the space to be able to re-lease the space to more than one tenant.


·

If a tenant files for bankruptcy, we may be unable to collect balances due under relevant leases.  Any or all of the tenant’s, or a guarantor of a tenant's lease obligations could be subject to a bankruptcy proceeding pursuant to Title 11 or Title 7 of the bankruptcy laws of the United States.  Such a bankruptcy filing would bar all efforts by us to collect pre-bankruptcy debts from these entities or their properties, unless we receive an enabling order from the bankruptcy court.  Post-bankruptcy debts would be paid currently.  If a lease is assumed, all pre-bankruptcy balances owing under it must be paid in full.  If a lease is rejected by a tenant in bankruptcy, we would have a general unsecured claim for damages.  If a lease is rejected, it is unlikely we would receive any payments from the tenant because our claim is capped at the rent reserved under the lease, without acceleration, for the greater of one year or 15% of the remaining term of the lease, but not greater than three years, plus rent already due but unpaid.  This claim could be paid only in the event funds were available, and then only in the same percentage as that realized on other unsecured claims.  A tenant or lease guarantor bankruptcy could delay efforts to collect past due balances under the relevant leases, and could ultimately preclude full collection of these sums.  Such an event could cause a decrease or cessation of rental payments which would mean a reduction in our cash flow and the amount available for distributions to you.  In the event of a bankruptcy, we cannot assure stockholders that the tenant or its trustee will assume our lease.  If a given lease is not assumed, our cash flow and the amounts available for distributions to stockholders may be adversely affected.

Competition with third parties in acquiring properties will reduce our profitability and the return on an investment in our common stock.  We compete with many other entities engaged in real estate investment activities, many of which have greater resources than we do.  Larger REITs may enjoy significant competitive advantages that result from, among other things, a lower cost of capital and enhanced operating efficiencies.  In addition, the number of entities and the amount of funds competing for suitable investment properties may increase.  This will result in increased demand for these assets and therefore increased prices paid for them.  If we pay higher prices for properties, our profitability is reduced and investors will experience a lower return on their investment.



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It may be difficult to buy and sell real estate quickly, and transfer restrictions apply to some of our properties.   Equity real estate investments are relatively illiquid, and this characteristic tends to limit our ability to vary our portfolio promptly in response to changes in economic or other conditions. In addition, significant expenditures associated with each equity investment, such as mortgage payments, real estate taxes and maintenance costs, are generally not reduced when circumstances cause a reduction in income from the investment.  If income from a property declines while the related expenses do not decline, our income and cash available for distribution to our stockholders would be adversely affected.  A significant portion of our properties are mortgaged to secure payment of indebtedness, and if we were unable to meet our mortgage payments, we could lose money as a result of foreclosure on the properties by the various mortgagees. In addition, if it becomes necessary or desirable for us to dispose of one or more of the mortgaged properties, we might not be able to obtain a release of the lien on the mortgaged property without payment of the associated debt.  The foreclosure of a mortgage on a property or inability to sell a property could adversely affect the level of cash available for distribution to our stockholders.  In certain transactions, if persons selling properties to us wish to defer the payment of taxes on the sales proceeds, we are likely to pay them in units of limited partnership interest in the operating partnership. In transactions of this kind, we may also agree, subject to certain exceptions, not to sell the acquired properties for significant periods of time.

Our properties are subject to competition for tenants and customers .  We have and intend to continue to acquire properties located in developed areas.  Therefore, there are numerous other retail properties within the market area of each of our properties which compete with our properties and which compete with us for tenants.  The number of competitive properties could have a material effect on our ability to rent space at our properties and the amount of rents charged.  We could be adversely affected if additional competitive properties are built in locations competitive with our properties, causing increased competition for our customer traffic and creditworthy tenants.  This could result in decreased cash flow from tenants and may require us to make capital improvements to properties which we would not have otherwise made, thus affecting cash available for distributions, and the amount available for distributions to stockholders.

We may be required to expend funds to correct defects or to make improvements before a property can be sold.  We cannot assure our investors that we will have funds available to correct such defects or to make such improvements.

In acquiring a property, we may agree to restrictions that prohibit the sale of that property for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed or repaid on that property.  These provisions would restrict our ability to sell a property.

We depend on leasing space to tenants on economically favorable terms and collecting rent from these tenants, who may not be able to pay.   Our results of operations will depend on our ability to continue to lease space in our properties on economically favorable terms.  If the sales of stores operating in our centers decline sufficiently, tenants might be unable to pay their existing minimum rents or expense recovery changes, since these rents and charges would represent a higher percentage of their sales.  If our tenants’ sales decline, new tenants would be less likely to be willing to pay minimum rents as high as they would otherwise pay.  In addition, as substantially all of our income is derived from rentals of real property, our income and cash available for distribution to our stockholders would be adversely affected if a significant number of tenants were unable to meet their obligations to us.  During times of economic recession, these risks will increase.

Bankruptcy or store closures of tenants may decrease our revenues on available cash.   Our leases generally do not contain provisions designed to ensure the creditworthiness of the tenant, and a number of companies in the retail industry, including some of our tenants, have declared bankruptcy or voluntarily closed certain of their stores in recent years.  The bankruptcy or closure of a major tenant, particularly an Anchor tenant, may have a material adverse effect on the rental properties affected and the income produced by these properties and may make it substantially more difficult to lease the remainder of the affected rental properties.  As a result, the bankruptcy or closure of a major tenant and potential additional closures as a result of co-tenancy requirements could result in a lower level of revenues and cash available for distribution to our stockholders.

Inflation may adversely affect our financial condition and results of operations.   Should inflation increase in the future, we may experience any or all of the following:

·

Decreasing tenant sales as a result of decreased consumer spending which could result in lower overage rents;

·

Difficulty in replacing or renewing expiring leases with new leases at higher base and/or overage rents;



8




·

An inability to receive reimbursement from our tenants for their share of certain operating expenses, including common area maintenance, real estate taxes and insurance.

Inflation also poses a potential threat to us due to the probability of future increases in interest rates. Such increases would adversely impact us with higher interest rates on new debt.

The objectives of our partners in joint ventures may conflict with our objectives.  We have made and may continue to make investments in joint ventures or other partnership arrangements between us and our affiliates or with unaffiliated third parties.  Investments in joint ventures which own real properties may involve risks otherwise not present when we purchase real properties directly.  For example, our partners may file for bankruptcy protection, may have economic or business interests or goals which are inconsistent with our interests or goals, or may take actions contrary to our instructions, requests, policies or objectives.  Among other things, actions by partners might subject real properties owned by the joint venture to liabilities greater than those contemplated by the terms of the joint venture or other adverse consequences.

Real estate related taxes may increase and if these increases are not passed on to tenants, our net income will be reduced .  Some local real property tax assessors reassess our properties as a result of our acquisition of the property.  Generally, from time to time, our property taxes increase as property values or assessment rates change or for other reasons deemed relevant by the assessors.   An increase in the assessed valuation of a property for real estate tax purposes will result in an increase in the related real estate taxes on that property.  Although some tenant leases may permit us to pass through such tax increases to the tenants for payment, there is no assurance that renewal leases or future leases will be negotiated on the same basis.  Increases not passed through to the tenants will adversely affect our net income, cash available for distributions, and the amount of distributions to stockholders.

Construction and development activities expose us to risks such as cost overruns, carrying costs of projects under construction or development, availability and costs of materials and labor, weather conditions and government regulation.  In connection with construction and development activities, we have employees and our development joint venture partners who perform oversight and review functions.  These functions include selecting sites, reviewing construction and tenant improvement design proposals, negotiating and contracting for feasibility studies, supervising compliance with local, state or federal laws and regulations, negotiating contracts, oversight of construction, accounting and obtaining financing.  We retain independent general contractors to perform the actual physical construction work on tenant improvements or the installation of heating, ventilation and air conditioning systems.  These activities expose us to risks and potential cost recognition inherent in construction and development, including zoning, occupancy, governmental regulations, cost overruns, abandonment, carrying costs of projects under construction or development, availability and costs of materials and labor, inability to obtain financing or re-financings and adverse weather conditions.

Development joint venture projects may expose us to greater risks than those associated with the acquisition of operating properties.  We have entered and plan to continue to enter into development joint venture arrangements with unaffiliated developers for the construction of shopping centers.  Development joint ventures include risks which are different and, in most cases, greater than the risks associated with our acquisition of fully developed and operating properties.  These development risks are in addition to general market risks and may include a completion of construction and principal guaranty from us to the construction lender and customary construction risks for circumstances beyond our reasonable control including, but not limited to, zoning risks and additional entitlement risks from the jurisdiction where the properties are located, leasing risks and construction delays.

Bankruptcy of our developers could impose delays and costs on us with respect to the development retail properties.   The bankruptcy of one of the developers in any of our development joint ventures could materially and adversely affect the relevant property or properties.  If the relevant joint venture through which we have invested in a property has incurred recourse obligations, the discharge in bankruptcy of the developer may require us to honor a completion guarantee and therefore might result in our ultimate liability for a greater portion of those obligations than we would otherwise bear.

If we suffer losses that are not covered by insurance or that are in excess of insurance coverage, we could lose invested capital and anticipated profits.  Each tenant is responsible for insuring its goods and premises and, in some circumstances, may be required to reimburse us for a share of the cost of acquiring comprehensive insurance for the property, including casualty, liability, fire and extended coverage customarily obtained for similar properties in amounts which we determine are sufficient to cover reasonably foreseeable losses.  Tenants on a net lease typically are required to



9




pay all insurance costs associated with their space.  Material losses may occur in excess of insurance proceeds with respect to any property and we may not have sufficient resources to fund any loss in excess of any insurance proceeds.  However, there are types of losses, generally of a catastrophic nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution or environmental matters, which are either uninsurable or not economically insurable, or may be insured subject to limitations, such as large deductibles or co-payments.  Insurance risks associated with potential terrorism acts could sharply increase the premium we pay for coverage against property and casualty claims.  Additionally, mortgage lenders in some cases have begun to insist that specific coverage against terrorism be purchased by commercial property owners as a condition for providing mortgage loans.  It is uncertain whether such insurance policies will be available, or available at reasonable cost, which could inhibit our ability to finance or refinance our properties.  In such instances, we may be required to provide other financial support, either through financial assurances or self-insurance, to cover potential losses.  We cannot assure our stockholders that we will have adequate coverage for such losses.

Some of our properties are subject to potential natural or other disasters.   A number of our properties are located in areas which are subject to natural disasters.  In addition, many of our properties are located in costal regions, and would therefore be effected by any future increases in sea levels or in the frequency or severity of hurricanes and tropical storms, whether such increases are caused by global climate changes or other factors.

We may incur costs to comply with environmental laws.   Under various federal, state or local laws, ordinances and regulations, a current or previous owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances released at a property, and may be held liable to a governmental entity or to third parties for property damage or personal injuries and for investigation and clean-up costs incurred by the parties in connection with the contamination.  These laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of the hazardous or toxic substances.  The presence of contamination or the failure to remediate contamination may adversely affect the owner’s ability to sell or lease real estate or to borrow using the real estate as collateral.  Other federal, state and local laws, ordinances and regulations require abatement or removal of asbestos-containing materials in the event of demolition or certain renovations or remodeling, the cost of which may be substantial for some of our redevelopments and also govern emissions of and exposure to asbestos fibers in the air.  Federal and state laws also regulate the operation and removal of underground storage tanks.  In connection with the ownership, operation and management of our properties, we could be held liable for the costs of remedial action with respect to these regulated substances or tanks or related claims.

Our properties have been subjected to varying degrees of environmental assessment at various times.  However, the identification of new areas of contamination, a change in the extent or known scope of contamination or changes in cleanup requirements could result in significant costs to us.

Financing Risks

We incur mortgage indebtedness and other borrowings, which reduce the funds available for distribution and increase the risk of loss since defaults may result in foreclosure.  In addition, mortgages sometimes include cross-collateralization or cross-default provisions that increase the risk that more than one property may be affected by a default .  We incur or increase our mortgage debt by obtaining loans secured by our real properties to obtain funds to acquire additional real properties.  We may also borrow funds if necessary to satisfy the requirement that we distribute to stockholders as dividends at least 90% of our annual REIT taxable income, or otherwise as is necessary or advisable to assure that we maintain our qualification as a REIT for federal income tax purposes.  Currently, our aggregate borrowings secured by our properties are approximately 55% of the properties’ aggregate purchase prices.

We incur mortgage debt on a particular real property if we believe the property's projected cash flow is sufficient to service the mortgage debt.  However, if there is a shortfall in cash flow, then the amount available for distributions to stockholders may be affected.  In addition, incurring mortgage debt increases the risk of loss since defaults on indebtedness secured by properties may result in foreclosure actions initiated by lenders and our loss of the property securing the loan which is in default.  For tax purposes, a foreclosure of any of our properties would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage.  If the outstanding balance of the debt secured by the mortgage exceeds our basis in the property, we would recognize taxable income on foreclosure, but would not receive any cash proceeds.  We may give full or partial guarantees to lenders who lend to the



10




entities that own our properties.  In such cases, we will be responsible to the lender for satisfaction of the debt if it is not paid by such entity.  For any mortgages containing cross-collateralization or cross-default provisions, there is a risk that more than one real property may be affected by a default.

We may not be able to obtain capital to make investments.   We depend primarily on external financing to fund the growth of our business. This is because one of the requirements of the Internal Revenue Code of 1986, as amended, which we refer to as the “Code,” for a REIT generally is that it distribute or pay tax on 100% of its capital gains and distribute at least 90% of its ordinary taxable income to its stockholders.  Our access to debt or equity financing depends on banks’ willingness to lend to us and on conditions in the capital markets in general.  We and other companies in the real estate industry have experienced less favorable terms for bank loans and capital markets financing from time to time.  Although we believe, based on current market conditions, that we will be able to finance investments we wish to make in the foreseeable future, financing might not be available on acceptable terms.

If mortgage debt is unavailable at reasonable rates, we will not be able to place financing on the properties, which could reduce distributions per share.  If we place mortgage debt on the properties, we run the risk of being unable to refinance the properties when the loans come due, or of being unable to refinance on favorable terms.  If interest rates are higher when the properties are refinanced, our net income could be reduced, which would reduce cash available for distribution to stockholders and may prevent us from borrowing more money.

Beginning in the third quarter of 2007, a significant market deterioration which originated in the sub-prime residential mortgage market began extending to the broader real estate credit markets, which has resulted in a tightening of lender standards and terms and increased concerns of an overall market recession in 2008.  Given our substantial amount of indebtedness and the significant deterioration in the credit markets, there can be no assurance that we will be able to refinance existing debt or obtain additional financing on satisfactory terms.  In addition, our ability to refinance our debt on acceptable terms will likely be constrained further by any future increases in our aggregate amount of outstanding debt.  Moreover, if market conditions or other factors lead our lenders to perceive an increased relative risk of our defaulting on a particular loan or loans, such lenders may seek to hedge against such risk which could further decrease our ability to obtain certain types of financing.

Our substantial indebtedness could adversely affect our financial health and operating flexibility.   We have a substantial amount of indebtedness.  As of December 31, 2007, we had an aggregate consolidated indebtedness outstanding of $4,346,160.  Aggregate indebtedness included $125,000 of unsecured, recourse indebtedness to us and $475 unsecured, non-recourse indebtedness to us, while $4,220,685 was secured by our properties and marketable securities. A majority of the secured indebtedness was non-recourse to us.  As a result of this substantial indebtedness, we are required to use a material portion of our cash flow to service principal and interest on our debt, which will limit the cash flow available for other desirable business opportunities.

Our substantial indebtedness could have important consequences to us and the value of our common stock, including:

·

Limiting our ability to borrow additional amounts for working capital, capital expenditures, debt service requirements, execution of our growth strategy or other purposes;

·

Limiting our ability to use operating cash flow in other areas of our business because we must dedicate a substantial portion of these funds to service the debt;

·

Increasing our vulnerability to general adverse economic and industry conditions, including increases in interest rates, particularly given our substantial indebtedness which bears interest at variable rates;

·

Limiting our ability to capitalize on business opportunities, including the acquisition of additional properties, and to react to competitive pressures and adverse changes in government regulation;

·

Limiting our ability or increasing the costs to refinance indebtedness;

·

Limiting our ability to enter into marketing and hedging transactions by reducing the number of counterparties with whom we can enter into such transactions as well as the volume of those transactions.

The terms of our recourse line of credit facility obtained in 2007, and certain other debt, require us to satisfy certain customary affirmative and negative covenants and to meet financial ratios and tests including ratios and tests based on leverage, interest coverage and net worth.  The covenants under our debt affect, among other things, our ability to:



11




·

Incur indebtedness;

·

Create liens on assets;

·

Sell assets;

·

Make capital expenditures;

·

Engage in mergers and acquisitions.

Given the restrictions in our debt covenants on these and other activities, we may be restricted in our ability to pursue other acquisitions, may be significantly limited in our operating and financial flexibility and may be limited in our ability to respond to changes in our business or competitive activities.

A failure to comply with these covenants, including a failure to meet the financial tests or ratios, would likely result in an event of default under our debt and would allow the lenders to accelerate such debt under such facility.  If our debt is accelerated, our assets may not be sufficient to repay such debt in full.

We may have to reduce or eliminate our dividend.  In the event we are unable to refinance our debt on acceptable terms, we will be required to repay such debt or pay higher debt service costs in connection with less attractive financing terms.  In order to obtain the necessary cash for such payments, we may be compelled to take a number of actions, including the reduction of our dividend payments.

Federal Income Tax Risks

If we fail to qualify as a REIT in any taxable year, our operations and distributions to stockholders will be adversely affected.


We intend to operate so as to continue qualifying as a REIT under the Internal Revenue Code. A REIT generally is not taxed at the corporate level on income it currently distributes to its stockholders. Qualification as a REIT involves the application of highly technical and complex rules for which there are only limited judicial or administrative interpretations. The determination of various factual matters and circumstances is not entirely within our control and may affect our ability to qualify, or continue to qualify, as a REIT. In addition, new legislation, new regulations, administrative interpretations or court decisions could significantly change the tax laws with respect to qualifying as a REIT or the federal income tax consequences of qualification.


If we were to fail to qualify as a REIT in any taxable year:

·

we would not be allowed to deduct distributions paid to stockholders when computing our taxable income;

·

we would be subject to federal income tax (including any applicable alternative minimum tax) on our taxable income at regular corporate rates;

·

we would be disqualified from being taxed as a REIT for the four taxable years following the year during which we failed to qualify, unless entitled to relief under certain statutory provisions;

·

we would have less cash to pay distributions to stockholders; and

·

we may be required to borrow additional funds or sell some of our assets in order to pay corporate tax obligations we may incur as a result of being disqualified.

In certain circumstances, we may be subject to federal, state and local taxes.  Even if we qualify and maintain our status as a REIT, we may become subject to federal, state and local taxes as a REIT, which would reduce our cash available to pay distributions.  For example, if we have net income from a “prohibited transaction,” such income will be subject to a 100% tax.  For this purpose, a prohibited transaction is a disposition of property, other than property held by a taxable REIT subsidiary, held primarily for sale to customers in the ordinary course of business.  We may not be able to make sufficient distributions to avoid excise taxes applicable to REITs.  We may also decide to retain income we earn from the sale or other disposition of our property and pay income tax directly on such income.  In that event, our stockholders would be treated as if they earned that income and paid the tax on it directly.  However, stockholders that are tax-exempt, such as charities or qualified pension plans, would have to file tax returns to claim a refund of their deemed payment of



12




such tax liability.  In addition, we may also be subject to state and local taxes on our income, property or net worth, either directly or at the level of the operating partnership or at the level of the other companies through which we indirectly own our assets.  Any federal or state and local taxes paid by us will reduce our cash available for distributions.

An ownership limit and certain anti-takeover defenses and applicable law may hinder any attempt to acquire us .   Generally, for us to maintain our qualification as a REIT under the Code, not more than 50% in vote or value of the outstanding shares of our capital stock may be owned, directly or indirectly, by five or fewer individuals at any time during the last half of our taxable year.  The Code defines “individuals” for purposes of the requirement described in the preceding sentence to include some types of entities.  No person other than Mr. Daniel L. Goodwin and his family and controlled entities own greater than 5% of our outstanding stock.

The annual statement of value that we will be sending to stockholders subject to ERISA and to certain other plan stockholders is only an estimate and may not reflect the actual value of our shares.   The annual statement of estimated value is based on the estimated value of each share of common stock based as of the close of our fiscal year.  Management, in part, relied upon third party sources and advice in arriving at this estimated value.  No independent appraisals on the particular value of our shares was obtained and the value is based upon an estimated fair market value as of the close of our fiscal year.  Because this is only an estimate, we may subsequently revise any annual valuation that is provided.  We cannot assure that:

·

this estimate of value could actually be realized by us or by our shareholders upon liquidation;

·

shareholders could realize this estimate of value if they were to attempt to sell their shares of common stock;

·

this estimate of value reflects the price or prices which our common stock would or could trade if it was listed on a national stock exchange or included for quotation on a national market system; or

·

the annual statement of value complies with any reporting and disclosure or annual valuation requirements under ERISA or other applicable law.

In order for qualified plans to properly report account values as required by ERISA, we provide an estimated share value on an annual basis.  As of December 31, 2007, the annual statement of estimated value for shareholders subject to ERISA for our shares was estimated to be $10.00 per share.

Item 1B.  Unresolved Staff Comments

Not applicable.

Item 2. Properties

As of December 31, 2007, we owned, or consolidated, through separate limited partnerships, limited liability companies, or joint venture agreements a portfolio of 302 operating properties containing an aggregate of approximately 44.8 million square feet of GLA located in 38 states.  As of December 31, 2007, 294 of the properties in our portfolio and the related tenant leases are pledged as collateral securing mortgage debt of $4,058,757.  As of December 31, 2007, approximately 97% of our GLA was physically and economically leased.  The weighted average GLA occupied was 97% at December 31, 2007 and 2006.  The following table provides a summary of the properties in our portfolio at December 31, 2007.  For further details, see “Real Estate and Accumulated Depreciation (Schedule III)” herein.

Geographic Area

 

Number of Properties

Gross Leasable Area
(Sq. Ft.)

Physical Occupancy % as of 12/31/07

Physical Occupancy % as of 12/31/06


West

 

 

 

 

 

 

Arizona, California, Colorado, Montana, Nevada, New Mexico, Utah, Washington

57

9,431

97%

97%

 

 

 

 

 

 

 

 

 

 

 

 

 

 



13






Southwest

 

 

 

 

 

 

Arkansas, Louisiana, Oklahoma, Texas

68

9,248

96%

97%

 

 

 

 

 

 

 

Midwest

 

 

 

 

 

 

Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Ohio, Wisconsin

41

9,468

97%

98%

 

 

 

 

 

 

 

Northeast

 

 

 

 

 

 

Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island, Vermont

71

8,468

95%

96%

 

 

 

 

 

 

 

Southeast

 

 

 

 

 

 

Alabama, Florida, Georgia, Kentucky, North Carolina, South Carolina, Tennessee, Virginia

65

8,230

97%

98%

 

 

 

 

 

 

 

Totals

 

 

302

44,845

97%

97%

 

 

 

 

 

 

 

The majority of the revenues from our properties consist of rents received under long-term operating leases.  Some leases provide for the payment of fixed base rent paid monthly in advance, and for the reimbursement by tenants to us for the tenant's pro rata share of certain operating expenses including real estate taxes, special assessments, insurance, utilities, common area maintenance, management fees, and certain building repairs paid by the landlord and recoverable under the terms of the lease.  Under these leases, the landlord pays all expenses and is reimbursed by the tenant for the tenant's pro rata share of recoverable expenses paid.  Certain other tenants are subject to net leases which provide that the tenant is responsible for fixed based rent as well as all costs and expenses associated with occupancy.  Under net leases where all expenses are paid directly by the tenant rather than the landlord, such expenses are not included in the consolidated statements of operations.  Under net leases where all expenses are paid by the landlord, subject to reimbursement by the tenant, the expenses are included within property operating expenses and reimbursements are included in “Tenant recovery income” on the consolidated statements of operations.

Revenue from our properties depends on the amount of the tenants' retail revenue, making us vulnerable to general economic downturns and other conditions affecting the retail industry.  Some of the leases provide for base rent plus contractual base rent increases.  A number of the leases also include a percentage rent clause for additional rent above the base amount based upon a specified percentage of the sales the tenant generates.  As of December 31, 2007, 115 tenants paid percentage rent.  Under those leases which contain percentage rent clauses, the revenue from tenants may increase as the sales of the tenant increases.

We continually monitor the sales trends and financial strength of all of our major tenants.  Our hope is that we will be able to reduce our exposure and increase our rental stream by taking certain troubled retailers’ spaces back and re-leasing at market rent.  We believe that select locations are currently leased at rents that are below market, and if we are able to take back any of these locations we could receive a termination fee and have a leasing opportunity.  We use this strategy to maximize the profitability and minimize any exposure that we have for store closings.  We do not expect store closings or bankruptcy reorganizations to have a material impact on our consolidated financial statements at this time.  The tenants with which we have concerns represent approximately 3% of our total portfolio annualized rental income as of December 31, 2007.

We believe our risk exposure to potential future downturns in the economy is mitigated because the tenants at our current and targeted properties, to a large extent, consist or will consist of:  retailers who serve primary non-discretionary



14




shopping needs, such as grocers and pharmacies; discount chains that can compete effectively during an economic downturn; and national tenants with strong credit ratings who can withstand a downturn.  We believe that the diversification of our current and targeted tenant base and our focus on creditworthy tenants further reduces our risk exposure.   Selecting properties with high quality tenants and mitigating risk through diversifying our tenant base is at the forefront of our acquisition strategy.  We believe our strategy of purchasing properties, primarily in the fastest growing areas of the country and focusing on acquisitions with tenants who provide basic goods and services will produce stable earnings and potential growth opportunities in future years.

The following table lists the top 10 tenants in our portfolio according to the amount of GLA that each occupied at December 31, 2007.

Tenant

Square Footage

% of Total Portfolio Square Footage

Annualized Rental
Income

% of Total Portfolio Annualized Income

Mervyn's

1,897  

4.2%

$    17,393

3.1%

PetSmart

1,688    

3.8

11,978

2.1

Cost Plus World Market

1,257    

2.8

5,897

1.1

Wal-Mart

1,254    

2.8

7,384

1.3

Hewitt Associates

1,162    

2.6

15,106

2.7

Home Depot

1,097    

2.4

8,699

1.6

Kohl's

1,050    

2.3

6,446

1.1

American Express

1,035    

2.3

8,829

1.6

Circuit City

929    

2.1

11,199

2.0

Best Buy

917    

2.0

13,015

2.3

 

 

 

 

 

The following table represents an analysis of lease expirations over the next 10 years based on the leases in place at December 31, 2007.

Lease Expiration Year

 

Number of Leases Expiring

 

GLA Under Expiring Leases
(Sq. Ft.)

 

% of Total Leased GLA

 

Total Annualized Base Rent

 

% of Total Annualized Base Rent

 

Annualized Base Rent ($/Sq. Ft.)

2008

 

325

 

896

 

2.00%

 

$  17,368

 

3.06%

 

$  19.38

2009

 

583

 

2,189

 

4.88

 

36,316

 

6.53

 

16.59

2010

 

463

 

1,751

 

3.91

 

31,466

 

6.00

 

17.97

2011

 

373

 

2,436

 

5.43

 

41,101

 

8.28

 

16.88

2012

 

426

 

2,095

 

4.67

 

37,886

 

8.27

 

18.09

2013

 

285

 

2,527

 

5.64

 

36,272

 

8.60

 

14.35

2014

 

280

 

4,803

 

10.71

 

69,685

 

17.97

 

14.51

2015

 

207

 

4,687

 

10.45

 

49,922

 

15.71

 

10.65

2016

 

136

 

3,562

 

7.94

 

40,144

 

14.93

 

11.27

2017

 

91

 

1,729

 

3.86

 

22,531

 

9.80

 

13.03

 

 

 

 

 

 


 

 

 

 

 

 

Item 3. Legal Proceedings

We are subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business.  While the resolution of these matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters, individually or in the aggregate, will not have a material adverse effect on our results of operations or financial condition.

On November 1, 2007, City of St. Clair Shores General Employees Retirement System filed a class action complaint in the United States District Court for the Northern District of Illinois alleging violations of the federal securities laws and common law causes of action in connection with our merger with our business manager/advisor and property managers as reflected in our Proxy Statement dated September 10, 2007 (the “Proxy Statement”).  The complaint alleges, among other things, (i) that the consideration paid as part of the merger was excessive; (ii) violations of Section 14(a), including Rule



15




14a-9 thereunder, and Section 20(a) of the Exchange Act, based upon allegations that the proxy statement contains false and misleading statements or omits to state material facts; (iii) that the business manager/advisor and property managers and certain directors and defendants breached their fiduciary duties to the class; and (iv) that the merger unjustly enriched the business manager/advisor and property managers.

The complaint seeks, among other things, (i) certification of the class action; (ii) a judgment declaring the proxy statement false and misleading; (iii) unspecified monetary damages; (iv) to nullify any stockholder approvals obtained during the proxy process; (v) nullification of the merger and the related merger agreements with the business manager/advisor and the property managers; and (viii) the payment of reasonable attorneys’ fees and experts’ fees.

We believe that the allegations in the complaint are without merit, and intend to vigorously defend the lawsuit.

Item 4. Submission of Matters to a Vote of Security Holders

Our annual meeting of stockholders was held on November 13, 2007 and holders of 256,965,935 shares were present in person or by proxy.  (Share amounts in this item are not stated in thousands.)

(1)

Stockholders voted to ratify entry into the merger agreement and in favor of the merger, pursuant to which we acquired our business manager/advisor and property managers.  The results of the vote are detailed in the following table:

Shares

For

Against

Abstain

245,640,736

4,661,354

6,663,845

 

 

 

(2)

Stockholders approved the following persons to be elected to our Board of Directors.  The results of the vote are detailed in the following table:

 

Shares

Nominee

For

Withheld

Frank A. Catalano, Jr.

250,435,093

6,530,840

Kenneth H. Beard

250,525,323

6,440,611

Paul R. Gauvreau

250,516,803

6,449,131

Gerald M. Gorski

250,479,656

6,486,278

Barbara A. Murphy

250,354,994

6,610,940

Robert D. Parks

250,506,437

6,459,497

Brenda G. Gujral

250,414,394

6,551,539

 

 

 

(3)

Stockholders ratified the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2007.  The results of the vote are detailed in the following table:

Shares

For

Against

Abstain

250,385,859

1,475,982

5,104,094

 

 

 




16




PART II


Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

There is no established public trading market for our shares of common stock.  In order for qualified plans to properly report account values as required by ERISA, we provide an estimated share value on an annual basis.  As of December 31, 2007, the annual statement of estimated value for shareholders subject to ERISA for our shares was estimated to be $10.00 per share.   The per share estimated value is deemed to be the offering price during the public offering periods of the shares, which was $10.00 per share.

We provide a share repurchase program, or SRP, to provide limited liquidity for stockholders.  In accordance with our SRP, a maximum of 5.0% of the weighted average number of shares of our common stock outstanding during the prior calendar year may be repurchased by us.  This standard limits the number of shares we can purchase.  Our board of directors also has the ability to change or terminate, at any time, our SRP.  Subject to these restrictions, the SRP currently enables stockholders that have beneficially owned the shares for at least one year to sell shares back to us at $10.00 per share.

The following table outlines the stock repurchases made during the quarter ended December 31, 2007:

 

Total Number of Shares

 

Average

Price Paid

Total Number of Shares Purchased as Part of Publicly Announced Plans

Maximum Number of Shares that May Yet Be Purchased under the Plans

Period

Purchased

 

per Share

or Programs

or Programs (1)

October 1, 2007 - October 31, 2007

4,084

 

$  10.00

4,084

12,495

November 1, 2007 - November 30, 2007

2,846

 

10.00

2,846

9,649

December 1, 2007 - December 31, 2007

2,062

 

10.00

2,062

7,587

 

 

 

 

 

 

Total

8,992

 

 

8,992

 

 

 

 

 

 

 

(1)

For 2007, our board of directors established the limitation on the number of shares that could be acquired by us through the SRP at five percent (5%) of the weighted average shares outstanding as of December 31, 2006.  The share repurchase limit for 2007 was 22,090.

Stockholders

As of March 27, 2008, we had 112,452 stockholders of record.

Distributions

We have been paying monthly distributions since October 2003. The table below depicts the distributions declared and their tax status for each year.

 

Distributions Declared per

Return

Ordinary

Year

Common Share

of Capital

Income

2007

$  0.64

$  0.33

$  0.31

2006

0.64

0.35

0.29

2005

0.64

0.29

0.35

2004

0.66

0.30

0.36

     2003 (1)

0.15

0.15

-

 

 

 

 



17







(1)

Period from March 5, 2003 (inception) through December 31, 2003.

Equity Compensation Plan Information

We have adopted an Independent Director Stock Option Plan, or the Plan which, subject to certain conditions, provides for the grant to each independent director of options to acquire shares following their becoming a director and for the grant of additional options to acquire shares on the date of each annual stockholders’ meeting.  Generally, these options are granted with an exercise price equal to the fair market value of the shares on the date granted and are subject to vesting.  Such options were granted, without registration under the Securities Act of 1933, or the Act, in reliance upon the exemption from registration in Section 4(2) of the Act, as transactions not involving any public offering.  None of such options have been exercised.  Therefore, no shares have been issued in connection with such options.

The following table sets forth the following information as of December 31, 2007: (i) the number of shares of our common stock to be issued upon the exercise of outstanding options, warrants and rights; (ii) the weighted-average exercise price of such options, warrants and rights; and (iii) the number of shares of our commons stock remaining available for future issuance under our equity compensation plans, other than the outstanding options, warrants and rights described above.

 

Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants

Weighted-Average Exercise Price of Outstanding Options, Warrants

Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (excluding securities reflected in

Plan Category

and Rights (a)

and Rights

Column (a))

 

 

 

 

Equity Compensation Plans Approved by Security Holders

-

-

-

 

 

 

 

Equity Compensation Plans Not Approved by Security   Holders

22

$  8.95

53



18




Item 6. Selected Financial Data


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.

For the years ended December 31, 2007, 2006, 2005 and 2004

and for the period from

March 5, 2003 (inception) through December 31, 2003
(Amounts in thousands, except per share amounts)


(not covered by Report of Independent Registered Public Accounting Firm)


[IWEST10K123107FINAL002.GIF]

The above selected financial data should be read in conjunction with the consolidated financial statements and related notes appearing elsewhere in this annual report.  Previously reported selected financial data reflects certain reclassifications to income from discontinued operations as a result of the sale of investment properties in 2007.

(a)

The net income (loss) and distributions per common share are based upon the weighted average number of common shares outstanding. The $0.64 per share distribution declared for the years ended December 31, 2007, 2006 and 2005, represented 102%, 99% and 97%, respectively, of our Funds from Operations (FFO) for those periods.  Our distribution of current and accumulated earnings and profits for federal income tax purposes are taxable to stockholders as ordinary income. Distributions in excess of these earnings and profits generally are treated as a non-taxable reduction of the stockholders’ basis in the shares to the extent thereof (a return of capital), and thereafter as taxable gain.  The distributions in excess of earnings and profits will have the effect of deferring taxation of the amount of the distributions until the sale of the stockholders’ shares.  For the year ended December 31, 2007, $148,990 (or approximately 47% of the $316,513 paid in 2007) represented a return of capital.  In order to maintain our qualification as a REIT, we must make annual distributions to stockholders of at least 90% of our REIT taxable income. REIT taxable income does not include dividends paid deduction and net capital gains.  Under certain circumstances, we may be required to make distributions in excess of cash available for distribution in order to meet the REIT distribution requirements.  Distributions are determined by our board of directors and are dependent on a number of factors, including the amount of funds available for distribution, our financial



19




condition, decisions by the board of directors to reinvest funds rather than to distribute the funds, our capital expenditures, the annual distribution required to maintain REIT status under the Code, and other factors the board of directors may deem relevant.

(b)

One of our objectives is to provide cash distributions to our stockholders from cash generated by our operations. Cash generated from operations is not equivalent to our net income from continuing operations as determined under generally accepted accounting principles in the United States of America, or GAAP. Due to certain unique operating characteristics of real estate companies, the National Association of Real Estate Investment Trusts, or NAREIT, an industry trade group, has promulgated a standard known as "Funds from Operations," or FFO, for short, which it believes more accurately reflects the operating performance of a REIT such as us. As defined by NAREIT, FFO means net income computed in accordance with GAAP, excluding gains (or losses) from sales of operating properties, plus depreciation on real property and amortization, and after adjustments for unconsolidated partnerships and joint ventures in which the REIT holds an interest.  We have adopted the NAREIT definition for computing FFO because management believes that, subject to the following limitations, FFO provides a basis for comparing our performance and operations to those of other REITs.  The calculation of FFO may vary from entity to entity since capitalization and expense policies tend to vary from entity to entity.  Items which are capitalized do not impact FFO, whereas items that are expensed reduce FFO.  Consequently, our presentation of FFO may not be comparable to other similarly titled measures presented by other REITs.  FFO is not intended to be an alternative to  "Net Income" as an indicator of our performance nor to  "Cash Flows from Operating Activities" as determined by GAAP as a measure of our capacity to pay distributions.  FFO is calculated as follows:

[IWEST10K123107FINAL004.GIF]

(c)

The following table compares cash flows provided by operations to distributions declared:

  [IWEST10K123107FINAL006.GIF]

In 2003 and 2004, the deficiencies were funded through advances from our sponsor.  In 2005, the deficiency was funded through payments received under master leases and cash provided from financing activities.  



20




Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations


Certain statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Annual Report on Form 10-K may constitute “forward-looking statements.”  Forward-looking statements are statements that are not historical, including statements regarding management’s intentions, beliefs, expectations, representations, plans or predictions of the future and are typically identified by such words as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may,” “will,” “should” and “could.”  We intend that such forward-looking statements be subject to the safe harbor provisions created by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Federal Private Securities Litigation Reform Act of 1995 and we include this statement for the purpose of complying with such safe harbor provisions.  Future events and actual results, performance, transactions or achievements, financial or otherwise, may differ materially from the results, performance, transactions or achievements expressed or implied by the forward-looking statements.  Risks, uncertainties and other factors that might cause such differences, some of which could be material, include, but are not limited to:

·

Financial stability of tenants, including the ability of tenants to pay rent, the decision of tenants to close stores and the effect of bankruptcy laws;

·

Risks of real estate development, including the failure of pending developments and redevelopments to be completed on time and within budget and the failure of newly acquired or developed properties to perform as expected;

·

Risks of joint venture activities, including development joint ventures;

·

The level and volatility of interest rates;

·

National or local economic, business, real estate and other market conditions, including the ability of the general economy to recover timely from economic downturns;

·

The effect of inflation and other factors on fixed rental rates, operating expenses and real estate taxes;

·

Risks of acquiring real estate, including continued competition for new properties and the downward trend on capitalization rates;

·

The competitive environment in which we operate and the supply of and demand for retail goods and services in our markets;

·

Financial risks, such as the inability to renew existing tenant leases or obtain debt or equity financing on favorable terms, if at all;

·

The increase in property and liability insurance costs and the ability to obtain appropriate insurance coverage;

·

The ability to maintain our status as a REIT for federal income tax purposes;

·

The effects of hurricanes and other natural disasters;

·

Environmental/safety requirements and costs; and

·

Other risks identified in this Annual Report on Form 10-K and, from time to time, in other reports we file with the Securities and Exchange Commission (SEC).

The following discussion and analysis compares the year ended December 31, 2007 to the years ended December 31, 2006 and 2005.  You should read the following discussion and analysis along with our consolidated financial statements and the related notes included elsewhere in this report.  All amounts are stated in thousands, except per share amounts, per square foot amounts and number of properties, states and leases.

Executive Summary

Inland Western Retail Real Estate Trust, Inc. is a self-managed real estate investment trust, or REIT, that acquires, manages and develops a diversified portfolio of real estate, primarily multi-tenant shopping centers.  As of December 31, 2007, our portfolio consisted of 290 operating properties wholly-owned by us, (the wholly-owned properties) and 12 operating properties in which we own between 5% and 95%, (the consolidated joint venture properties), for a total of 302



21




operating properties.  We have also invested in nine real estate development joint venture projects, six of which we consolidate.

Our goal is to maximize the possible return to our shareholders through the acquisition, development, redevelopment, creation of strategic joint ventures and management of the related properties consisting of neighborhood and community multi-tenant shopping centers and single-user net lease properties.  We actively manage our assets by leasing and releasing space at favorable rates, controlling costs, maintaining strong tenant relationships and creating additional value through redeveloping and repositioning our centers.  We distribute funds generated from operations to our shareholders and intend to continue distributions in order to maintain our REIT status.

The properties in our portfolio are located in 38 states.  As of December 31, 2007, our portfolio consisted of 180 multi-tenant shopping centers and 122 free-standing, single-user properties of which 103 are net lease properties. The portfolio contains an aggregate of approximately 44.8 million square feet of GLA, of which approximately 97% of the GLA was physically and economically leased.  The weighted average GLA occupied as of December 31, 2007 and December 31, 2006, was 97% as of both dates.  Our anchor tenants include nationally and regionally recognized grocers, discount retailers, financial companies and other tenants who provide basic household goods and services.  Of our total annualized revenue as of December 31, 2007, approximately 66% is generated by anchor or credit tenants, including Mervyn’s, PetSmart, Wal-Mart, Hewitt Associates, Home Depot, Kohl’s, American Express, Circuit City, Best Buy and several others.  The term “credit tenant” is subjective and we apply the term to tenants who we believe have a substantial net worth.

Of the 302 wholly-owned and consolidated joint venture operating properties as of December 31, 2007, 136 were located west of the Mississippi River.  These 136 properties equate to approximately 46% of our GLA and approximately 48% of our annualized base rental income as of December 31, 2007.  The remaining 166 of our properties are located east of the Mississippi River.

During the year ended December 31, 2007, we invested approximately $570,000 for the acquisition of seven multi-tenant shopping centers and funding of 45 earnouts on properties which we already own, containing a total GLA of approximately 2.6 million square feet.  We also invested approximately $96,000 in real estate development and other real estate joint ventures.  We received approximately $155,000 in investor proceeds through our DRP and obtained approximately $490,000 in mortgage and other financing proceeds.

For many retailers the 2007 holiday season turned out worse than expected as higher energy prices, falling home values and slowing job growth continued to weigh on consumer spending, the main engine for U.S. growth over the last two years.  According to the International Council of Shopping Centers, comparable chain store sales increased only 0.9% in December compared to 3.3% in December 2006.  Sectors performing poorly included department stores, apparel chains and furniture stores.  Conversely, wholesale and discount stores reported positive growth.

Many economists predict that the first half of 2008 will be difficult as high energy costs, deteriorating housing market and declining consumer confidence show no signs of abating.  Retailers turned in their worst monthly sales in nearly five years in January and the big retail chains are preparing for a prolonged slowdown in consumer spending by announcing plans to close stores, cut jobs and scale back expansion plans.  It is expected that retailers will close 25% more retail locations in 2008 when compared to 2007.

Selecting properties with high quality tenants and mitigating risk through diversifying our tenant base is at the forefront of our acquisition and leasing strategy.  We believe our strategy of purchasing properties, primarily in the fastest growing areas of the country, and focusing on acquisitions with tenants who provide basic goods and services will produce stable earnings and growth opportunities in future years.

We continually monitor the sales trends and financial strength of all of our major tenants.  We believe that we will be able to reduce our exposure to credit risk and increase our rental stream by accepting certain spaces related to troubled retailers back and releasing at market rent.  We believe that select locations with troubled tenants are currently leased at rents that are at or below market and if we are able to take back spaces currently leased to troubled tenants we could receive a termination fee and have a leasing opportunity.  We use this strategy to try to maximize our profitability and minimize any exposure that we have for store closings.  We do not expect store closings or bankruptcy reorganizations to have a



22




material impact on our consolidated financial statements.  The tenants with which we have concerns represent less than 3% of our current total portfolio annualized rental income.

Results of Operations

Comparison of the Year Ended December 31, 2007 to December 31, 2006 - Total Portfolio

The table below presents selected operating information for our total portfolio of operating properties (including 12 consolidated joint venture properties) for the years ended December 31, 2007 and 2006.

[IWEST10K123107FINAL008.GIF]

Rental income. Rental income consists of basic monthly rent and percentage rental income pursuant to tenant leases. The overall increase in rental income of $24,167 or 4.3% for the year ended December 31, 2007, as compared to the year ended December 31, 2006, is primarily a result of an increase in rental income of $27,676 due to the acquisition of seven additional properties subsequent to December 31, 2006.  This increase was partially offset by a decrease in rental income of $13,543 as a result of the contribution of seven properties to an unconsolidated joint venture in April 2007.  The increase in rental income is also attributable to the completion of earnouts, in which twelve months of income was recognized in 2007 as compared to a partial year in 2006 and the leasing of renewal or previously vacant space at rental rates in excess of the previous rental rates which accounts for $19,000 in base rent.



23




Tenant recovery income . Tenant recovery income represents reimbursements from tenants for common area expenses, property management fees, insurance and real estate taxes incurred by the property.  Tenant recovery income increased overall by $23,444 or 18.7% for the year ended December 31, 2007, as compared to the year ended December 31, 2006, due in part to an increase of $5,240 due to the seven properties acquired subsequent to December 31, 2006.  This increase is partially offset by a decrease of $4,474 as a result of the contribution of seven properties to an unconsolidated joint venture in April 2007.  The remaining increase in tenant recovery income of $22,678 is due to increases in property operating expenses and real estate taxes.

Other property income. The increase in other property income of $3,787 or 35.0% for the year ended December, 2007, as compared to the year ended December 31, 2006, is primarily the result of an increase in termination fee income and direct recovery income received from tenants, offset by a decrease in other miscellaneous property income.

Insurance captive income. In the fourth quarter of 2006, we entered into an agreement with an LLC formed as an insurance association captive, or the Captive.  The Captive is currently wholly-owned by us and two affiliated entities.  A non-affiliated entity withdrew as of September 30, 2007, pursuant to an agreement among the members.  The Captive was established to stabilize our insurance costs, manage our exposures and recoup expenses through its functions.  It was determined that, under FIN 46(R), the Captive is a variable interest entity and we are the primary beneficiary.  We reevaluated this conclusion and believe that no form of trigger event has occurred that would cause this conclusion to change.  Therefore, we have consolidated the Captive in our consolidated financial statements. Insurance captive income increased by $1,713 or 967.8% primarily due to twelve months income recognized in 2007 compared to three months in 2006.

Property operating expenses . Property operating expenses includes common area expenses, property management fees and insurance costs that are reimbursed by tenants according to the terms of their leases as described above as well as non-reimbursable operating expenses, including a provision for bad debt expense.  The overall increase of $20,490 or 17.3% was due to an increase in recoverable operating expenses for the year ended December 31, 2007, as compared to December 31, 2006, of $9,489 which includes an increase of $3,558 related to seven properties acquired since December 31, 2006.  This increase is partially offset by a decrease of $2,338 in recoverable expenses related to the contribution of seven properties to an unconsolidated joint venture in April 2007.  The remaining increase is the result of an overall inflationary increase to common area expenses.  Non-reimbursable property operating expenses increased $11,001 partially as a result of a net increase in the provision for bad debt expense of $6,212 as well as increases in non-recoverable utility costs and non-recoverable marketing and other promotional expenses intended to maintain historical occupancy levels and increase leasing activity at our properties.  In addition, an overall increase in security, cleaning and utility costs at our properties has contributed to an increase in recoverable expenses for the year ended December 31, 2007, as compared to December 31, 2006.  

Real estate taxes. Real estate taxes increased $8,012 or 10.0% for the year ended December 31, 2007, as compared to December 31, 2006, partially as a result of higher assessed valuations on properties acquired in 2006, 2005 and 2004. The increase also includes $3,153 related to seven properties acquired since December 31, 2006, partially offset by a decrease of $3,543 related to the contribution of seven properties to an unconsolidated joint venture in April 2007.  The majority of real estate taxes are reimbursed by tenants according to their lease terms and such recovery is included as a component of tenant recovery income.  

Depreciation and Amortization.   Depreciation and amortization increased $20,645 or 8.2% for the year ended December 31, 2007 as compared to the year ended December 31, 2006.  Depreciation expense includes depreciation on buildings and improvements.  Depreciation expense increased $13,720 or 7.0% primarily as a result of depreciation on seven properties acquired and earnouts completed since December 31, 2006.  The increase is also due to the write-off of tenant improvements attributable to tenants that vacated in 2007.  Amortization expense includes amortization on intangible assets and leasing commissions.  Total amortization expense increased $6,924 or 12.4%.  Amortization expense on intangible assets increased $6,431 or 11.6% due to amortization expense on intangible assets as a result of seven properties acquired and earnouts completed since December 31, 2006.  The increase was also due to the write-off of intangible assets attributable to tenants that vacated in 2007.  Amortization expense on leasing commissions increased $467 or 141.6% primarily due to amortization on an additional $3,051 in leasing commissions since December 31, 2006.



24




Insurance captive expenses. Insurance captive expenses increased by $1,254 or 364.5% primarily due to twelve months of expense recognized in 2007 as compared to three months in 2006.

General and administrative expenses  General and administrative expenses consist of salaries for maintaining our accounting and investor records, computerized information services costs, mortgage servicing fees and investment advisor fees paid to affiliates, professional fees for legal, audit and accounting services as well as director and officer insurance, stock administration, corporate tax expenses, and other office expenses.  General and administrative costs increased by $1,897 or 13.0% for the year ended December 31, 2007, as compared to December 31, 2006, which was primarily a result of a $1,765 increase in margin taxes and other state income taxes in 2007 from no expense in 2006.  The increase was also attributable to a $271 increase in salary due to new hires, a $709 increase in stock administration and a $908 increase in office expenses primarily resulting from new accounting software which we adopted in 2007.  Investment advisor fees were increased by $146 due to increased investments.  These increases were partially offset by a decrease of $1,161 in professional fees, a $324 decrease in acquisition costs due to our stabilized property portfolio and a $133 decrease on mortgage service costs due to lower rate taking effective in 2007.

Advisor asset management fee.  We acquired our business manager/advisor through the merger on November 15, 2007.  Prior to the merger, we paid an advisor asset management fee which represented a fee of not more than 1% of our average invested assets (as defined in our advisor agreement) to our business manager/advisor.  The fee was payable quarterly in an amount equal to 1/4 of up to 1% of our average invested assets as of the last day of the immediately preceding quarter.  We recorded actual fees of $23,750 and $39,500, representing 35.0% and 53.0% of the maximum fees allowed, for the years ended December 31, 2007 and 2006, respectively.  Our former business manager/advisor agreed to forego any fees allowed but not taken on an annual basis.  The decrease of $15,750 from 2006 was due to only paying the advisor asset management fees through November 15, 2007 and the former business manager/advisor also electing not to be paid for the first quarter of 2007.

Dividend income. Dividend income includes dividends earned on our marketable securities and other investments.  The decrease of $13,772 or 36.7% for the year ended December 31, 2007, as compared to December 31, 2006, is primarily due to the redemption of our investment in various preferred shares, on which we earned $16,489 of dividend income during the year ended December 31, 2006.  Our investment in the various preferred shares of approximately $260,000 was redeemed in full in the fourth quarter of 2006.  The decrease was partially offset by an increase of $2,717 in dividend income earned on our investments in marketable securities, due to an increase of approximately $28,000 of investments.

Interest income. Interest income includes income earned on our operating bank accounts, short-term cash investments and notes receivable, as well as from escrows accounts.  The decrease of $9,456 or 41% for the year ended December 31, 2007, as compared to December 31, 2006, includes a decrease of $5,700 related to interest earned on our operating bank accounts and short-term cash investments as a result of our deployment of available cash into investment properties and development joint ventures since December 31, 2006.  In addition, a decrease of $3,511 in the interest income on notes receivable is the result of the full or partial payoff of two mortgage notes and three construction loans receivable since December 31, 2006.

Equity in earnings (losses) of unconsolidated entities.   Equity in earnings (losses) of unconsolidated entities consists of our portion of the net income or losses of joint ventures which we account for under the equity method.  The increase in our equity in earning (losses) of $3,823 or 102.6% is due to earnings of $2,229 allocated to us from a new joint venture with an institutional investor which was formed in April 2007, an increase of $590 resulting from a decrease in equity losses due to better performance of investments in 2007 than 2006 and the decrease of $790 in equity losses recognized from two entities which were redeemed on March 1, 2007 with the recognition of twelve months of equity losses in 2006.  

Minority interests. Minority interests include minority interest holders’ allocation of net income or losses of consolidated joint venture entities.  Minority interests for the year ended December 31, 2007, as compared to December 31, 2006, decreased by $3,340 or 169.1% primarily as a result of a decrease in the redemption of minority interest in the first quarter of 2007.  The gain of $389 recognized from redemptions in the first and fourth quarter of 2007 was allocated to minority interest as well.  

Interest expense. The increase in interest expense of $2,706 or 1.2% for the year ended December 31, 2007, as compared to December 31, 2006, is primarily due to an increase of $6,829 on those mortgages financed during the year of 2006, for



25




which a full year of interest expense exists in 2007, an increase of $6,886 associated with eleven new financings during 2007, a $2,084 increase from interest on construction loans related to new development projects, and an increase of $1,609 related to interest incurred on a new $50,000 note to a joint venture and the $75,000 draw on the line of credit.  In addition, a $757 increase was attributable to an increase in interest rates on the variable rate debt.  These increases are partially offset by a decrease in interest expense of $5,975 as a result of the assumption of eight mortgage debts by an unconsolidated joint venture, a decrease of $1,701 as a result of decreased preferred return payments due to joint venture partners redemption, a decrease of $596 related to refinancing of certain variable interest debts in early 2007 and a $975 decrease resulting from the payoff of three mortgage debts during the year of 2007.  In addition, there was a $2,597 decrease as a result of a reduction in margin debt and $3,429 decrease as a result of additional interest capitalized related to construction in progress.

Realized loss on investment securities. The increase in the realized loss on investment securities of $20,383 or 4,899.8% for the year ended December 31, 2007, as compared to December 31, 2006, is due primarily to the recognition during the year ended December 31, 2007 of a $20,021 decline in value of seven of our investment securities which we determined to be other than temporary and is partially offset by an increase in the gain on the sale of investment securities.

Other income (expense). Other income (expense) includes miscellaneous income, joint venture management fee income and other non-operating expenses incurred by us, including income tax expense.  The increase in other income (expense) of $400 or 245.4% for the year ended December 31, 2007 as compared to 2006 is primarily the result of the increase of certain unconsolidated joint venture management fees earned and the gain on redemption of interest in certain unconsolidated joint ventures offset by an increase in the income tax expense due to an increase in excise tax in 2007.

Discontinued operations . On November 29, 2007, the Company closed on the sale of four American Express properties with an aggregate sale price of $270,800 which resulted in net proceeds of $115,587.  Three of the properties are located in United States and one is located in Canada with approximately 1,562 square feet in total.  The Company recognized a gain on the sale of operating properties of $19,564 and a $17,732 gain on the extinguishment of debt relating to $150,460 of debt assumed by the purchaser.  The Company also wrote off approximately $970 in customer relations value on the remaining American Express properties due to this sale.




26




Comparison of the Year Ended December 31, 2007 to December 31, 2006 – Same Store Portfolio

The table below presents operating information for our same store portfolio consisting of 278 operating properties acquired or placed in service prior to January 1, 2006, along with a reconciliation to net operating income.  The properties in the same store portfolios as described were owned for the entire years ended December 31, 2007 and 2006.

[IWEST10K123107FINAL010.GIF]



27




On a same store basis, net operating income increased by $23,393 or 4.9%, with total rental income, tenant recoveries and other property income increasing by $52,012 or 7.7% and total property operating expenses increasing by $28,619 or 14.7% for the year ended December 31, 2007, as compared to December 31, 2006.

Rental and additional rental income. The increase in rental income of the same store portfolio of $7,561 or 1.5% is due primarily to the completion of earnouts and the leasing or renewal of previously vacant space at rental rates in excess of the previous rental rates.  The increase in tenant recovery income of $15,540 or 13.8% is primarily due to increases in property operating and real estate tax expenses as described below.  The increase in other property income of $4,301 or 45.5% is due primarily to an increase in termination fee income.

Property operating expenses. The increase in recoverable property operating expenses of the same store portfolio of $14,660 or 14.1% is due to an overall inflationary increase in security, landscaping, cleaning and utility costs at our properties as well as an increase in management fees which are calculated based upon revenues collected.  Non-reimbursable expenses also increased, partially as a result of an increase in the provision for bad debt expense as well as an increase in non-recoverable utility costs and marketing and other promotional expenses intended to maintain historical occupancy levels and increase leasing activity at our properties.

Real estate taxes. Real estate taxes of the same store portfolio increased $3,701 or 5.2% for the year ended December 31, 2007, as compared to December 31, 2006, primarily as a result of higher assessed valuations on investment properties acquired in 2005 and 2004.  At the time of acquisition, many newly acquired properties may still be assessed at a lower value based on the seller’s historical cost of the land and improvements.  Once the property is acquired, this may trigger a higher assessment based on the sales price and market comparables for similar operating properties, resulting in higher real estate taxes in future years.



28




Comparison of the Year Ended December 31, 2006 to December 31, 2005 - Total Portfolio

The table below presents selected operating information for our total portfolio of operating properties (including the consolidated joint venture properties) for the years ended December 31, 2006 and 2005.

  [IWEST10K123107FINAL012.GIF]

Rental income.  Rental income consists of basic monthly rent and percentage rental income due pursuant to tenant leases.  Rental income of the total portfolio increased $155,900 or 39.0%. The increase was due primarily to 302 properties (including the consolidated joint venture properties) being owned and operated for the year ended December 31, 2006 compared to 284 properties (including the consolidated joint venture properties) for the year ended December 31, 2005.  178 of the properties in our portfolio (including the consolidated joint venture properties) were purchased during 2005 and as such, 2006 was the first full year of operations for greater than 50% of our portfolio.

Tenant recovery income.   Tenant recovery income represents reimbursements from tenants for common area expenses, property management fees, insurance and real estate taxes incurred by the property.  Tenant recovery income increased by $32,017 or 34.3%.  This increase is primarily due to 302 properties (including the consolidated joint venture properties) being owned and operated for the year ended December 31, 2006 compared to 284 properties (including the consolidated joint venture properties) for the year ended December 31, 2005.  178 of the properties in our portfolio (including the consolidated joint venture properties) were purchased during 2005 and as such, 2006 was the first full year of operations for greater than 50% of our portfolio.

Other property income.   The increase in other property income of $3,749 or 53.0% for the year ended December 31, 2006, as compared to the year ended December 31, 2005 is primarily due to increases in miscellaneous property income, termination fee income and sales tax income.    



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Property operating expenses.   Property operating expenses include common area expenses, property management fees and insurance costs that are reimbursed by tenants according to the terms of their leases as well as non-reimbursable operating expenses, including a provision for bad debt expense.  The increase in property operating expenses of $36,419 or 44.4% is primarily due to 302 properties (including the consolidated joint venture properties) being owned and operated for the year ended December 31, 2006 compared to 284 properties (including the consolidated joint venture properties) for the year ended December 31, 2005.  178 of the properties in our portfolio (including the consolidated joint venture properties) were purchased during 2005 and as such, 2006 was the first full year of operations for greater than 50% of our portfolio.

Real estate taxes.   Real estate taxes increased $25,617 or 47.2% for the year ended December 31, 2006, as compared to the year ended December 31, 2005.  This increase is primarily due to 302 properties (including the consolidated joint venture properties) being owned and operated for the year ended December 31, 2006 compared to 284 properties (including the consolidated joint venture properties) for the year ended December 31, 2005.  178 of the properties in our portfolio (including the consolidated joint venture properties) were purchased during 2005 and as such, 2006 was the first full year of operations for greater than 50% of our portfolio.  The majority of real estate taxes are reimbursed by tenants according to their lease terms and such recovery is included as a component of tenant recovery income.

Depreciation and amortization.   Depreciation and amortization increased $70,144 or 38.8% for the year ended December 31, 2006 as compared to the year ended December 31, 2005.  Depreciation expense includes depreciation on buildings and improvements.  Depreciation expense increased $55,125 or 39.3% primarily as a result of depreciation on eighteen properties acquired and earnouts completed since December 31, 2005.  Amortization expense includes amortization on intangible assets and leasing commissions.  Total amortization expense increased $15,019 or 37.0%.  Amortization expense on intangible assets increased $14,841 or 36.7% due to amortization expense on intangible assets as a result of eighteen properties acquired and earnouts completed since December 31, 2005.  The increase was also due to the write-off of intangible assets attributable to tenants that vacated in 2006.  Amortization expense on leasing commissions increased $177 or 53.8% primarily due to amortization on an additional $1,566 in leasing commissions since December 31, 2005

General and administrative expenses. General and administrative expenses consist of salaries and computerized information services costs reimbursed to affiliates for maintaining our accounting and investor records, affiliate common share purchase discounts, insurance, postage, printing costs and fees paid to accountants and lawyers.  The increase of $3,855 or 35.8% in general and administrative expenses of the total portfolio resulted from increased services required for a larger portfolio of investment properties.

Advisor asset management fee. The advisor asset management fee represents a fee of not more than 1% of our average invested assets (as defined in our advisor agreement) paid to our former business manager/advisor. We compute our average invested assets by taking the average of these values at the end of each month for which we are calculating the fee.  The fee is payable quarterly in an amount equal to 1/4 of up to 1% of our average invested assets as of the last day of the immediately preceding quarter. The increase of $18,575 or 88.8% is due to the increase in our average invested assets for the year ended December 31, 2006 versus 2005. Based upon the maximum allowable advisor asset management fee of 1% of our average invested assets, maximum advisor asset management fees of $74,895 and $54,933 were allowed for the years ended December 31, 2006 and 2005, respectively.  We incurred actual fees of $39,500 and $20,925, which represented 53% and 38% of the maximum fees allowed, for the years ended December 31, 2006 and 2005, respectively.  Our business manager/advisor has agreed to forego any fees allowed but not taken on an annual basis.

Dividend income.   Dividend income includes dividends earned on our marketable securities and other investments.  The increase of $29,940 or 396.0% from the year ended December 31, 2005 to December 31, 2006 is due to the significant increase in funds that we invested in securities and other investments during late 2005 and most of 2006.

Interest income.  Interest income included income earned on our operating bank accounts, short-term cash investments and notes receivable.  The increase of $2,677 or 13.1% was due primarily to the increase in the amount of funds that we had invested in notes receivable as well as higher interest rates earned on our operating bank accounts and short-term investments during the year ended December 31, 2006 as compared to December 31, 2005.

Other (expense) income. Other (expense) income includes miscellaneous non-operating income earned and non-operating expense incurred by us.  The decrease of $400 or 168.8% is primarily the result of the increase of miscellaneous non-operating expense.



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Interest expense. The increase in interest expense of the total portfolio of $81,909 or 60.8% was due to the financing on 298 properties (including the consolidated joint venture properties) compared to 263 properties (including the consolidated joint venture properties) as of December 31, 2006 and 2005, respectively, as well a significant increase in our margin payable on our investment securities and overall increasing interest rates throughout 2005 and 2006.

Comparison of the Year Ended December 31, 2006 to December 31, 2005 - Same Store Portfolio

The table below presents operating information for our same store portfolio consisting of 107 operating properties acquired or placed in service prior to January 1, 2005, along with a reconciliation to net operating income.  The properties in the same store portfolios as described were owned for the entire years ended December 31, 2006 and 2005.

[IWEST10K123107FINAL014.GIF]



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On a same store basis, net operating income increased by $131,517 or 38.0%, with total rental income, tenant recoveries and other property income increasing by $192,426 or 40.1% and total property operating expenses increasing by $60,909 or 45.8% for the year ended December 31, 2006, as compared to December 31, 2005.

Rental and additional rental income. The increase in rental income of the same store portfolio of $5,576 or 2.3% is due primarily to earnouts and the leasing or renewal of previously vacant space at rental rates in excess of the previous rental rates.  The decrease in tenant recovery income of $3,540 or (5.3)% is primarily due to seller billing tenants at an inflated recovery rate.  The increase in other property income of $1,050 or 36.6% is due primarily to many of the vacancies at the various properties being covered by master leases from the seller. Vacant spaces at the time of closing may be paid by the seller in a master lease, which are not accounted for as income, but rather accounted for as a reduction to the asset purchase price. Once new tenants have occupied these spaces, their rents are accounted for as rental income and recovery income.

Property operating expenses. The increase in property operating expenses of the same store portfolio of $3,496 or 6.3% is primarily caused by an increase in common area maintenance cost, including utility cost (gas and electric) and snow removal cost in 2006.

Real estate taxes. Real estate taxes of the same store portfolio increased $724 or 1.9% for the   year ended December 31, 2006, as compared to December 31, 2005, primarily as a result of higher assessed valuations on investment properties. At the time of acquisition, many newer properties may still be assessed at a lower value based on the seller’s historical cost of the land and improvements.  Once the property is acquired, this may trigger a higher assessment based on the sales price and market comparables for similar operating properties, resulting in higher real estate taxes.

Liquidity and Capital Resources

General

Our principal demands for funds have been and will continue to be for property acquisitions, including development, payment of operating expenses, payment of interest on outstanding indebtedness and stockholder distributions. Generally, cash needs for items other than property acquisitions have been met from operations, and property acquisitions have been funded by public offerings of our shares of common stock and property financing proceeds.

Potential future sources of capital include proceeds from our DRP, secured or unsecured financings from banks or other lenders, proceeds from the sale of properties, strategic joint venture arrangements, as well as undistributed funds from operations.  We anticipate that during the upcoming year we will (i) acquire additional existing multi-tenant shopping centers; (ii) invest in the development of additional shopping center sites and (iii) continue to pay distributions to stockholders, and each is expected to be funded mainly from cash flows from operating activities, financings or other external capital resources available to us. We continue to explore ways to manage our cash on hand in order to enhance returns on our investments.

Our leases typically provide that the tenant bears responsibility for a majority of all property costs and expenses associated with ongoing maintenance and operation, including, but not limited to, utilities, property taxes and insurance. In addition, in some instances our leases provide that the tenant is responsible for roof and structural repairs.  Certain of our properties are subject to leases under which we retain responsibility for certain costs and expenses associated with the property.  We anticipate that capital demands to meet obligations related to capital improvements with respect to properties will be minimal for the foreseeable future (as many of our properties have recently been constructed or rehabbed) and can be met with funds from operations and working capital. We believe that our current capital resources (including cash on hand) and anticipated financings are sufficient to meet our liquidity needs for 2008.



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Liquidity

Our primary uses and sources of our consolidated cash are as follows:

Uses

 

Sources

 

 

 

Short Term:

·

Tenant construction allowances

·

Minor improvements made to individual properties that are not recoverable through common area maintenance charges to tenants

·

Dividend payments

·

Debt repayment requirements, including both principal and interest

·

Stock repurchases

·

Corporate and administrative expenses

 

·

Operating cash flow,

·

Borrowings under revolving credit facilities

·

Dividend reinvestment plan

 

 

 

Longer Term:

·

Acquisitions

·

New development

·

Major redevelopment, renovation or expansion programs at individual properties

·

Debt repayment requirements, including both principal and interest

 

·

Secured loans collateralized by individual properties

·

Unsecured loans at company level

·

Construction loans

·

Mini-permanent loans

·

Long-term project financing

·

Joint venture financing with institutional partners

·

Equity securities

·

Asset sales

 

 

 

The sources and uses of cash have generally been the same over the past several years. The decrease in the amount of funds necessary for acquisitions in 2007 has been partially offset by the increase in the amount of funds necessary for our investments in the development joint ventures.

Mortgage Debt.   Mortgage loans outstanding as of December 31, 2007 were $4,112,645 and had a weighted average interest rate of 4.97%.  Of this amount, $3,933,559 had fixed rates ranging from 3.99% to 7.48% and a weighted average fixed rate of 4.91% at December 31, 2007.  Excluding the mortgage debt assumed from sellers at acquisition and debt related to consolidated joint venture investments, the highest fixed rate on our mortgage debt was 5.94%.  The remaining $179,086 of mortgage debt represented variable rate loans with a weighted average interest rate of 6.29% at December 31, 2007.  As of December 31, 2007, scheduled maturities for our outstanding mortgage indebtedness had various due dates through March 1, 2037.

Line of Credit. On October 15, 2007, we entered into an unsecured line of credit arrangement with a bank for up to $225,000, expandable to $300,000. The facility has an initial term of three years with one-year extension option.  The funds from this line of credit were used for working capital.   The line of credit requires interest only payments monthly at the rate equal to LIBOR plus 80 to 125 basis points, depending on our net worth to total recourse indebtedness. We are also required to pay, on a quarterly basis, fees ranging from 0.125% to 0.2%, depending on the undrawn amount, on the average daily undrawn funds under this line.  The line of credit requires compliance with certain covenants, such as debt service coverage ratios, minimum net worth requirements, distribution limitations and investment restrictions.  As of December 31, 2007, we were in compliance with such covenants.  The outstanding balance on the line of credit was $75,000 as of December 31, 2007 with an effective interest rate of 6.05% per annum.



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We terminated our previous unsecured line of credit facility in December 2006.  The facility, obtained in 2004, had an unsecured borrowing capacity of $250,000.  During its existence, funds from the line of credit were used, from time to time, to provide liquidity from the time a property was purchased until permanent debt was placed on the property.  The line of credit required interest only payments monthly on drawn funds at a rate equal to LIBOR plus up to 190 basis points depending on our leverage ratio.  We were also required to pay, on a quarterly basis, an amount ranging from 0.15% to 0.25% per annum on the average daily undrawn funds on the line.  The agreement also required compliance with certain covenants, such as debt service ratios, minimum net worth requirements, distribution limitations and investment restrictions.  We were in compliance with such covenants throughout the facility’s existence.  

Stockholder Liquidity.   We provide the following programs to facilitate investment in our shares and to provide limited, interim liquidity for stockholders until such time as a market for the shares develops:

The DRP, subject to certain share ownership restrictions, allows stockholders who have purchased shares in our offerings to automatically reinvest distributions by purchasing additional shares from us.  Such purchases under the DRP are not subject to selling commissions or the marketing contribution and due diligence expense allowance.  Participants may currently acquire shares under the DRP at a price equal to $10.00 per share.  The price per share had been $9.50 through payment of the August 2006 distribution at which point it was increased to $10.00 per share.  In the event (if ever) of a listing on a national stock exchange, shares purchased by us for the DRP will be purchased on such exchange or market at the then prevailing market price, and will be sold to participants at that price.  As of December 31, 2007, we had issued 46,545 shares pursuant to the DRP for an aggregate amount of $451,871.

On December 14, 2006, we announced a modification to SRP as follows:

·

Effective February 1, 2007, the repurchase price for all shares will be $9.75 per share for any requesting stockholder that has beneficially owned the shares for at least one year; and

·

Effective October 1, 2007, the repurchase price for all shares will be $10.00 per share for any requesting stockholder that has beneficially owned the shares for at least one year.

Prior to February 1, 2007, the SRP subject to certain restrictions provided existing stockholders with limited, interim liquidity by enabling them to sell shares back to us at the following prices:

·

One year from the purchase date, at $9.25 per share;

·

Two years from the purchase date, at $9.50 per share;

·

Three years from the purchase date, at $9.75 per share; and

·

Four years from the purchase date, at the greater of $10.00 per share, or a price equal to 10 times our "funds available for distribution" per weighted average shares outstanding for the prior calendar year.

We make repurchases under the SRP, if requested, at least once quarterly on a first-come, first-served basis.  Subject to funds being available, we limit the number of shares repurchased during any calendar year to five percent (5%) of the weighted average number of shares outstanding during the prior calendar year.  Funding for the SRP comes exclusively from proceeds that we receive from the sale of shares under the DRP and other such operating funds, if any, as our board of directors, at its sole discretion, may reserve for this purpose.

We cannot guarantee that the funds set aside for the SRP will be sufficient to accommodate all requests made each year.  If no funds are available for the SRP when repurchase is requested, the stockholder may: (i) withdraw the request; or (ii) ask that we honor the request at such time, if any, when funds are available.  Such pending requests will be honored on a first-come, first-served basis.

Our board of directors, at its sole discretion, may choose to terminate the SRP, or reduce the number of shares purchased under the SRP, if it determines that the funds allocated to the SRP are needed for other purposes, such as the acquisition, maintenance or repair of properties, or for use in making a declared distribution.

There is no requirement that stockholders sell their shares to us. The SRP is only intended to provide interim liquidity for stockholders until a liquidity event occurs, such as the listing of the shares on a national securities exchange, inclusion of



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the shares for quotation on a national market system, or a merger with a listed company.  No assurance can be given that any such liquidity event will occur.

Shares purchased by us under the SRP will be canceled and will have the status of authorized but unissued shares.  Shares acquired by us through the SRP will not be re-issued unless they are first registered with the SEC under the Securities Act of 1933 and under appropriate state securities laws, or otherwise issued in compliance with such laws.

As of December 31, 2007, 21,107 shares had been repurchased for a total of $205,331.

Capital Resources

We expect to meet our short-term operating liquidity requirements generally through our net cash provided by property operations.  We also expect that our properties will generate sufficient cash flow to cover our operating expenses plus pay a monthly distribution on our weighted average shares outstanding.  Operating cash flows are expected to increase as additional properties are added to our portfolio.

We seek to balance the financial risk and return to our stockholders by leveraging our properties at approximately 50-60% of their value.  We also believe that we can borrow at the lowest overall cost of funds or interest rate by placing individual financing on each of our properties.  Accordingly, mortgage loans generally have been placed on each property at the time that the property is purchased, or shortly thereafter, with the property solely securing the financing.

During the year ended December 31, 2007, we closed on mortgage debt with a principal amount of $423,402 on our wholly-owned and consolidated joint venture properties.  All new loans represented fixed rate loans which bear interest rates between 5.02% and 5.94%.

We have entered into interest rate lock agreements with a lender to secure interest rates on mortgage debt on properties we currently own or plan to purchase in the future. As of December 31, 2007, we have an outstanding rate lock deposit of $9,450 for agreements locking only the Treasury portion of mortgage debt interest rates. These agreements lock the Treasury portion of rates at 4.63% and 4.51% on an aggregate of $135,000 in treasury positions that can be converted into full rate locks through the first quarter of 2008, or can be extended monthly for up to six months. Allocations to these agreements will be made upon conversion into a full rate lock at which time the interest rate will be determined.

Although the loans we closed are generally non-recourse, occasionally, when it is deemed to be advantageous, we may guarantee all or a portion of the debt on a full-recourse basis or cross-collateralize loans.  The majority of our loans require monthly payments of interest only, although some loans require principal and interest payment as well as reserves for real estate taxes, insurance and certain other costs.  Individual decisions regarding interest rates, loan-to-value, fixed versus variable-rate financing, maturity dates and related matters are often based on the condition of the financial markets at the time the debt is incurred, which conditions may vary from time to time.

Distributions are determined by our board of directors and are dependent on a number of factors, including the amount of funds available for distribution, flow of funds, our financial condition, any decision by our board of directors to reinvest funds rather than to distribute the funds, our capital expenditures, the annual distribution required to maintain REIT status under the Internal Revenue Code and other factors the board of directors may deem relevant.

The following table compares cash flows provided by operations to cash distributions declared:

[IWEST10K123107FINAL016.GIF]

In 2004, the deficiency was funded through advances from our sponsor.  In 2005, the deficiency was funded through payments received under master leases and cash provided by financing activities.



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Statement of Cash Flows Comparison of Year Ended December 31, 2007 to December 31, 2006

Cash Flows From Operating Activities

Cash flows provided by operating activities were $321,802 and $296,165 for the years ended December 31, 2007 and 2006, respectively, which consists primarily of net income from property operations.  The increase in net cash provided by operating activities was due to additional revenues generated from the operating properties (including the consolidated joint venture properties) as of December 31, 2007, compared to December 31, 2006.  This increase was offset by a $51,530 gain due to the sale and contribution of investment properties.

Cash Flows From Investing Activities

Cash flows used in investing activities were $524,912 and $523,058, respectively, for the years ended December 31, 2007 and 2006.  Cash flows used in investing activities were primarily used for the acquisition of nine wholly-owned and consolidated joint venture properties for $477,378, and 18 wholly-owned and consolidated joint venture properties for $569,608 during the years ended December 31, 2007 and 2006, respectively.  In addition, during the years ended December 31, 2007 and 2006, we invested $28,195 and $130,400 in marketable securities and other investments and funded $37,733 and $71,899 on notes receivable.

Cash Flows From Financing Activities

Cash flows provided by financing activities were $92,719 and $155,797, respectively, for the years ended December 31, 2007 and 2006.  We paid $140,143 for share repurchases in 2007.  We also generated $490,159 and $426,065 from the issuance of new mortgages secured by our investment properties. During the years ended December 31, 2007 and 2006, we also generated $132,962 and $39,335 through the purchase of securities on margin.  We paid $9,209 and $8,671 for loan fees and $135,267 and $129,745 in distributions, net of distributions reinvested, to our stockholders for the years ended December 31, 2007 and 2006, respectively.

Statement of Cash Flows Comparison of Year Ended December 31, 2006 to December 31, 2005

Cash flows provided by operating activities were $296,165 and $201,857 for the years ended December 31, 2006 and 2005, respectively, which consists primarily of net income from property operations.  The increase in net cash provided by operating activities was due to additional revenues generated from the operation of 306 properties (including the consolidated joint venture properties) owned as of December 31, 2006, compared to 290 properties (including the consolidated joint venture properties) owned as of December 31, 2005.


Cash Flows From Investing Activities


Cash flows used in investing activities were $523,058 and $3,942,227, respectively, for the years ended December 31, 2006 and 2005.  Cash flows used in investing activities were primarily used for the acquisition of 18 wholly-owned and consolidated joint venture properties for $569,608, and 177 wholly-owned and consolidated joint venture properties and one consolidated joint venture property for $3,396,042 during the years ended December 31, 2006 and 2005, respectively.  In addition, during the years ended December 31, 2006 and 2005, we invested $133,603 and $408,809 in marketable securities and other investments and funded $71,899 and $195,232 on notes receivable.


Cash Flows From Financing Activities


Cash flows provided by financing activities were $155,797 and $3,797,993, respectively, for the years ended December 31, 2006 and 2005.  We generated proceeds from the sale of shares, net of offering costs paid and shares repurchased, of $1,837,105 for the year ended December 31, 2005.  We paid $47,286 for share repurchases and offering costs in 2006.  We also generated $426,065 and $2,043,836 from the issuance of new mortgages secured by our investment properties. During the years ended December 31, 2006 and 2005, we also generated $39,335 and $81,498 through the purchase of securities on margin. During the year ended December 31, 2005, we generated $90,000 from funding on the line of credit, all of which was repaid in full by December 31. We paid $8,671 and $26,404 for loan fees and $129,745 and $98,015 in distributions, net of distributions reinvested, to our stockholders for the years ended December 31, 2006 and 2005, respectively.



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Effects of Transactions with Related and Certain Other Parties

On November 15, 2007, we acquired our business manager/advisor and property managers in exchange for 37,500 newly issued shares of our stock.   The business manager/advisor and property managers became subsidiaries of ours.  As part of the acquisition, we gained 239 experienced employees to perform the business manager/advisor functions and operate the property management companies.

Agreements Terminated Upon Consummation of the Merger

Prior to the merger on November 15, 2007, we paid an advisor asset management fee of not more than 1% of the average invested assets to our business manager/advisor.  Average invested asset value is defined as the average of the total book value, including acquired intangibles, of our real estate assets plus our loans receivable secured by real estate, before reserves for depreciation, reserves for bad debt or other similar non-cash reserves.  We computed the average invested assets by taking the average of these values at the end of each month for which the fee is being calculated.  The fee was payable quarterly in an amount equal to 1/4 of up to 1% of the Company’s average invested assets as of the last day of the immediately preceding quarter.  Based upon the maximum allowable advisor asset management fee of 1% of our average invested assets, maximum fees of $68,083, $74,895 and $54,993 were allowed for the years ended December 31, 2007, 2006 and 2005, respectively.  We incurred actual fees to our former business manager/advisor totaling $23,750, $39,500 and $20,925, which represented 35%, 53% and 38% of the maximum fees allowed, for the years ended December 31, 2007, 2006 and 2005, respectively.  The maximum allowable advisor management fee and the advisor asset management fee incurred for the year ended December 31, 2007 were both prorated through November 15, 2007, the date of the merger.  As of December 31, 2007 and 2006, none and $9,000, respectively, remained unpaid and are included in “Other liabilities” in the accompanying consolidated balance sheets.  The business manager/advisor agreed to forego any fees allowed but not taken on an annual basis.  

The business manager/advisor and its affiliates were also entitled to reimbursement for general and administrative costs, primarily salaries, relating to our administration and acquisition of properties.  For the year ended December 31, 2007, 2006 and 2005, we incurred $873, $998 and $1,096, respectively, of these.  Of these costs, $404 and $152 remained unpaid as of December 31, 2007 and 2006, respectively and are included in “Accounts payable and accrued expenses” in the accompanying consolidated balance sheets.  

In 2005, we entered into a subscription agreement with Minto Builders (Florida), Inc., or MB REIT, an entity consolidated by one of our affiliates, Inland American Real Estate Trust, Inc., or "Inland American" to purchase newly issued Series C preferred shares at a purchase price of $1,276 per share.  Under the agreement, MB REIT had the right to redeem any Series C preferred shares it issued to us with the proceeds of any subsequent capital contributed by Inland American.  MB REIT was required to redeem any and all outstanding Series C preferred shares held by us by December 31, 2006 and did so during the fourth quarter of 2006.  The Series C preferred shares, while outstanding, entitled us to an annual dividend equal to 7.0% on the face amount of the Series C preferred shares, which was payable monthly.  We evaluated our investment in MB REIT under FIN 46(R) and determined that MB REIT was a variable interest entity but that we were not the primary beneficiary.  Due to our lack of influence over the operating and financial policies of the MB REIT, this investment is accounted for under the cost method in which investments are recorded at their original cost.  As of December 31, 2005, we had invested $224,003 in these shares.  An additional $40,000 was invested during 2006 and the total of $264,003 was redeemed during the fourth quarter of 2006.  We earned $16,489 and $2,100 in dividend income related to this investment during the years ended December 31, 2006 and 2005, respectively.  None of the dividend remained unpaid as of December 31, 2006.

We entered into an arrangement with Inland American whereby we were paid to guarantee customary non-recourse carve out provisions of Inland American's financings until such time as Inland American reached a net worth of $300,000.  We evaluated the accounting for the guarantee arrangements under FIN 45: Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, and recorded the fair value of the guarantees and amortized the liability over the guarantee period of one year.  The fee arrangement called for a fee of $50 annually for loans equal to and in excess of $50,000 and $25 annually for loans less than $50,000.  We recorded fees totaling $149 for the year ended December 31, 2006, all of which had been received as of that date.  We were released from all our obligations under this arrangement during 2006.



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Agreements Surviving Merger

The property managers were entitled to receive property management fees totaling 4.5% of gross operating income, for management and leasing services through November 15, 2007, the date of the merger.  We incurred property management fees of $30,036, $29,800 and $20,686 for the years ended December 31, 2007, 2006 and 2005, respectively.  In addition, we reimbursed the property managers for certain salaries and related employee benefits totaling $5,423, $5,313 and $2,268 for the years ended December 31, 2007, 2006 and 2005, respectively.  No amounts remained unpaid as of December 31, 2007 and 2006.  Subsequent to the mergers, the property managers are entitled to receive property management fees totaling 4.5% of gross operating income, for management and leasing services, all of which are eliminated in the consolidated financial statements.

An affiliate also provides investment advisory services to us related to our securities investments for an annual fee.  The affiliate has full discretionary authority with respect to the investment and reinvestment of assets in that account, subject to investment guidelines we provide to them.  The affiliates have also been granted a power of attorney and proxy to tender or direct the voting or tendering of all investments held in the account.  The fee is incremental based upon the aggregate market value of assets invested.  Based upon our assets invested, the fee was equal to 0.75% per annum (paid monthly) of aggregate market value of assets invested.  We incurred fees totaling $2,107, $1,961 and $536 for the years ended December 31, 2007, 2006 and 2005, respectively.  As of December 31, 2007 and 2006, $325 and $362, respectively, remained unpaid and are included in ”Accounts payable and accrued expenses” in the accompanying consolidated balance sheets.  The agreement is non-exclusive as to both parties and is cancellable by providing not less than 180 days prior written notice and specification of the effective date of said termination.  

An affiliate provides loan servicing for us.  Effective May 1, 2005, the loan servicing agreement stipulated that if the number of loans being serviced exceeded one hundred, a monthly fee was charged in the amount of 190 dollars per month, per loan being serviced.  Effective April 1, 2006, the agreement was amended so that if the number of loans being serviced exceeded one hundred, a monthly fee of 150 dollars per month, per loan was charged.  Effective May 1, 2007, the agreement was again amended so that if the number of loans being serviced exceeds two hundred, a monthly fee of 125 dollars per month, per loan is charged.  Such fees totaled $562, $696 and $534 for the years ended December 31, 2007, 2006 and 2005, respectively.  As of December 31, 2007 and 2006, none and $24, respectively, remained unpaid and are included in ”Accounts payable and accrued expenses” in the accompanying consolidated balance sheets.  The agreement is non-exclusive as to both parties and is cancellable by providing not less than 180 days prior written notice and specification of the effective date of such termination.

An affiliate facilitates the mortgage financing we obtain on some of our properties.  We pay the affiliate 0.2% of the principal amount of each loan obtained on our behalf.  Such costs are capitalized as loan fees and amortized over the respective loan term as a component of interest expense.  For the years ended December 31, 2007 and 2006, we paid loan fees totaling $873 and $1,051, respectively, to this affiliate.  As of December 31, 2007 and 2006, none remained unpaid.  The agreement is non-exclusive as to both parties and is cancellable by providing not less than 180 days prior written notice and specification of the effective date of such termination.

Agreements Entered Into Upon Consummation of Merger

We terminated our existing acquisition agreement with an Inland affiliate and entered into a new property acquisition agreement and a transition property due diligence services agreement with that affiliate.  In connection with our acquisition of new properties, the affiliate will give us a first right as to all retail, mixed use and single tenant properties and, if requested, provide various services including services to negotiate property acquisition transactions on our behalf and prepare suitability, due diligence, and preliminary and final pro forma analyses of properties proposed to be acquired.  We will pay all reasonable, third party out-of-pocket costs incurred by this entity in providing such services; pay an overhead cost reimbursement of $12 per transaction; and, to the extent these services are requested by us, pay a cost of $7 for due diligence expenses and a cost of $25 for negotiation expenses per transaction.  As of December 31, 2007, we have not incurred any such costs under the new agreement.  For the year ended December 31, 2007, 2006 and 2005 we incurred $134, $363 and $1,184, respectively, of these costs.  Of these costs, $27 and $25 remained unpaid as of December 31, 2007 and 2006, respectively and are included in “Accounts payable and accrued expenses” in the accompanying consolidated balance sheets.  The agreement is non-exclusive as to both parties and is cancellable by providing not less than 180 days prior written notice and specification of the effective date of said termination.  



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We entered into an institutional investor relationships services agreement with an Inland affiliate.  Under the terms of the agreement, the Inland affiliate will attempt to secure institutional investor commitments in exchange for advisory and client fees and reimbursement of project expenses.  For the year ended December 31, 2007, 2006 and 2005, we incurred $257, $137 and none, respectively, of these costs.  Of these costs, none and $137 remained unpaid as of December 31, 2007 and 2006, respectively and are included in “Accounts payable and accrued expenses” in the accompanying consolidated balance sheets.  The agreement is non-exclusive as to both parties and is cancellable by providing not less than 180 days prior written notice and specification of the effective date of said termination.  

An Inland affiliate also entered into a legal services agreement with us, primarily with our business manager/advisor, where that affiliate will provide us with certain legal services in connection with our real estate business.  We will pay the affiliate for legal services rendered under the agreement on the basis of actual time billed by attorneys and paralegals at the affiliate's hourly billing rate then in effect in increments of one-tenth of one hour.  The billing rate is subject to change on an annual basis, provided, however, that the billing rates charged by the affiliate will not be greater than the billing rates charged to any other client and will not be greater than 90% of the billing rate of attorneys of similar experience and position employed by nationally recognized law firms located in Chicago, Illinois performing similar services.  For the year ended December 31, 2007, 2006 and 2005, we incurred $897, $705 and $1,884, respectively, of these costs.  Of these costs, $141 and $150 remained unpaid as of December 31, 2007 and 2006, respectively and are included in “Accounts payable and accrued expenses” in the accompanying consolidated balance sheets.  The agreement is non-exclusive as to both parties and is cancellable by providing not less than 180 days prior written notice and specification of the effective date of said termination.  

We entered into consulting agreements with Daniel L. Goodwin, Robert D. Parks, our chairman, and G. Joseph Cosenza, who will each provide with us with strategic assistance for the term of their respective agreement including making recommendations and providing guidance to us as to prospective investment, financing, acquisition, disposition, development, joint venture and other real estate opportunities contemplated from time to time by us and our board of directors.  The consultants will also provide additional services as may be reasonably requested from time to time by our board of directors. The term of each agreement runs until November 15, 2010 unless terminated earlier.  We may terminate these consulting agreements at any time.  The consultants will not receive any compensation for their services, but we will reimburse their expenses in fulfilling their duties under the consulting agreements.   There were no reimbursements under the consulting agreements in 2007.

We entered into amendments to each of our existing service agreements with certain affiliates, including an amendment to our office and facilities management services agreement, insurance and risk management services agreement, computer services agreement, personnel services agreement, property tax services agreement and communications services agreement.  Generally these agreements and the amendments provide that we can obtain certain services from the affiliates for reimbursement of their general and administrative costs relating to our administration and acquisition of properties.  For the year ended December 31, 2007, 2006 and 2005, we incurred $3,092, $1,334 and $945, respectively, of these costs.  Of these costs, $900 and $203 remained unpaid as of December 31, 2007 and 2006, respectively and are included in “Accounts payable and accrued expenses” in the accompanying consolidated balance sheets.  The amendments provide that the services provided under the terms of the applicable services agreements are to be provided on a non-exclusive basis in that we shall be permitted to employ other parties to perform any one or more of the services and that the applicable counterparty shall be permitted to perform any one or more of the services to other parties.  The agreement and related amendments have various expiration dates but are cancellable by providing not less than 180 days prior written notice and specification of the effective date of such termination.  

We sub lease our office space from an affiliate.  The lease calls for annual base rent of $496 and additional rent in any calendar year of its proportionate share of taxes and common area maintenance costs.  Additionally, the affiliate paid certain tenant improvements under the lease in the amount of $395.  Such improvements are being repaid by us over a period of five years.  The sublease calls for an initial term of five years which expires November 2012 with one option to extend for an additional five years.



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Off-Balance Sheet Arrangements, Contractual Obligations, Liabilities and Contracts and Commitments

Off Balance Sheet Arrangements

In April 2007, we entered into a joint venture arrangement with a state pension fund.  Under this joint venture agreement we are to contribute 20% of the equity and our joint venture partner will contributes 80% of the equity, up to a total $500,000.  The joint venture plans to acquire assets using equity contribution and leverage up to $1,000,000.  As of December 31, 2007, we had contributed approximately $29,500 and expect to contribute the remaining $70,500 in the next two years.  As of December 31, 2007, the joint venture had acquired seven properties (which we contributed) with an estimated purchase price of approximately $336,000 and had assumed from us mortgages on these properties totaling approximately $188,000.  Under the agreement, we are the managing member of the joint venture and earn various fees for acquisition, asset management and property management.  We account for our interest in the joint venture using the equity method of accounting. See Note 11 Investment in Unconsolidated Joint Ventures in our accompanying Consolidated Financial Statements for further discussion.

Other than described above, we have no off-balance sheet arrangements as of December 31, 2007 that are reasonably likely to have a current or future material effect on our financial condition, or cause changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

The table below presents our obligations and commitments to make future payments under debt obligations and lease agreements as of December 31, 2007.

Contractual Obligations

[IWEST10K123107FINAL018.GIF]

(1)

In addition to principal payments, the amounts reflected include interest payments.  Interest payments related to the variable rate debt were calculated using the corresponding interest rates as of December 31, 2007.

(2)

Fixed rate debt and related interest includes a $50,000 note payable to an unconsolidated joint venture.  This note has no maturity, but interest is reflected at the stated rate through December 31, 2008, although we may choose not to repay in 2008.  Variable rate debt and related interest includes $75,000 of borrowings under our line of credit and is reflected as being outstanding through December 31, 2008, as we are not required to repay such borrowings until the termination date of the line of credit in 2010, or, if extended, 2011.  Variable rate debt and related interest is reflected as being outstanding through December 31, 2008, also includes $108,040 of margin debt secured by our portfolio of marketable securities.  These borrowings may be repaid over time upon our sale of our portfolio of marketable securities.

The remaining borrowings and related interest relate to four mortgage payables and one construction loan.  Mortgage payables will be refinanced or paid off in 2008 using our line of credit.  The construction loan will be paid off at the time of sale of the property or refinanced to a mortgage payable.  Amounts related to interest for fixed rate and variable rate debt will be paid from the operations of our properties and income from our portfolio of marketable securities.

(3)

We lease land under non-cancelable leases at certain of the properties expiring in various years from 2024 to 2105.  The property attached to the land will revert back to the lessor at the end of the lease.

(4)

Purchase obligations include earnouts on previously acquired properties.



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Contracts and Commitments

We have acquired several properties which have earnout components, meaning that we did not pay for portions of these properties that were not rent producing at the time of acquisition.  We are obligated, under certain agreements, to pay for those portions when a tenant moves into its space and begins to pay rent.  The earnout payments are based on a predetermined formula.  Each earnout agreement has a time limit regarding the obligation to pay any additional monies. The time limits generally range from one to three years.  If at the end of the time period allowed certain space has not been leased and occupied, we will own that space without any further payment obligation.  Based on pro forma leasing rates, we may pay as much as $148,222 in the future as retail space covered by earnout agreements is occupied and becomes rent producing.

We have entered into three construction loan agreements and four other installment note agreements in which we have committed to fund up to a total of $43,570.  Each loan, except one, requires monthly interest payments with the entire principal balance due at maturity.  The combined receivable balance at December 31, 2007 was $33,801.  Therefore, we may be required to fund up to an additional $9,655 on these loans.

We guarantee a portion of the construction debt associated with certain of the development joint ventures.  The guarantees are released as certain leasing parameters are met.  As of December 31, 2007, the amount guaranteed by us was $5,471.

As of December 31, 2007, we had 13 irrevocable letters of credit outstanding related to loan fundings against earnout spaces at certain properties.  Once we purchase the remaining portion of these properties and meet certain occupancy requirements, the letters of credit will be released.  The balance of outstanding letters of credit at December 31, 2007 was $22,063.

We have entered into interest rate lock agreements with a lender to secure interest rates on mortgage debt on properties we currently own or plan to purchase in the future.  As of December 31, 2007, we had an outstanding rate lock deposit of $9,450 for agreements locking only the Treasury portion of mortgage debt interest rates.  These agreements lock the Treasury portion of rates at 4.63% and 4.51% on $135,000 in positions that can be converted into full rate locks through the first quarter of 2008, or can be extended monthly for up to six months.  Allocations to these agreements will be made upon conversion into a full rate lock at which time the all-in interest rate will be determined.

Our decision to acquire a property generally depends upon no material adverse change occurring relating to the property, the tenants or in the local economic conditions, and our receipt of satisfactory due diligence information including appraisals, environmental reports and lease information prior to purchasing the property.  A property known as Jefferson Commons, located in Newport News, VA, was under consideration for acquisition as of December 31, 2007 and subsequently acquired by us for a purchase price of $79,644 on February 14, 2008.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions.  These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  For example, significant estimates and assumptions have been made with respect to useful lives of assets, capitalization of development and leasing costs, provision for income taxes, recoverable amounts of receivables, deferred taxes, initial valuations and related amortization periods of deferred costs and intangibles, particularly with respect to property acquisitions, and cost ratios and completion percentages used for land sales. Actual results could differ from those estimates.

Critical Accounting Policies and Estimates

The following disclosure pertains to accounting policies and estimates we believe are most “critical” to the portrayal of our financial condition and results of operations which require our most difficult, subjective or complex judgments.  These judgments often result from the need to make estimates about the effect of matters that are inherently uncertain.  Critical accounting policies discussed in this section are not to be confused with accounting principles and methods disclosed in accordance with accounting principles generally accepted in the United States of America, or GAAP.  GAAP requires information in financial statements about accounting principles, methods used and disclosures pertaining to significant



41




estimates.  This discussion addresses our judgment pertaining to trends, events or uncertainties known which were taken into consideration upon the application of those policies and the likelihood that materially different amounts would be reported upon taking into consideration different conditions and assumptions.

Acquisition of Investment Property

We allocate the purchase price of each acquired investment property between land, building and other improvements, acquired above market and below market leases, in-place lease value, any assumed financing that is determined to be above or below market terms and the value of customer relationships, if any.  The allocation of the purchase price is an area that requires judgment and significant estimates.  We use the information contained in the independent appraisal obtained upon acquisition of each property as the primary basis for the allocation to land and building and improvements.  We determine whether any financing assumed is above or below market based upon comparison to similar financing terms for similar investment properties.  We allocate a portion of the purchase price to the estimated acquired in-place lease costs based on estimated lease execution costs for similar leases as well as lost rent payments during an assumed lease up period when calculating as-if-vacant fair values.  In this analysis we consider various factors including geographic location and the size of the leased space.  We also evaluate each significant acquired lease based upon current market rates at the acquisition date and we consider various factors including geographical location, the size and the location of the leased space within the investment property, tenant profile and the credit risk of the tenant in determining whether the acquired lease is above or below market lease costs.  If an acquired lease is determined to be above or below market, we allocate a portion of the purchase price to such above or below market acquired lease costs based upon the present value of the difference between the contractual lease rate and the estimated market rate.  For below market leases with fixed rate renewals, renewal periods are included in the calculation of below market lease values.  The determination of the discount rate used in the present value calculation is based upon the “risk free rate.”  This discount rate is a significant factor in determining the market valuation which requires our judgment of subjective factors such as market knowledge, economics, demographics, location, visibility, age and physical condition of the property.

Impairment of Long-Lived Assets

In accordance with Financial Accounting Standards Board’s (“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 144: Accounting for the Impairment or Disposal of Long-Lived Assets, we perform a quarterly analysis to identify impairment indicators to ensure that each investment property’s carrying value does not exceed its fair value.  If an impairment indicator is present, we perform an undiscounted cash flow valuation analysis based upon many factors which require difficult, complex or subjective judgments to be made.  Such assumptions include projecting vacancy rates, rental rates, operating expenses, lease terms, tenant financial strength, economy, demographics, property location, capital expenditures and sales value among other assumptions to be made upon valuing each property.  This valuation is sensitive to the actual results of any of these uncertain factors, either individually or taken as a whole.

Cost Capitalization, Depreciation and Amortization Policies

Our policy is to review all expenses paid and capitalize any items which are deemed to be an upgrade or a tenant improvement. These costs are included in the investment properties classification as an addition to buildings and improvements.

Buildings and improvements are depreciated on a straight-line basis based upon estimated useful lives of 30 years for buildings and improvements and 15 years for site improvements and most other capital improvements.  Acquired in-place lease costs, customer relationship value, other leasing costs and tenant improvements are amortized on a straight-line basis over the life of the related lease as a component of depreciation and amortization expense.  The portion of the purchase price allocated to acquired above market costs and acquired below market costs are amortized on a straight-line basis over the life of the related lease as an adjustment to net rental income.

Cost capitalization and the estimate of useful lives requires our judgment and includes significant estimates that can and do change based on our process which periodically analyzes each property and on our assumptions about uncertain inherent factors.



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Assets Held For Sale

In determining whether to classify an asset as held for sale, we consider whether: (i) management has committed to a plan to sell the asset; (ii) the asset is available for immediate sale, in its present condition; (iii) we have initiated a program to locate a buyer; (iv) we believe that the sale of the asset is probable; (v) we have received a significant non-refundable deposit for the purchase of the property; (vi) we are actively marketing the asset for sale at a price that is reasonable in relation to its current value; and (vii) actions required for us to complete the plan indicate that it is unlikely that any significant changes will be made to the plan.

If all of the above criteria are met, we classify the asset as held for sale.  On the day that these criteria are met, we suspend depreciation on the assets on the assets held for sale, including depreciation for tenant improvements and additions, as well as on the amortization of acquired in-place leases and customer relationship values.  The assets and liabilities associated with those assets that are held for sale are classified separately on the consolidated balance sheets for the most recent reporting period.  Additionally, the operations for the periods presented are classified on the consolidated statements of operations and other comprehensive income as discontinued operations for all periods presented.

Revenue Recognition

We commence revenue recognition on our leases based on a number of factors.  In most cases, revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of the leased asset.  Generally, this occurs on the lease commencement date.  The determination of who is the owner, for accounting purposes, of the tenant improvements determines the nature of the leased asset and when the revenue recognition under a lease begins.  If we are the owner of the tenant improvements, for accounting purposes, then the leased asset is the finished space and revenue recognition begins when the lessee takes possession of the finished space, typically when the improvements are substantially complete.  If we conclude that we are not the owner of the tenant improvements (the lessee is the owner), for accounting purposes, then the leased asset is the unimproved space and any tenant improvement allowances funded under the lease are treated as lease incentives which reduce revenue recognized over the term of the lease.  In these circumstances, we begin revenue recognition when the lessee takes possession of the unimproved space for the lessee to construct their own improvements.  For accounting purposes, we consider a number of different factors to evaluate whether we or the lessee is the owner of the tenant improvements.  These factors include:

·

Whether the lease stipulates how and on what a tenant improvement allowance may be spent;

·

Whether the tenant or landlord retains legal title to the improvements;

·

The uniqueness of the improvements;

·

The expected economic life of the tenant improvements relative  to the length of the lease; and

·

Who constructs or directs the construction of the improvements.

The determination of who owns the tenant improvements, for accounting purposes, is subject to significant judgment.  In making that determination, we consider all of the above factors.  No one factor, however, necessarily establishes our determination.

We recognize rental income on a straight-line basis over the term of each lease.  The difference between rental income earned on a straight-line basis and the cash rent due under the provisions of the lease agreements is recorded as deferred rent receivable.

Reimbursements from tenants for recoverable real estate tax and operating expenses are accrued as revenue in the period the applicable expenditures are incurred.  We make certain assumptions and judgments in estimating the reimbursements at the end of each reporting period.

We record lease termination income if there is a signed termination letter agreement, all of the conditions of the agreement have been met and the tenant is no longer occupying the property.  Upon early lease termination we provide for losses related to unrecovered intangibles and other assets.



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SAB 101 provides that a lessor should defer recognition of contingent rental income (i.e. percentage/excess rent) until the specified target (i.e. breakpoint) that triggers the contingent rental income is achieved.  We record percentage rental revenue in accordance with SAB 101.

In conjunction with certain acquisitions, we receive payments under master lease agreements pertaining to certain non-revenue producing spaces either at the time of, or subsequent to, the purchase of these properties.  Upon receipt of the payments, the receipts are recorded as a reduction in the purchase price of the related properties rather than as rental income.  These master leases are established at the time of purchase in order to mitigate the potential negative effects of loss of rent and expense reimbursements.  Master lease payments are received through a draw of funds escrowed at the time of purchase and generally cover a period from three months to three years.  Under the terms of the agreements, these funds may be released to either us or the seller when certain leasing conditions are met.

We account for profit recognition on sales of real estate in accordance with Financial Accounting Standards Board’s (“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 66: Accounting for Sales of Real Estate .  In summary, profits from sales will not be recognized under the full accrual method by us unless a sale is consummated; the buyer’s initial and continuing investments are adequate to demonstrate a commitment to pay for the property; our receivable, if applicable, is not subject to future subordination; we have transferred to the buyer the usual risks and rewards of ownership; and we do not have substantial continuing involvement with the property.

Marketable Securities and Other Investments

All publicly traded equity securities are classified as “available for sale” and carried at fair value, with unrealized gains and losses reported as a separate component of shareholders’ equity.  Private investments, for which we do not have the ability to exercise significant influence, are accounted for at cost.  Declines in the value of public and private investments that management determines are other than temporary are recorded as a provision for loss on investments.

To determine whether an impairment is other than temporary, we consider whether we have the ability and intent to hold the investment until a market price recovery and consider whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary.  Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the impairment, changes in value subsequent to year-end and forecasted performance of the investee.

Partially-Owned Entities

If we determine that we are an owner in a variable interest entity within the meaning of FIN 46(R) and that our variable interest will absorb a majority of the entity’s expected losses if they occur, receive a majority of the entity’s expected residual return if it occurs, or both, then we will consolidate the entity.  Following consideration under FIN 46(R), if required, in accordance with EITF Issue No. 04-5: Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity when the Limited Partners Have Certain Rights, we evaluate applicable partially-owned entities for consolidation.  At issue in EITF No. 04-5 is what rights held by the limited partner(s) preclude consolidation in circumstances in which the sole general partner would consolidate the limited partnership in accordance with U. S. GAAP.  Finally, we generally consolidate entities (in the absence of other factors when determining control) when we have over a 50% ownership interest in the entity.  However, we also evaluate who controls the entity even in circumstances in which we have greater than a 50% ownership interest.  If we do not control the entity due to the lack of decision-making abilities, we will not consolidate the entity even when we have greater than a 50% ownership interest.

Allowance for Doubtful Accounts

We periodically evaluate the collectability of amounts due from tenants and maintain an allowance for doubtful accounts for estimated losses resulting from the inability of tenants to make required payments under the lease agreements.  We also maintain an allowance for receivables arising from the straight-lining of rents. This receivable arises from revenue recognized in excess of amounts currently due under the lease agreements. Management exercises judgment in establishing these allowances and considers payment history and current credit status in developing these estimates.



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Recording of Below Market Lease Intangibles

We discovered that we had underestimated previously recorded below market lease liabilities and overestimated amortization of below market leases due to the exclusion of certain fixed rent renewal periods and market rents utilized during the initial year of our operations.  We determined that the market rates used in the original below market analyses for certain acquisitions were inappropriate and required adjustments based upon comparable leases and further analyses by our property managers.  These errors resulted in an overstatement of our 2004 and 2005 net income by an aggregate amount of $3,637.

Recognition of Ancillary Taxes

We had previously accounted for our ancillary taxes in the period of payment due to the immaterial nature of these taxes, which were expected to not give rise to significant out-of-period adjustments.  However, in reviewing the tax amounts paid and recorded in the 1 st and 2 nd quarters of 2006, it was determined that there was an overstatement of tax expense in 2006 for payments relating to 2005 taxes.  These errors resulted in our overstating our 2005 net income by $1,056.  Since the third quarter of 2006, ancillary taxes have been recorded on an accrual basis.

Cumulative Effect of Adopting SAB 108

As a result of applying the guidance in SAB 108 during the year ended December 31, 2006, we recorded a reduction of $4,693 to stockholders’ equity (accumulated distributions in excess of net income) in our opening balance sheet to correct the effect of the errors associated with the recording of below market lease intangibles and recognition of ancillary taxes, described above.

Impact of Recent Accounting Principles

In September 2006, the FASB issued SFAS No. 157: Fair Value Measurements (SFAS 157) .  This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements.  This Statement applies to accounting pronouncements that require or permit fair value measurements, except for share-based payments transactions under SFAS No. 123(R).  This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007.  As SFAS 157 does not require any new fair value measurements or remeasurements of previously computed fair values, we do not believe adoption of this Statement will have a material effect on our consolidated financial statements.  In February 2007, the FASB issued FASB Staff Position FAS 157-2, which delays the effective date of SFAS 157 for non-financial assets and non-financial liabilities to fiscal years beginning after November 15, 2008.

In February 2007, the FASB issued SFAS No. 159: The Fair Value Option for Financial Assets and Financial Liabilities (SFAS 159) .  This Statement permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value.  The Statement also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities.  SFAS 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, although early application is allowed.  We are currently evaluating the application of this Statement and its effect on our consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141R: Business Combinations (SFAS 141R) , which requires most identifiable assets, liabilities, noncontrolling interests, and goodwill acquired in a business combination to be recorded at "full fair value."  Under SFAS 141R, all business combinations will be accounted for by applying the acquisition method.  SFAS 141R is effective for periods beginning on or after December 15, 2008.  We are currently evaluating the effect of this Statement and its effect on our consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160: Noncontrolling Interests in Consolidated Financial Statements (SFAS 160) .  SFAS 160 will require noncontrolling interests (previously referred to as minority interests) to be treated as a separate component of equity, not as a liability or other item outside of permanent equity.  In addition, the statement applies to the accounting for noncontrolling interests and transactions with noncontrolling interest holders in consolidated financial statements.  SFAS 160 is effective for periods beginning on or after December 15, 2008.  We are currently evaluating the effect of this Statement and its effect on our consolidated financial statements.



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Subsequent Events

During the period from January 1 to March 28, 2008, we:

·

Issued 3,965 shares of common stock through the DRP and repurchased 5,177 shares of common stock through the SRP resulting in a total of 483,710 shares of common stock outstanding at March 28, 2008;

·

Paid distributions of $77,804 to stockholders in January, February and March 2008, for December 2007 and January and February 2008, respectively.  The distribution represented an annualized distribution rate of $0.64 per share;

·

Acquired a shopping center know as Jefferson Commons, located in Newport News, VA, for purchase price of $79,644 with 306,287 square feet and assumption of mortgage debt with a principal balance of $56,500;

·

Funded earnouts totaling $38,747 to purchase an additional 130 square feet at eleven existing properties;

·

Funded a $2,466 construction loan and paid off one $5,951 construction loan receivables;

·

Funded additional capital of $2,911 on three development joint ventures, and deposited $900 on a new development joint venture;

·

Funded $3,265 on two construction-in-progress projects;

·

Deposited $5,400 of margin calls related to Treasury lock agreements; and

·

Borrowed $50,000 from the line of credit.

Our board of directors approved the following, effective January 1, 2008:

·

Each non-affiliated director will be entitled to be granted an option to acquire 5 shares of our common stock as of the date they initially become a director under our Independent Director Stock Option Plan.  In addition, each non-affiliated director will be entitled to be granted an option to acquire an additional 5 shares on the date of each annual stockholders’ meeting, commencing with the annual meeting in 2008, so long as the director remains a member of the board of directors on such date.  All options will be granted at fair market value on the date of grant, and will become fully exercisable on the second anniversary of the date of grant.  There were no other changes made to the terms of option grants under the Independent Director Stock Option Plan.

·

The addition of Messrs Richard P. Imperiale and Kenneth E. Masick to our board of directors.

Inflation

For our multi-tenant shopping centers, inflation is likely to increase rental income from leases to new tenants and lease renewals, subject to market conditions.  Our rental income and operating expenses for those properties owned, or expected to be owned and operated under net leases, are not likely to be directly affected by future inflation, since rents are or will be fixed under those leases and property expenses are the responsibility of the tenants.  The capital appreciation of single-user net lease properties is likely to be influenced by interest rate fluctuations.  To the extent that inflation determines interest rates, future inflation may have an effect on the capital appreciation of single-user net lease properties.  As of December 31, 2007, we owned 122 single-user net lease properties.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We may be exposed to interest rate changes primarily as a result of long-term debt used to maintain liquidity and fund capital expenditures and expansion of our real estate investment portfolio and operations.  Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs.  To achieve our objectives we borrow primarily at fixed rates or variable rates through interest rate lock agreements with the lowest margins available and in some cases, with the ability to convert variable rates to fixed rates.

We have entered into interest rate lock agreements with a lender to secure interest rates on mortgage debt on properties we currently own or plan to purchase in the future. As of December 31, 2007, we has an outstanding rate lock deposit of $9,450 for agreements locking only the Treasury portion of mortgage debt interest rates. These agreements lock the



46




Treasury portion of rates at 4.63% and 4.51% on $135,000 in treasury positions that can be converted into full rate locks through the first quarter of 2008, or can be extended monthly for six months. Allocations to these agreements will be made upon conversion into a full rate lock at which time the interest rate will be determined.

With regard to variable rate financing, we assess interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities.  We maintain risk management control systems to monitor interest rate cash flow risk attributable to both of our outstanding or forecasted debt obligations as well as our potential offsetting hedge positions.  The risk management control systems involve the use of analytical techniques, including cash flow sensitivity analysis, to estimate the expected impact of changes in interest rates on our future cash flows.

We may use derivative financial instruments to hedge exposures to changes in interest rates on loans secured by our properties.  To the extent we do, we are exposed to credit risk and market risk.  Credit risk is the failure of the counterparty to perform under the terms of the derivative contract.  When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us.  When the fair value of a derivative contract is negative, we owe the counterparty and, therefore, it does not possess credit risk.  It is our policy to enter into these transactions with the same party providing the financing, with the right of offset.  In the alternative, we will minimize the credit risk in derivative instruments by entering into transactions with high-quality counterparties.  Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates.  The market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

The carrying amount of our debt and other financing is $144,709 higher than its fair value as of December 31, 2007.

Our interest rate risk is monitored using a variety of techniques. The table below presents the principal amounts and weighted average interest rates by year and expected maturity to evaluate the expected cash flows and sensitivity to interest rate changes.

 

2008

2009

2010

2011

2012

Thereafter

Maturing debt:

 

 

 

 

 

 

  Fixed rate debt

$  108,942

911,920

1,287,829

420,970

380,677

873,696

  Variable rate debt

205,406

156,720

- 

- 

- 

- 

Weighted average interest rate on debt:

 

 

 

 

 

 

  Fixed rate debt

4.77%

4.70%

4.77%

4.91%

5.30%

5.17%

  Variable rate debt

5.56%

6.24%

- 

- 

- 

- 

 

 

 

 

 

 

 

We had $362,126 of variable rate debt with an average interest rate of 5.86% as of December 31, 2007.  An increase in the variable interest rate on this debt constitutes a market risk.  If interest rates increase by 1%, based on debt outstanding as of December 31, 2007, interest expense increases by approximately $3,621 on an annual basis.


The table incorporates only those interest rate exposures that existed as of December 31, 2007.  It does not consider those interest rate exposures or positions that could arise after that date.  The information presented herein is merely an estimate and has limited predictive value.  As a result, the ultimate realized gain or loss with respect to interest rate fluctuations will depend on the interest rate exposures that arise during the period, our hedging strategies at that time, and future changes in the level of interest rates.



47




Item 8.  Consolidated Financial Statements and Supplementary Data


Index


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.

Page


Reports of Independent Registered Public Accounting Firm

49


Financial Statements:


  Consolidated Balance Sheets at December 31, 2007 and 2006

51


  Consolidated Statements of Operations and Other Comprehensive Income (Loss) for the years ended

    December 31, 2007, 2006 and 2005

52


  Consolidated Statements of Stockholders' Equity for the years ended December 31, 2007, 2006

    and 2005

53


  Consolidated Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005

55


  Notes to Consolidated Financial Statements

58


Valuation and Qualifying Accounts (Schedule II)

82


Real Estate and Accumulated Depreciation (Schedule III)

83


MS Inland Fund, LLC Financial Statements


  Report of Independent Registered Public Accounting Firm

102

  Balance Sheet at December 31, 2007

103

  Statement of Operations for the period ended December 31, 2007

104

  Statement of Members’ Equity for the period ended December 31, 2007

105

  Statement of Cash Flows for the period ended December 31, 2007

106

  Notes to Financial Statements

107

Schedules not filed:


All schedules other than the one listed in the Index have been omitted as the required information is inapplicable or the information is presented in the financial statements or related notes.






48





Report of Independent Registered Public Accounting Firm


The Board of Directors and Stockholders

Inland Western Retail Real Estate Trust, Inc.:

We have audited the accompanying consolidated balance sheets of Inland Western Retail Real Estate Trust, Inc. (the Company) as of December 31, 2007 and 2006, and the related consolidated statements of operations and other comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2007.  In connection with our audits of the consolidated financial statements, we also have audited financial statement schedules II and III. These consolidated financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Inland Western Retail Real Estate Trust, Inc. as of December 31, 2007 and 2006, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2007, in conformity with U.S. generally accepted accounting principles.  Also in our opinion, the financial statement schedules when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of quantifying errors in 2006 pursuant to Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.”

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Inland Western Retail Real Estate Trust, Inc.’s internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 31, 2008 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.


KPMG LLP



Chicago, Illinois

March 31, 2008




49




Report of Independent Registered Public Accounting Firm


The Board of Directors and Stockholders

Inland Western Retail Real Estate Trust, Inc.:


We have audited Inland Western Retail Real Estate Trust, Inc.’s (the Company) internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) . Inland Western Retail Real Estate Trust, Inc.'s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.  


We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.


A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.  


Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


In our opinion, Inland Western Retail Real Estate Trust, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. .


We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Inland Western Retail Real Estate Trust, Inc. as of December 31, 2007 and 2006, and the related consolidated statements of operations and other comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2007, and our report dated March 31, 2008   expressed an unqualified opinion on those consolidated financial statements .


KPMG LLP



Chicago, Illinois

March 31, 2008



50




INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Consolidated Balance Sheets


December 31, 2007 and 2006
(In thousands, except per share amounts)



[IWEST10K123107FINAL020.GIF]  





See accompanying notes to consolidated financial statements



51




INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Consolidated Statements of Operations and Other Comprehensive Income (Loss)


For the Years Ended December 31, 2007, 2006 and 2005

(In thousands, except per share amounts)



  [IWEST10K123107FINAL022.GIF]




See accompanying notes to consolidated financial statements



52




INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Consolidated Statements of Stockholders' Equity

For the Years Ended December 31, 2007, 2006 and 2005

(In thousands, except per share amounts)



[IWEST10K123107FINAL024.GIF]






See accompanying notes to consolidated financial statements



53




INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Consolidated Statements of Stockholders' Equity
(continued)

For the Years Ended December 31, 2007, 2006 and 2005

(In thousands, except per share amounts)




  [IWEST10K123107FINAL026.GIF]















See accompanying notes to consolidated financial statements



54




INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Consolidated Statements of Cash Flows


For the Years Ended December 31, 2007, 2006 and 2005

(In thousands, except per share amounts)


[IWEST10K123107FINAL028.GIF]








See accompanying notes to consolidated financial statements



55




INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.

Consolidated Statements of Cash Flows


For the Years Ended December 31, 2007, 2006 and 2005

(In thousands, except per share amounts)

(continued)


[IWEST10K123107FINAL030.GIF]


See accompanying notes to consolidated financial statements



56





INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.

Consolidated Statements of Cash Flows


For the Years Ended December 31, 2007, 2006 and 2005

(In thousands, except per share amounts)

(continued)


[IWEST10K123107FINAL032.GIF]


























See accompanying notes to consolidated financial statements



57


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements



(1)   Organization and Basis of Presentation

Inland Western Retail Real Estate Trust, Inc. (the “Company”) was formed on March 5, 2003 to acquire and manage a diversified portfolio of real estate, primarily multi-tenant shopping centers and single-user net lease properties.  

All amounts in this report are stated in thousands with the exception of per share amounts and numbers of properties.

The Company, through two public offerings and the merger, sold or issued a total of 459,483 shares of its common stock at $10.00 per share, resulting in gross proceeds including merger consideration of $4,595,192.  In addition, as of December 31, 2007, the Company had issued 46,545 shares through its distribution reinvestment program ("DRP") at $9.50 to $10.00 per share for $451,870 and had repurchased a total of 21,107 shares through its share repurchase program ("SRP") at prices ranging from $9.25 to $10.00 per share for an aggregate cost of $205,331.  As a result, the Company had total shares outstanding of 484,921 and had realized total net offering proceeds, including merger consideration before offering costs, of $4,841,432 as of December 31, 2007.

On November 15, 2007, pursuant to an agreement and plan of merger, approved by our shareholders on November 13, 2007, the Company acquired, through a series of mergers, four entities affiliated with its former sponsor, Inland Real Estate Investment Corporation, which entities provided business management/advisory and property management services to it.  Shareholders of the acquired companies received an aggregate of 37,500 shares of the Company’s common stock, valued under the merger agreement at $10.00 per share.

The Company accounted for the merger transaction as a consummation of a business combination between parties with a pre-existing relationship, in accordance with EITF Issue No. 04-01, Accounting for Preexisting Relationships between Parties to a Business Combination .  According to EITF Issue No. 04-1, the settlement of an executory contract in a business combination as a result of a preexisting relationship should be measured at the lesser of (a) the amount by which the contract is favorable or unfavorable from the perspective of the acquirer when compared to pricing for current market transactions for the same or similar items or (b) any stated settlement provisions in the contract available to the counterparty to which the contract is unfavorable.  The Company has determined that its agreements with its former business manager/advisor and property managers resulted in zero allocation of the purchase price to contract termination costs.  The assets and liabilities of the acquired companies were recorded at their estimated fair value at the date of the transaction.  The purchase price in excess of the fair value of the assets and liabilities of the acquired companies was allocated to goodwill.

In determining the purchase price, an independent third party rendered an opinion on the $10.00 per share value of the shares, as well as the aggregate purchase price of $375,000.  Additional costs totaling $4,019 were also incurred as part of the merger transaction consisting of financial and legal advisory services and accounting and proxy related costs.  As part of the merger, the value assigned to these tangible and intangible assets was determined by an independent third party engaged to provide such information.  The following table summarizes the estimated fair values of the allocation of the purchase price:

Shares of common stock issued (37,500 shares at $10.00 per share)

$

375,000 

Tangible assets acquired

 

(482)

Intangible assets

 

(621)

Additional merger costs and fees incurred

 

4,019 

 

 

 

Goodwill

$

377,916 

 

 

 

The following condensed pro forma financial information is presented as if the Company’s acquisition of its business manager/advisor and property managers had been consummated as of January 1, 2006, for the pro forma year ended December 31, 2006 and January 1, 2007, for the pro forma year ended December 31, 2007.  The following condensed pro forma financial information is not necessarily indicative of what actual results of operations of the Company would have been assuming the acquisitions had been consummated at the beginning of January 1, 2006, for the pro forma year ended



58


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements



December 31, 2006 and January 1, 2007, for the pro forma year ended December 31, 2007, nor does it purport to represent the results of operations for future periods.

 

 

Proforma

 

 

Years Ended

 

 

December 31,

 

 

2007

 

2006

 

 

 

 

 

Total revenues

$

746,210

$

692,461

 

 

 

 

 

Net income

$

82,952

$

89,063

 

 

 

 

 

Net income per common share

$

0.17

$

0.19

 

 

 

 

 

The Company is qualified and has elected to be taxed as a Real Estate Investment Trust (“REIT”) under the Internal Revenue Code of 1986, as amended, commencing with the tax year ending December 31, 2003.  Since the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal income tax as taxable income that is distributed to stockholders.  If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal income tax on its taxable income at regular corporate tax rates.  Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income, property or net worth and federal income and excise taxes on its undistributed income.  The Company has one wholly-owned subsidiary that has elected to be treated as a taxable REIT subsidiary (“TRS”) for federal income tax purposes.  A TRS is taxed on its net income at regular corporate rates.  The income tax expense incurred as a result of the TRS does not have a material impact on the Company’s accompanying consolidated financial statements.  On November 15, 2007, the Company acquired four qualified REIT subsidiaries.  Their income will be consolidated with REIT income for federal and state income tax purposes.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.  Actual results could differ from those estimates.

Certain reclassifications have been made to the 2006 and 2005 consolidated financial statements to conform to the 2007 presentation.

During 2007, as part of its lease accounting and account reconciliation processes, the Company determined that it had understated the prior year’s revenues and expenses by a net amount of approximately $710, or $0.002 per common share.  The errors were not considered material to the results of operations of any prior period or the current period.  Therefore, certain adjustments related to these revenues and expenses have been recognized.

The accompanying consolidated financial statements include the accounts of the Company, as well as all wholly-owned subsidiaries and consolidated joint venture investments.  Wholly-owned subsidiaries generally consist of limited liability companies (“LLCs”) and limited partnerships (“LPs”).  The effects of all significant intercompany transactions have been eliminated.

The Company consolidates certain property holding entities and other subsidiaries in which it owns less than a 100% equity interest if the entity is a variable interest entity and the Company is the primary beneficiary (as defined in FASB Interpretation (“FIN”) 46(R): Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51, as revised ).  Following consideration under FIN 46(R), if required, the Company also evaluates applicable partially-owned entities under Emerging Issues Task Force ("EITF") Issue No. 04-5: Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity when the Limited Partners Have Certain Rights for consolidation considerations.  The Company has ownership interests ranging between 5% and 95% in the LLCs or LPs



59


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements



which own 12 of the operating properties in its portfolio.  The Company has also made investments in nine real estate development joint ventures.  Under the guidance of FIN 46(R) and EITF 04-5, these entities, with the exception of three development joint ventures, are consolidated by the Company.  

The Company is the controlling member in various consolidated entities. The organizational documents of these entities contain provisions that require the entities to be liquidated through the sale of their assets upon reaching a future date as specified in each respective organizational document or through put/call arrangements.  As controlling member, the Company has an obligation to cause these property owning entities to distribute proceeds of liquidation to the minority interest partners in these partially owned properties only if the net proceeds received by each of the entities from the sale of assets warrant a distribution based on the agreements.  Some of the LLC or LP agreements for these entities contain put/call provisions which grant the right to the outside owners and the Company to require each LLC or LP to redeem the ownership interest of the outside owners during future periods.  In instances where outside ownership interests are subject to put/call arrangements requiring settlement for fixed amounts, the LLC or LP is treated as a 100% owned subsidiary by the Company with the amount due the outside owner reflected as a financing and included in “Other financings” in the accompanying consolidated balance sheets.  Interest expense is recorded on such liabilities in amounts generally equal to the preferred returns due to the outside owners as provided in the LLC or LP agreements.  Outside ownership interests of $37,825 in two entities previously included in “Other financings” were redeemed by the Company during the year ended December 31, 2007.  These redemptions were treated as debt extinguishments for financial reporting purposes.

The Company has entered into an agreement with an LLC formed as an insurance association captive (“Captive”), which is wholly-owned by the Company, two affiliated entities, Inland Real Estate Corporation and Inland American Real Estate Trust, Inc., and one non-affiliated entity which withdrew from the Captive in October 2007, at the approval of the members.  The Captive is serviced by an affiliate, Inland Risk and Insurance Management Services Inc. for a fee of $25 per quarter.  The Company entered into the agreement with the Captive to stabilize its insurance costs, manage its exposures and recoup expenses through the functions of the Captive program.  The Captive was initially capitalized with $750 in cash in 2006, of which the Company’s initial contribution was $188.  Additional contributions were made in the form of premium payments to the Captive determined for each member based upon its respective loss experiences.  The Captive insures a portion of the members’ property and general liability losses.  These losses will be paid by the Captive up to and including a certain dollar limit, after which the losses are covered by a third-party insurer.  It has been determined that under FIN 46(R), the Captive is a variable interest entity and the Company is the primary beneficiary.  Therefore, the Captive has been consolidated by the Company.  The other members’ interests are reflected as minority interests in the accompanying consolidated financial statements.

On March 1, 2007, and December 31, 2007, the Company transferred real estate and investments in consolidated and unconsolidated joint ventures to certain joint venture partners in redemption of their interest in the ventures.  The transactions were accounted for at fair value with the estimated fair value of the non-monetary assets (including $2,581 of cash and cash equivalents) and resulted in an aggregate gain of $389 on redemption of minority interest.  Such gain is included in “Other income (expense)” in the accompanying consolidated statement of operations and was fully allocated to the minority interest partners pursuant to the joint venture agreements.

Minority interests are adjusted for additional contributions by minority holders and distributions to minority holders as well as the minority holders’ share of the net earnings or losses of each respective entity.

(2)

Summary of Significant Accounting Policies


Revenue Recognition: The Company commences revenue recognition on its leases based on a number of factors.  In most cases, revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of the leased asset.  Generally, this occurs on the lease commencement date.  The determination of who is the owner, for accounting purposes, of the tenant improvements determines the nature of the leased asset and when revenue recognition under a lease begins.  If the Company is the owner, for accounting purposes, of the tenant improvements, then the leased asset is the finished space and revenue recognition begins when the lessee takes possession of the finished space, typically when the improvements are substantially complete.  If the Company concludes it is not the owner, for accounting



60


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements



purposes, of the tenant improvements (the lessee is the owner), then the leased asset is the unimproved space and any tenant improvement allowances funded under the lease are treated as lease incentives which reduces revenue recognized over the term of the lease.  In these circumstances, the Company begins revenue recognition when the lessee takes possession of the unimproved space for the lessee to construct their own improvements.  The Company considers a number of different factors to evaluate whether it or the lessee is the owner of the tenant improvements for accounting purposes.  These factors include:

·

whether the lease stipulates how and on what a tenant improvement allowance may be spent;

·

whether the tenant or landlord retains legal title to the improvements;

·

the uniqueness of the improvements;

·

the expected economic life of the tenant improvements relative to the length of the lease; and

·

who constructs or directs the construction of the improvements.


The determination of who owns the tenant improvements, for accounting purposes, is subject to significant judgment.  In making that determination, the Company considers all of the above factors.  No one factor, however, necessarily establishes its determination.

Rental income is recognized on a straight-line basis over the term of each lease. The difference between rental income earned on a straight-line basis and the cash rent due under the provisions of the lease agreements is recorded as deferred rent receivable and is included as a component of “Accounts and rents receivable” in the accompanying consolidated balance sheets.

Reimbursements from tenants for recoverable real estate tax and operating expenses are accrued as revenue in the period the applicable expenditures are incurred.  The Company makes certain assumptions and judgments in estimating the reimbursements at the end of each reporting period.

The Company records lease termination income if there is a signed termination letter agreement, all of the conditions of the agreement have been met, and the tenant is no longer occupying the property. Upon early lease termination, the Company provides for losses related to unrecovered intangibles and other assets.

Staff Accounting Bulletin ("SAB") No. 101: Revenue Recognition in Financial Statements , provides that a lessor should defer recognition of contingent rental income (i.e. percentage/excess rent) until the specified target (i.e. breakpoint) that triggers the contingent rental income is achieved.  The Company records percentage rental revenue in accordance with SAB 101.

In conjunction with certain acquisitions, the Company receives payments under master lease agreements pertaining to certain non-revenue producing spaces either at the time of, or subsequent to, the purchase of these properties.  Upon receipt of the payments, the receipts are recorded as a reduction in the purchase price of the related properties rather than as rental income.  These master leases were established at the time of purchase in order to mitigate the potential negative effects of loss of rent and expense reimbursements.  Master lease payments are received through a draw of funds escrowed at the time of purchase and generally cover a period from three months to three years.  These funds may be released to either the Company or the seller when certain leasing conditions are met.  

The Company accounts for profit recognition on sales of real estate in accordance with Financial Accounting Standards Board’s (“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 66: Accounting for Sales of Real Estate .  In summary, profits from sales will not be recognized under the full accrual method by the Company unless a sale is consummated; the buyer’s initial and continuing investments are adequate to demonstrate a commitment to pay for the property; the Company’s receivable, if applicable, is not subject to future subordination; the Company has transferred to the buyer the usual risks and rewards of ownership; and the Company does not have substantial continuing involvement with the property.



61


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements



Cash and Cash Equivalents: The Company considers all demand deposits, money market accounts and investments in certificates of deposit and repurchase agreements purchased with a maturity of three months or less, at the date of purchase, to be cash equivalents. The Company maintains its cash and cash equivalents at financial institutions.  The combined account balances at one or more institutions periodically exceed the Federal Depository Insurance Corporation ("FDIC") insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage.  The Company believes that the risk is not significant, as the Company does not anticipate the financial institutions' non-performance.

Marketable Securities and Other Investments:   All publicly traded equity securities are classified as "available for sale" and carried at fair value, with unrealized gains and losses reported as a separate component of stockholders' equity.  Private investments, for which we do not have the ability to exercise significant influence, are accounted for at cost.  Declines in the value of public and private investments that management determines are other than temporary are recorded as realized loss on investment securities.

To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary.  Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the impairment, changes in value subsequent to year end and forecasted performance of the investee.

Real Estate: Real estate acquisitions are recorded at cost less accumulated depreciation. Ordinary repairs and maintenance are expensed as incurred.

The Company allocates the purchase price of each acquired investment property between land, building and improvements, acquired above market and below market leases, in-place lease value, any assumed financing that is determined to be above or below market terms and the value of the customer relationships, if any. The allocation of the purchase price is an area that requires judgment and significant estimates.  The Company uses the information contained in the independent appraisal obtained upon acquisition of each property as the primary basis for the allocation to land and building and improvements. The Company determines whether any financing assumed is above or below market based upon comparison to similar financing terms for similar investment properties.  The Company allocates a portion of the purchase price to the estimated acquired in-place lease costs based on estimated lease execution costs for similar leases as well as lost rent payments during an assumed lease-up period when calculating as-if-vacant fair values.  The Company considers various factors including geographic location and size of leased space.  The Company also evaluates each significant acquired lease based upon current market rates at the acquisition date and considers various factors including geographical location, size and location of leased space within the investment property, tenant profile, and the credit risk of the tenant in determining whether the acquired lease is above or below market.  If an acquired lease is determined to be above or below market, the Company allocates a portion of the purchase price to such above or below market acquired lease based upon the present value of the difference between the contractual lease rate and the estimated market rate.  For below market leases with fixed rate renewals, renewal periods are included in the calculation of below market lease values. The determination of the discount rate used in the present value calculation is based upon the "risk free rate." This discount rate is a significant factor in determining the market valuation which requires the Company's judgment of subjective factors such as market knowledge, economics, demographics, location, visibility, age and physical condition of the property.

The portion of the purchase price allocated to acquired in-place lease intangibles is amortized on a straight-line basis over the life of the related lease as a component of depreciation and amortization expense.  The Company incurred amortization expense pertaining to acquired in-place lease intangibles of $60,922, $55,178 and $40,345 for the years ended December 31, 2007, 2006 and 2005, respectively.

The portion of the purchase price allocated to customer relationship value is amortized on a straight-line basis over the life of the related lease as a component of depreciation and amortization expense.  The Company incurred amortization expense pertaining to customer relationship value of $784, $97 and $89 for the years ended December 31, 2007, 2006 and



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Notes to Consolidated Financial Statements



2005.  The increase in amortization expense is due to the write-off of the customer relationship value relating to a tenant for which there is no continuing value.  

The portion of the purchase price allocated to acquired above market lease costs and acquired below market lease costs is amortized on a straight-line basis over the life of the related lease as an adjustment to rental income and over the respective renewal period for below market lease costs with fixed rate renewals.  Amortization pertaining to the above market lease costs of $8,284, $8,621 and $7,219 was applied as a reduction to rental income for the years ended December 31, 2007, 2006 and 2005, respectively.  Amortization pertaining to the below market lease costs of $12,108, $11,278 and $12,714 was applied as an increase to rental income for the years ended December 31, 2007, 2006 and 2005, respectively.

The following table presents the amortization during the next five years related to the acquired in-place lease intangibles, acquired above market lease costs and acquired below market lease costs for properties owned at December 31, 2007.

[IWEST10K123107FINAL034.GIF]

Depreciation expense is computed using the straight-line method.  Buildings and improvements are depreciated based upon estimated useful lives of 30 years for buildings and associated improvements and 15 years for site improvements and most other capital improvements. Tenant improvements and leasing fees are amortized on a straight-line basis over the life of the related lease as a component of depreciation and amortization expense.

Assets Held For Sale: In determining whether to classify an asset as held for sale, we consider whether: (i) management has committed to a plan to sell the asset; (ii) the asset is available for immediate sale, in its present condition; (iii) we have initiated a program to locate a buyer; (iv) we believe that the sale of the asset is probable; (v) we have received a significant non-refundable deposit for the purchase of the property; (vi) we are actively marketing the asset for sale at a price that is reasonable in relation to its current value; and (vii) actions required for us to complete the plan indicate that it is unlikely that any significant changes will be made to the plan.

If all of the above criteria are met, we classify the asset as held for sale.  On the day that these criteria are met, we suspend depreciation on the assets on the assets held for sale, including depreciation for tenant improvements and additions, as well as on the amortization of acquired in-place leases and customer relationship values.  The assets and liabilities associated with those assets that are held for sale are classified separately on the consolidated balance sheets for the most recent reporting period.  Additionally, the operations for the periods presented are classified on the consolidated statements of operations and other comprehensive income as discontinued operations for all periods presented.

Loan fees are amortized using the effective yield method over the life of the related loans as a component of interest expense.

Differences between the carrying amounts of investments in unconsolidated joint ventures and the Company's equity in the underlying assets are depreciated on a straight-line basis over the useful lives of the joint venture assets to which such differences are allocated.

In accordance with the SFAS No. 144: Accounting for the Impairment or Disposal of Long-Lived Assets, the Company performs a quarterly analysis to identify impairment indicators to ensure that each investment property's carrying value does not exceed its fair value. If an impairment indicator is present, the Company performs an undiscounted cash flow



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Notes to Consolidated Financial Statements



valuation analysis based upon many factors which require difficult, complex or subjective judgments to be made.  Such assumptions include projecting vacancy rates, rental rates, operating expenses, lease terms, tenant financial strength, economy, demographics, property location, capital expenditures and sales value among other assumptions to be made upon valuing each property.  This valuation is sensitive to the actual results of any of these uncertain factors, either individually or taken as a whole.  Based upon the Company's judgment, no impairment was warranted for the years ended December 31, 2006 or 2005.  For the year ended December 31, 2007, $13,560 of impairment was warranted.

In accordance with FIN No. 47: Accounting for Conditional Asset Retirement Obligations, the Company evaluates the potential impact of conditional asset retirement obligations on its consolidated financial statements.  FIN 47 clarifies that the term conditional asset retirement obligation as used in SFAS No. 143: Accounting for Asset Retirement Obligations refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity.  Thus, the timing and/or method of settlement may be conditional on a future event.  FIN 47 also clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation.  Based upon the Company's judgment, asset retirement obligations did not have a significant impact on the accompanying consolidated financial statements.

Development Projects :  The Company capitalizes costs incurred during the development period such as construction, insurance, architectural costs, legal fees, interest and other financing costs, and real estate taxes.  At such time as the development is considered substantially complete, those costs included in construction in progress are reclassified to land and building and other improvements.  Development payables of $2,262 at December 31, 2007 consist of costs incurred and not yet paid pertaining to the development projects and are included within accounts payable on the accompanying consolidated financial statements.

Partially-Owned Entities:   If the Company determines that it is an owner in a variable interest entity within the meaning of FIN 46(R): Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51, as revised and that its variable interest will absorb a majority of the entity's expected losses if they occur, receive a majority of the entity's expected residual return if it occurs, or both, then it will consolidate the entity. Following consideration under FIN 46 (R), in accordance with EITF Issue No. 04-5: Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity when the Limited Partners Have Certain Rights, the Company evaluates applicable partially-owned entities for consolidation.  At issue in EITF No. 04-5 is what rights held by the limited partner(s) preclude consolidation in circumstances in which the sole general partner would consolidate the limited partnership in accordance with U.S. generally accepted accounting principles.  Finally, the Company generally consolidates entities (in the absence of other factors when determining control) when it has over a 50% ownership interest in the entity.  However, the Company also evaluates who controls the entity even in circumstances in which it has greater than a 50% ownership interest.  If the Company does not control the entity due to the lack of decision-making abilities, it will not consolidate the entity even if it has greater than a 50% ownership interest.

Notes Receivable: Notes receivable relate to real estate financing arrangements and bear interest at a market rate based on the borrower's credit quality and are recorded at face value.  Interest is recognized over the life of the note.  The Company requires collateral for the notes.

A note is considered impaired in accordance with SFAS No. 114: Accounting by Creditors for Impairment of a Loan .  Pursuant to SFAS No. 114, a note is impaired if it is probable that the Company will not collect all principal and interest contractually due.  The impairment is measured based on the present value of expected future cash flows discounted at the note's effective interest rate.  The Company does not accrue interest when a note is considered impaired.  When ultimate collectability of the principal balance of the impaired note is in doubt, all cash receipts on the impaired note are applied to reduce the principal amount of the note until the principal has been recovered and are recognized as interest income thereafter.  Based upon the Company's judgment, no notes receivable were impaired as of December 31, 2007 or 2006.

Allowance for Doubtful Accounts: The Company periodically evaluates the collectability of amounts due from tenants and maintains an allowance for doubtful accounts for estimated losses resulting from the inability of tenants to make required payments under the lease agreements.  The Company also maintains an allowance for receivables arising from the



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Notes to Consolidated Financial Statements



straight-lining of rents.  This receivable arises from revenue recognized in excess of amounts currently due under the lease agreements.  Management exercises judgment in establishing these allowances and considers payment history and current credit status in developing these estimates.

Rental Expense:   Rental expense associated with land that the Company leases under non-cancelable operating leases is recorded on a straight-line basis over the term of each lease.  The difference between rental expenses incurred on a straight-line basis and rent payments due under the provisions of the lease agreement is recorded as a deferred liability and is included as a component of other liabilities in the accompanying consolidated balance sheets.

Restricted Cash and Escrows: Restricted cash and escrows include funds received by third party escrow agents from sellers pertaining to master lease agreements.  The Company records the third party escrow funds as both an asset and a corresponding liability, until certain leasing conditions are met. Restricted cash and escrows also consist of lenders' escrows and funds restricted through joint venture arrangements.

Stock Options:   The Company adopted SFAS No. 123(R): Share-Based Payment on January 1, 2006 .   This Statement focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions.  This Statement does not change the accounting guidance for share-based payment transactions with parties other than employees provided in SFAS No. 123.  The provisions of SFAS No. 123(R) have not and are not expected to have a significant impact on the Company's consolidated financial statements.  The Company applied the fair value method of accounting as prescribed by SFAS No. 123: Accounting for Stock-Based Compensation for its stock options granted to its independent directors.  Under this method, the Company reports the value of granted options as a charge against earnings ratably over the vesting period.

Fair Value of Debt: The carrying amount of the Company's debt and other financings is approximately $144,709 higher than its fair value.  The Company estimates the fair value of its mortgages payable by discounting the future cash flows of each instrument at rates currently offered to the Company for similar debt instruments of comparable maturities by the Company's lenders.  The carrying amount of the Company's other financial instruments approximate fair value because of the relatively short maturity of these instruments.

Adoption of Staff Accounting Bulletin No. 108

In September 2006, the Securities and Exchange Commission published SAB No. 108: Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements .  The interpretations in SAB 108 express the SEC’s staff’s views regarding the process of quantifying financial statement misstatements.  The staff’s interpretations resulted from their awareness of a diversity in practice as to how the effect of prior year errors were considered in relation to current year financial statements.  Through SAB 108, the staff communicated its belief that allowing prior year errors to remain unadjusted on the balance sheet is not in the best interest of the users of financial statements. SAB 108 became effective for the Company for the year ended December 31, 2006.

In adopting SAB 108, the Company changed its methods of evaluating financial statement misstatements from a “rollover” (income statement-oriented) approach to SAB 108’s “dual-method” (both an income statement and balance sheet-oriented) approach.  In doing so, the Company identified three misstatements previously considered immaterial to all previous periods under the rollover method but material when evaluated together under the dual-method, as described below.  These misstatements were corrected upon adoption of SAB 108 through a cumulative effect adjustment to stockholders’ equity as of January 1, 2006.

Recording of Below Market Lease Intangibles

The Company had underestimated previously recorded below market lease liabilities and overestimated amortization of below market leases due to the exclusion of certain fixed rent renewal periods and market rents utilized during the initial year of its operations.  In addition, the Company determined that the market rates used in the original below market analyses for certain acquisitions were inappropriate and required adjustments based upon comparable leases and analyses



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INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements



by its property managers.  These errors resulted in the Company overstating its 2005 and 2004 net income by an aggregate amount of $3,637.

Recognition of Ancillary Taxes

The Company had previously accounted for its ancillary taxes in the period of payment due to the immaterial nature of these taxes, which were expected to not give rise to significant out-of-period adjustments.  However, in reviewing the tax amounts paid and recorded in the 1 st and 2 nd quarters of 2006, it was determined that there was an overstatement of tax expense in 2006 for payments relating to 2005 taxes.  These errors resulted in an overstatement of 2005 net income by $1,056.  Since the third quarter of 2006, ancillary taxes have been recorded on an accrual basis.

Cumulative Effect of Adopting SAB 108

As a result of applying the guidance in SAB 108 during the year ended December 31, 2006, the Company recorded a reduction of $4,693 to stockholders’ equity (accumulated distributions in excess of net income) in its opening balance sheet to correct the effect of the errors associated with the recording of below market lease intangibles and recognition of ancillary taxes, described above.

New Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157: Fair Value Measurements .  This Statement defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements.  This Statement applies to accounting pronouncements that require or permit fair value measurements, except for share-based payments transactions under SFAS No. 123(R).  This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007.  As SFAS No. 157 does not require any new fair value measurements or remeasurements of previously computed fair values, the Company does not believe adoption of this Statement will have a material effect on its consolidated financial statements.  In February 2007, the FASB issued FASB Staff Position FAS 157-2, which delays the effective date of SFAS 157 for non-financial assets and non-financial liabilities to fiscal years beginning after November 15, 2008.

In February 2007, the FASB issued SFAS No. 159: The Fair Value Option for Financial Assets and Financial Liabilities .  This Statement permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value.  The Statement also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities.  SFAS No. 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, although early application is allowed.  The Company is currently evaluating the application of this Statement and its effect on the Company’s consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141R: Business Combinations , which requires most identifiable assets, liabilities, noncontrolling interests, and goodwill acquired in a business combination to be recorded at "full fair value."  Under SFAS 141R, all business combinations will be accounted for by applying the acquisition method.  SFAS 141R is effective for periods beginning on or after December 15, 2008.  The Company is currently evaluating the application of this statement and its effect upon the Company’s consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160: Noncontrolling Interests in Consolidated Financial Statements .  SFAS 160 will require noncontrolling interests (previously referred to as minority interests) to be treated as a separate component of equity, not as a liability or other item outside of permanent equity.  In addition, the statement applies to the accounting for noncontrolling interests and transactions with noncontrolling interest holders in consolidated financial statements.  SFAS 160 is effective for periods beginning on or after December 15, 2008.  The Company is currently evaluating the application of this statement and its effect upon the Company’s consolidated financial statements.



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Notes to Consolidated Financial Statements



(3)  Discontinued Operations

The Company employs a business model which utilizes asset management as a key component of monitoring its investment properties to ensure that each property continues to meet expected investment returns and standards.  This strategy calls for the Company to sell properties that do not measure up to its standards and re-deploy the sales proceeds into new, higher quality acquisitions and developments that are expected top generate sustainable revenue growth and more attractive returns.

On November 29, 2007, the Company closed on the sale of four American Express properties with an aggregate sale price of $270,800 which resulted in net proceeds of $115,587.  Three of the properties are located in United States and one is located in Canada with approximately 1,562 square feet in total.  The Company recognized a gain on the sale of operating properties of $19,564 and a $17,732 gain on the extinguishment of debt relating to $150,460 of debt assumed by the purchaser.  The Company also wrote off approximately $970 in customer relations value on the remaining American Express properties due to this sale.  The Company does not allocate general corporate interest expense to discontinued operations.

(4)  Transactions with Affiliates

On November 15, 2007, the Company acquired its business manager/advisor and property managers in exchange for 37,500 newly issued shares of our stock.   The business manager/advisor and property managers became subsidiaries of the Company.  As part of the acquisition, the Company gained 239 experienced employees to perform the business manager/advisor functions and operate the property management companies.

Agreements Terminated Upon Consummation of the Merger

Prior to the merger on November 15, 2007, the Company paid an advisor asset management fee of not more than 1% of the average invested assets to its former business manager/advisor.  Average invested asset value is defined as the average of the total book value, including acquired intangibles, of the Company’s real estate assets plus the Company’s loans receivable secured by real estate, before reserves for depreciation, reserves for bad debt or other similar non-cash reserves.  The Company computed the average invested assets by taking the average of these values at the end of each month for which the fee is being calculated.  The fee was payable quarterly in an amount equal to 1/4 of up to 1% of the Company’s average invested assets as of the last day of the immediately preceding quarter.  Based upon the maximum allowable advisor asset management fee of 1% of the Company’s average invested assets, maximum fees of $68,083, $74,895 and $54,993 were allowed for the years ended December 31, 2007, 2006 and 2005, respectively.  The Company incurred actual fees to its former business manager/advisor totaling $23,750, $39,500 and $20,925, which represented 35%, 53% and 38% of the maximum fees allowed for the years ended December 31, 2007, 2006 and 2005, respectively.  The maximum allowable advisor management fee and the advisor asset management fee incurred for the year ended December 31, 2007 were both prorated through November 15, 2007, the date of the merger.  As of December 31, 2007 and 2006, none and $9,000, respectively, remained unpaid and are included in “Other liabilities’ in the accompanying consolidated balance sheets.  The business manager/advisor agreed to forego any fees allowed but not taken on an annual basis.  

The business manager/advisor and its affiliates were also entitled to reimbursement for general and administrative costs, primarily salaries, relating to the Company’s administration and acquisition of properties.  For the year ended December 31, 2007, 2006 and 2005, the Company incurred $873, $998 and $1,096, respectively, of these costs.  Of these costs, $404 and $152 remained unpaid as of December 31, 2007 and 2006, respectively and are included in “Accounts payable and accrued expenses” in the accompanying consolidated balance sheets.  

In 2005, the Company entered into a subscription agreement with Minto Builders (Florida), Inc. (“MB REIT”), an entity consolidated by one of its affiliates, Inland American Real Estate Trust, Inc. (“Inland American”), to purchase newly issued series C preferred shares at a purchase price of $1,276 per share.  Under the agreement, MB REIT had the right to redeem any series C preferred shares it issued to the Company with the proceeds of any subsequent capital contributed by Inland American.  MB REIT was required to redeem any and all outstanding series C preferred shares held by the



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Notes to Consolidated Financial Statements



Company by December 31, 2006 and did so during the fourth quarter of 2006, redeeming a total of $264,003 the Company had invested.  The series C preferred shares, while outstanding, entitled the Company to an annual dividend equal to 7.0% on the face amount of the series C preferred shares, which was payable monthly.  The Company evaluated its investment in MB REIT under FIN 46(R) and determined that MB REIT was a variable interest entity but that the Company was not the primary beneficiary.  Due to the Company’s lack of influence over the operating and financial policies of the MB REIT, this investment is accounted for under the cost method in which investments are recorded at their original cost.  As of December 31, 2005, the Company had invested $224,003 in these shares.  An additional $40,000 was invested during 2006 and the total of $264,003 was redeemed during the fourth quarter of 2006.  The Company earned $16,489 and $2,100 in dividend income related to this investment during the years ended December 31, 2006 and 2005, respectively.  None of the dividend remained unpaid as of December 31, 2006.

The Company entered into an arrangement with Inland American whereby the Company was paid to guarantee customary non-recourse carve out provisions of Inland American’s financings until such time as Inland American reached a net worth of $300,000.  The Company evaluated the accounting for the guarantee arrangements in accordance with FIN No. 45: Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others , and recorded the fair value of the guarantees and amortized the liability over the guarantee period of one year.  The fee arrangement called for a fee of $50 annually for loans equal to and in excess of $50,000 and $25 annually for loans less than $50,000.  The Company recorded fees totaling $149, for the year ended December 31, 2006, all of which had been received as of that date.  The Company was released from all obligations under this arrangement during 2006.

Agreements Surviving Merger

The property managers were entitled to receive property management fees totaling 4.5% of gross operating income, for management and leasing services through November 15, 2007, the date of the merger.  The Company incurred property management fees of $30,036, $29,800 and $20,686 for the years ended December 31, 2007, 2006 and 2005, respectively.  In addition, the Company reimbursed the property managers for certain salaries and related employee benefits totaling $5,423, $5,313 and $2,268 for the years ended December 31, 2007, 2006 and 2005, respectively.  No amounts remained unpaid as of December 31, 2007 and 2006.  Subsequent to the mergers, the property managers are entitled to receive property management fees totaling 4.5% of gross operating income, for management and leasing services, all of which are eliminated in the consolidated financial statements.

An affiliate also provides investment advisory services to the Company related to the Company’s securities investments for an annual fee.  The affiliate has full discretionary authority with respect to the investment and reinvestment of assets in that account, subject to investment guidelines the Company provides to them.  The affiliates have also been granted a power of attorney and proxy to tender or direct the voting or tendering of all investments held in the account.  The fee is incremental based upon the aggregate market value of assets invested.  Based upon the Company’s assets invested, the fee was equal to 0.75% per annum (paid monthly) of aggregate market value of assets invested.  The Company incurred fees totaling $2,107, $1,961 and $536 for the years ended December 31, 2007, 2006 and 2005, respectively.  As of December 31, 2007 and 2006, $325 and $362, respectively, remained unpaid and are included in ”Accounts payable and accrued expenses” in the accompanying consolidated balance sheets.  The agreement is non-exclusive as to both parties and is cancellable by providing not less than 180 days prior written notice and specification of the effective date of said termination.  

An affiliate provides loan servicing for the Company.  Effective May 1, 2005, the loan servicing agreement stipulated that if the number of loans being serviced exceeded one hundred, a monthly fee was charged in the amount of 190 dollars per month, per loan being serviced.  Effective April 1, 2006, the agreement was amended so that if the number of loans being serviced exceeded one hundred, a monthly fee of 150 dollars per month, per loan was charged.  Effective May 1, 2007, the agreement was again amended so that if the number of loans being serviced exceeds two hundred, a monthly fee of 125 dollars per month, per loan is charged.  Such fees totaled $562, $696 and $534 for the years ended December 31, 2007, 2006 and 2005, respectively.  As of December 31, 2007 and 2006, none and $24, respectively, remained unpaid and are included in “Accounts payable and accrued expenses” in the accompanying consolidated balance sheets.  The



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INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements



agreement is non-exclusive as to both parties and is cancellable by providing not less than 180 days prior written notice and specification of the effective date of such termination.         

An affiliate facilitates the mortgage financing the Company obtains on some of its properties.  The Company pays the affiliate 0.2% of the principal amount of each loan obtained on the Company’s behalf.  Such costs are capitalized as loan fees and amortized over the respective loan term as a component of interest expense.  For the years ended December 31, 2007 and 2006, the Company paid loan fees totaling $873 and $1,051, respectively, to this affiliate.  As of December 31, 2007 and 2006, none remained unpaid.  The agreement is non-exclusive as to both parties and is cancellable by providing not less than 180 days prior written notice and specification of the effective date of such termination.

Agreements Entered Into Upon Consummation of the Merger

The Company terminated its existing acquisition agreement with an Inland affiliate and entered into a new property acquisition agreement and a transition property due diligence services agreement with that affiliate.  In connection with the Company’s acquisition of new properties, the affiliate will give the Company a first right as to all retail, mixed use and single tenant properties and, if requested, provide various services including services to negotiate property acquisition transactions on our behalf and prepare suitability, due diligence, and preliminary and final pro forma analyses of properties proposed to be acquired.  The Company will pay all reasonable, third party out-of-pocket costs incurred by this entity in providing such services; pay an overhead cost reimbursement of $12 per transaction; and, to the extent these services are requested by it, pay a cost of $7 for due diligence expenses and a cost of $25 for negotiation expenses per transaction.  As of December 31, 2007, the Company has not incurred any such costs under the new agreement.  For the year ended December 31, 2007, 2006 and 2005, the Company incurred $134, $363 and $1,184, respectively, of these costs.  Of these costs, $27 and $25 remained unpaid as of December 31, 2007 and 2006, respectively and are included in “Accounts payable and accrued expense” in the accompanying consolidated balance sheets.  The agreement is non-exclusive as to both parties and is cancellable by providing not less than 180 days prior written notice and specification of the effective date of said termination.  

The Company entered into an institutional investor relationships services agreement with an Inland affiliate.  Under the terms of the agreement, the Inland affiliate will attempt to secure institutional investor commitments in exchange for advisory and client fees and reimbursement of project expenses.  For the year ended December 31, 2007, 2006 and 2005, the Company incurred $257, $137 and none, respectively, of these costs.  Of these costs, none and $137 remained unpaid as of December 31, 2007 and 2006, respectively and are included in “Accounts payable and accrued expenses” in the accompanying consolidated balance sheets.  The agreement is non-exclusive as to both parties and is cancellable by providing not less than 180 days prior written notice and specification of the effective date of said termination.  

An Inland affiliate also entered into a legal services agreement with the Company, primarily with its business manager/advisor, where that affiliate will provide it with certain legal services in connection with our real estate business.  The Company will pay the affiliate for legal services rendered under the agreement on the basis of actual time billed by attorneys and paralegals at the affiliate's hourly billing rate then in effect in increments of one-tenth of one hour.  The billing rate is subject to change on an annual basis, provided, however, that the billing rates charged by the affiliate will not be greater than the billing rates charged to any other client and will not be greater than 90% of the billing rate of attorneys of similar experience and position employed by nationally recognized law firms located in Chicago, Illinois performing similar services.  For the year ended December 31, 2007, 2006 and 2005, the Company incurred $897, $705 and $1,884, respectively, of these costs.  Of these costs, $141 and $150 remained unpaid as of December 31, 2007 and 2006, respectively and are included in “Accounts payable and accrued expenses” in the accompanying consolidated balance sheets.  The agreement is non-exclusive as to both parties and is cancellable by providing not less than 180 days prior written notice and specification of the effective date of said termination.  

The Company entered into consulting agreements with Daniel L. Goodwin, Robert D. Parks, the Company’s chairman, and G. Joseph Cosenza, who will each provide it with strategic assistance for the term of their respective agreement including making recommendations and providing guidance to the Company as to prospective investment, financing, acquisition, disposition, development, joint venture and other real estate opportunities contemplated from time to time by



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Notes to Consolidated Financial Statements



it and its board of directors.  The consultants will also provide additional services as may be reasonably requested from time to time by the Company’s board of directors.  The term of each agreement runs until November 15, 2010 unless terminated earlier.  The Company may terminate these consulting agreements at any time.  The consultants will not receive any compensation for their services, but the Company will reimburse their expenses in fulfilling their duties under the consulting agreements.   There were no reimbursements under the consulting agreements in 2007.

The Company entered into amendments to each of its existing service agreements with certain affiliates, including an amendment to its office and facilities management services agreement, insurance and risk management services agreement, computer services agreement, personnel services agreement, property tax services agreement and communications services agreement.  Generally these agreements and the amendments provide that the Company can obtain certain services from the affiliates for reimbursement of their general and administrative costs relating to the Company’s administration and acquisition of properties.  For the year ended December 31, 2007, 2006 and 2005, the Company incurred $3,092, $1,334 and $945, respectively, of these costs.  Of these costs, $900 and $203 remained unpaid as of December 31, 2007 and 2006, respectively and are included in “Accounts payable and accrued expenses” in the accompanying consolidated balance sheets.  The amendments provide that the services provided under the terms of the applicable services agreement are to be provided on a non-exclusive basis in that the Company shall be permitted to employ other parties to perform any one or more of the services and that the applicable counterparty shall be permitted to perform any one or more of the services to other parties.  The agreement and related amendments have various expiration dates but are cancellable by providing not less than 180 days prior written notice and specification of the effective date of such termination.  

The Company sub leases its office space from an affiliate.  The lease calls for annual base rent of $496 and additional rent in any calendar year of its proportionate share of taxes and common area maintenance costs.  Additionally, the affiliate paid certain tenant improvements under the lease in the amount of $395.  Such improvements are being repaid by the Company over a period of five years.  The sublease calls for an initial term of five years which expires November 2012 with one option to extend for an additional five years.

(5)  Marketable Securities

Investment in marketable securities of $240,493 and $281,262 at December 31, 2007 and 2006, respectively, consists of preferred and common stock investments and debt securities which are classified as available-for-sale securities and recorded at fair value.  Unrealized holding gains and losses on available-for-sale securities are excluded from earnings and reported as a separate component of other comprehensive income until realized.  Of the investment securities held on December 31, 2007 and 2006, the Company had accumulated other comprehensive losses of $47,607 and gains of $1,390, respectively.  Net unrealized gains (losses) were equal to $(48,997), $2,553 and $(1,404) for the years ended December 31, 2007, 2006 and 2005, respectively.  Realized gains and losses from the sale of available-for-sale securities are determined on a specific identification basis.  During the years ended December 31, 2007, 2006 and 2005, we realized gains (losses) of $(19,967), $416 and $1 on the sales of securities.  Dividend income is recognized when earned.  During the years ended December 31, 2007, 2006 and 2005, dividend income of $23,729, $37,501 and $7,561, respectively, was earned on marketable securities and is included within “Dividend income” on the accompanying consolidated statements of operations.  As of December 30, 2007 and 2006, $2,856 and $2,235 of dividend income remained unpaid, respectively, and is included in “Other assets” on the accompanying consolidated balance sheets.

Gross unrealized losses on marketable securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2007 were as follows:



70


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements



  [IWEST10K123107FINAL036.GIF]

The table includes 98 security positions which were at an unrealized loss position at December 31, 2007.

The Company purchased a portion of its securities through a margin account. As of December 31, 2007 and 2006, the Company had recorded a payable of $108,040 and $78, respectively, for securities purchased on margin.  This debt bears variable interest rates ranging between the London InterBank Offered Rate ("LIBOR") plus 25 basis points and LIBOR plus 50 basis points.  At December 31, 2007, these rates were equal to a range between 4.85% and 5.10%.  Interest expense on this debt in the amount of $3,481 and $6,078 was recognized within interest expense on the accompanying consolidated statements of operations for the years ended December 31, 2007 and 2006, respectively.  This debt is due upon demand.  The value of the Company’s marketable securities at December 31, 2007 and 2006 serves as collateral for this debt.

(6)  Stock Option Plan

The Company has adopted an Independent Director Stock Option Plan (the "Plan") which, subject to certain conditions, provides for the grant to each independent director of options to acquire shares following their becoming a director and for the grant of additional options to acquire shares on the date of each annual stockholders’ meeting. The options for the initial shares are all currently exercisable.  The subsequent options are exercisable on the second anniversary of the date of grant. The initial options are exercisable at $8.95 per share. The subsequent options are exercisable at the fair market value of a share on the last business day preceding the annual meeting of stockholders as determined under the Plan. As of December 31, 2007 and 2006, there had been a total of 23 options issued, none of which had been exercised or expired.

The Company calculates the per share weighted average fair value of options granted on the date of the grant using the Black Scholes option pricing model utilizing certain assumptions regarding the expected dividend yield, risk free interest rate, expected life and expected volatility rate.  Expense of $2 related to stock options was recorded during each of the years ended December 31, 2007, 2006 and 2005.

(7) Leases

Master Lease Agreements

In conjunction with certain acquisitions, the Company receives payments under master lease agreements pertaining to certain non-revenue producing spaces at the time of purchase for periods generally ranging from three months to three years after the date of purchase or until the spaces are leased.  As these payments are received, they are recorded as a reduction in the purchase price of the respective property rather than as rental income.  The cumulative amount of such payments was $22,279, $17,488 and $9,829 as of December 31, 2007, 2006 and 2005, respectively.

Operating Leases

The majority of the revenues from the Company's properties consist of rents received under long-term operating leases.  Some leases provide for the payment of fixed base rent paid monthly in advance, and for the reimbursement by tenants to the Company for the tenant's pro rata share of certain operating expenses including real estate taxes, special assessments, insurance, utilities, common area maintenance, management fees, and certain building repairs paid by the landlord and recoverable under the terms of the lease.  Under these leases, the landlord pays all expenses and is reimbursed by the



71


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements



tenant for the tenant's pro rata share of recoverable expenses paid.  Certain other tenants are subject to net leases which provide that the tenant is responsible for fixed based rent as well as all costs and expenses associated with occupancy.  Under net leases where all expenses are paid directly by the tenant rather than the landlord, such expenses are not included in the accompanying consolidated statements of operations.  Under net leases where all expenses are paid by the landlord, subject to reimbursement by the tenant, the expenses are included within property operating expenses and reimbursements are included in tenant recovery income in the accompanying consolidated statements of operations.

In certain municipalities, the Company is required to remit sales taxes to governmental authorities based upon the rental income received from properties in those regions.  These taxes may be reimbursed by the tenant to the Company depending upon the terms of applicable tenant lease.  As with other recoverable expenses, the presentation of the remittance and reimbursement of these taxes is on a gross basis whereby sales tax expenses are included within property operating expenses and sales tax reimbursements are included within other property income on the consolidated statements of operations.  Such taxes remitted to governmental authorities and reimbursed by tenants were $2,820, $2,661 and $2,087 for the years ended December 31, 2007, 2006 and 2005, respectively.

A lease termination by a major tenant could result in lease terminations or reductions in rent by other tenants whose leases permit cancellation or rent reduction if a major tenant's lease is terminated.  In certain properties where there are large tenants, other tenants may require that if certain large tenants or "shadow" tenants discontinue operations, a right of termination or reduced rent may exist under the tenants’ leases.

Minimum lease payments to be received under operating leases, excluding payments under master lease agreements and assuming no expiring leases are renewed, are as follows:

 

Minimum Lease

 

Payments

2008

$

560,738

 

2009

 

536,446

 

2010

 

506,732

 

2011

 

473,901

 

2012

 

436,853

 

Thereafter

 

2,647,897

 

Total

$

5,162,567

 

The remaining lease terms range from one year to 25 years.

Ground Leases

The Company leases land under non-cancelable operating leases at certain of the properties expiring in various years from 2018 to 2105. For the years ended December 31, 2007, 2006 and 2005, ground lease rent expense was $9,445, $9,085 and $7,679, respectively.  Minimum future rental payments to be paid under the ground leases are as follows:

 

Minimum Lease

 

Payments

2008

$

5,583

 

2009

 

5,809

 

2010

 

5,818

 

2011

 

5,997

 

2012

 

6,122

 

Thereafter

 

529,715

 

Total

$

559,044

 



72


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements





(8)  Notes Receivable

The Company has provided mortgage and development financing to third-parties.  These entities are considered variable interest entities under FIN 46(R); however, the Company believes it is not the primary beneficiary of any of the entities and accordingly, the Company does not consolidate them.

The following table summarizes the Company's notes receivable at December 31, 2007 and 2006:

 

 

Balance

Notes

Interest Rates

Maturity Dates

Secured By

 

Maximum Funding Commitment

December 31, 2007

 

 

 

 

 

 

 

 

Construction Loans   Receivable

$

   26,418

3

7.48 %, 7.00%, and 8.65 %

03/08, 10/08 and 02/09

First Mortgage

$

   36,180

Other Installment Notes

 

7,383

4

5.00%, 6.25%, 10.00% and 8.00%

06/09, 05/10, 02/48 and 05/17

N/A

 

7,390

 

$

   33,801

 

 

 

 

$

   43,570

 

 

 

 

 

 

 

 

 

December 31, 2006

 

 

 

 

 

 

 

 

Mortgage Notes Receivable

$

     6,995

1

6.75%

10/07

First Mortgage

$

     7,324

Construction Loans   Receivable

 

105,410

3

7.00%, 7.48% and 8.50%

05/07, 10/07 and 05/08

First Mortgage

 

136,830

Other Installment Notes

 

17,500

2

5.00% and 10.00%

12/07 and 02/48

N/A

 

17,500

 

$

 129,905

 

 

 

 

$

  161,654

(9)  Mortgages and Note Payable

Mortgages Payable

Mortgage loans outstanding as of December 31, 2007 were $4,112,645 and had a weighted average interest rate of 4.97%.  Of this amount, $3,933,559 had fixed rates ranging from 3.99% to 7.48% and a weighted average fixed rate of 4.91% at December 31, 2007.  Excluding the mortgage debt assumed from sellers at acquisition and debt of consolidated joint venture investments, the highest fixed rate on the Company’s mortgage debt was 5.94%.  The remaining $179,086 of mortgage debt represented variable rate loans with a weighted average interest rate of 6.29% at December 31, 2007.  Properties with a net carrying value of $6,133,653 at December 31, 2007 and related tenant leases are pledged as collateral.  As of December 31, 2007, scheduled maturities for the Company's outstanding mortgage indebtedness had various due dates through March 1, 2037.

Mortgage loans outstanding as of December 31, 2006 were $4,312,463 and had a weighted average interest rate of 4.94%.  Of this amount, $3,943,433 had fixed rates ranging from 3.96% to 8.02% and a weighted average fixed rate of 4.82% at December 31, 2006.  Excluding the mortgage debt assumed from sellers at acquisition and debt of consolidated joint venture investments, the highest fixed rate on the Company’s mortgage debt was 5.86%.  The remaining $369,030 of mortgage debt represented variable rate loans with a weighted average interest rate of 6.26% at December 31, 2006.  Properties with a net carrying value of $6,633,886 at December 31, 2006 and related tenant leases are pledged as collateral.  As of December 31, 2006, scheduled maturities for the Company's outstanding mortgage indebtedness had various due dates through December 2035.

The majority of the Company's mortgage loans require monthly payments of interest only, although some loans require principal and interest payments, as well as reserves for taxes, insurance, and certain other costs.  Although the loans placed by the Company are generally non-recourse, occasionally, when it is deemed to be advantageous, the Company may guarantee all or a portion of the debt on a full-recourse basis. The Company guarantees a percentage of the construction loans on three of its consolidated development joint ventures. These guarantees earn a fee of approximately 1% of the loan amount and are released upon certain pre-leasing requirements.



73


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements



At times, the Company has borrowed funds financed as part of a cross-collateralized package, with cross-default provisions, in order to enhance the financial benefits.  In those circumstances, one or more of the properties may secure the debt of another of the Company's properties.

Margin Payable

The Company purchased a portion of its securities through a margin account. As of December 31, 2007 and 2006, the Company had recorded a payable of $108,040 and $78, respectively, for securities purchased on margin.  This debt bears variable interest rates ranging between LIBOR plus 25 basis points and LIBOR plus 50 basis points. At December 31, 2007, these rates were equal to a range between 4.85% and 5.10%. This debt is due upon demand.  The value of the Company's marketable securities serves as collateral for this debt.

Debt Maturity

The following table shows mortgage debt and notes payable maturities during the next five years:

 

2008

2009

2010

2011

2012

Thereafter

Maturing debt:

 

 

 

 

 

 

  Fixed rate debt

$  108,942

911,920

1,287,829

420,970

380,677

873,696

  Variable rate debt

205,406

156,720

- 

- 

- 

- 

Weighted average   interest rate on debt:

 

 

 

 

 

 

  Fixed rate debt

4.77%

4.70%

4.77%

4.91%

5.30%

5.17%

  Variable rate debt

5.56%

6.24%

- 

- 

- 

- 

 

 

 

 

 

 

 

The maturity table excludes other financing obligations as described in Note 1.

( 10)  Line of Credit

On October 15, 2007, the Company entered into an unsecured line of credit arrangement with a bank for up to $225,000, expandable to $300,000.  The facility has an initial term of three years with one-year extension option.  Funds from this line of credit were used to fund a construction loan receivable and to provide liquidity from the time a property was purchased until permanent debt was placed on the property.   The line of credit requires interest-only payments monthly at the rate equal to LIBOR plus 80 to 125 basis points depending on our net worth to total recourse indebtedness.   The Company is also required to pay, on a quarterly basis, fees ranging from 0.125% to 0.2% depending on the undrawn amount, on the average daily undrawn funds under this line.  The line of credit requires compliance with certain covenants, such as debt service ratios, minimum net worth requirements, distribution limitations and investment restrictions.  As of December 31, 2007, the Company was in compliance with such covenants.  The outstanding balance on the line of credit was $75,000 as of December 31, 2007 with an effective interest rate of 6.05% per annum.

The Company terminated its previous unsecured line of credit facility in December 2006.  The facility, obtained in 2004, had an unsecured borrowing capacity of $250,000.  During its existence, funds from the line of credit were used, from time to time, to provide liquidity from the time a property was purchased until permanent debt was placed on the property.  The line of credit required interest-only payments monthly on drawn funds at a rate equal to LIBOR plus up to 190 basis points depending on the Company's leverage ratio.  The Company was also required to pay, on a quarterly basis, an amount ranging from 0.15% to 0.25% per annum on the average daily undrawn funds on the line.  The agreement also required compliance with certain covenants, such as debt service ratios, minimum net worth requirements, distribution limitations and investment restrictions.  The Company was in compliance with such covenants throughout the facility’s existence.



74


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements



(11)  Investment in Unconsolidated Joint Ventures

Effective April 27, 2007, the Company formed a strategic joint venture with a large state pension fund (the “institutional investor”).  The purpose of the joint venture is to acquire and manage targeted retail properties in major metropolitan areas of the United States.  Upon formation, the joint venture initially acquired seven neighborhood retail and community centers, which were contributed to the joint venture by the Company, with an estimated fair value of approximately $336,000 and net equity value after debt assumption of approximately $147,000.  Under the terms of the joint venture operating agreement, the institutional investor contributed 80%, or approximately $117,800 of the equity necessary to purchase the properties.  Accordingly, under the terms of the agreement the profits and losses of the joint venture are split 80% and 20% between the institutional investor and the Company, respectively, except for the interest earned on the initial invested funds, of which the Company is allocated 95%.  The Company’s share of profits and losses of the joint venture for the year ended December 31, 2007 was $2,229.  The Company received net operating cash distributions from the joint venture totaling $650 for the year ended December 31, 2007.  During the second quarter of 2007, the Company borrowed $50,000 from the joint venture at an annual interest rate of 4.80% and is reflected in “Mortgages and notes payable” on the consolidated balance sheet.

The operations of the seven contributed properties are not recorded as discontinued operations because of the Company’s continuing involvement with these shopping centers.  The Company determined that the venture is not a variable interest entity and accounts for its interest in the venture using the equity method of accounting as it has significant influence over, but not control of, the major operating and financial policies of the joint venture.  Under the equity method of accounting, the net equity investment of the Company is reflected on the accompanying consolidated balance sheets and the accompanying consolidated statements of operations includes the Company’s share of net income or loss from the unconsolidated joint venture.  The Company recognized a gain of $11,749 on the contribution of the seven investment properties to the joint venture in the second quarter of 2007.  The gain resulted from a difference between the fair value and the Company’s carrying value of the contributed assets and was recognized to the extent of the outside interest in the joint venture, net of the Company’s commitment to fund additional capital contributions.  The amount of proceeds not recognized in the computation of the gain was based on the Company’s continuing involvement in the contributed property.  In addition, the Company recognized a gain of $2,486 related to the extinguishment of mortgage debt on the seven investment properties contributed to the joint venture.  The gain resulted from the difference between the fair value and the Company’s carrying value of the debt assumed by the joint venture and was calculated net of the write-off of deferred financing costs.  

The difference between the Company’s investment in the joint venture and the amount of the underlying equity in net assets of the joint venture is due to basis differences resulting from the Company’s contribution of property assets at its historical net book value versus the fair value of the contributed properties.  Such differences are amortized over the depreciable lives of the joint venture’s property assets.  The Company recorded $214 of amortization of this basis difference in 2007.  As of December 31, 2007, the Company’s net investment in the joint venture was $82,358.

The joint venture currently anticipates acquiring up to an additional $664,000 of neighborhood, community and power centers located in the targeted areas within the United States by agreement over the remaining investment period, as defined.  The joint venture will acquire assets using leverage, consistent with its existing business plan, of approximately 50% of the original purchase price, or current market value if higher.  The Company is the managing member of the joint venture and earns fees for providing property management, acquisition and leasing services to the joint venture.



75


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements



The following table summarizes the Company's investments in unconsolidated joint ventures:

 

 

Date of

Date of

Ownership Interest at December 31,

 

Investment at
December 31,

Property

Location

Investment

Redemption

2007

2006

 

2007

 

2006

Courthouse Square
   Apartments (1)

Towson, MD

08/11/2004

03/01/2007

0.00%

36.50%

$

-   

$

4,345

The Power Plant (1)

Baltimore, MD

11/05/2004

12/31/2007

0.00%

50.00%

 

-   

 

13,222

Pier IV (1)

Baltimore, MD

11/05/2004

12/31/2007

0.00%

66.67%

 

-   

 

18,655

Louisville Galleria (1)

Louisville, KY

12/29/2004

12/31/2007

0.00%

47.10%

 

-   

 

25,047

Ocean City Factory Outlets (1)

Ocean City, MD

12/23/2005

12/31/2007

0.00%

41.18%

 

-   

 

12,823

Preston Trail Village

Dallas, TX

02/28/2006

N/A

78.95%

78.95%

 

2,487

 

2,908

Doncaster Village and Padonia
   Village Apartments (1)

Parkville and   Timonium, MD

05/03/2006

03/01/2007

0.00%

28.00%

 

-   

 

6,645

San Gorgonio Village

Beaumont, CA

03/30/2007

N/A

99.52%

N/A

 

5,399

 

-   

Kansas City Live (1)

Kansas City, MO

06/07/2007

12/31/2007

34.73%

N/A

 

-   

 

-   

Former grocery redevelopment

Denver, CO Area

08/31/2007

N/A

96.30%

N/A

 

15,693

 

-   

MS Inland

Various

04/27/2007

N/A

20.00%

N/A

 

82,358

 

-  

 

 

 

 

 

 

$

105,937

$

83,645

 

 

 

 

 

 

 

 

 

 

(1)

These investments were considered restricted because the Company’s joint venture partner was entitled to virtually all of the economic benefits of the investments.  Since the Company has a subordinated position in the economic benefits of these assets, all equity in earnings of these unconsolidated entities for the years ended December 31, 2007, 2006 and 2005 were allocated to the Company's joint venture partners in accordance with the joint venture operating agreements.

These investments are accounted for using the equity method of accounting.  Under the equity method of accounting, the net equity investment of the Company is reflected on the accompanying consolidated balance sheets and the accompanying consolidated statements of operations includes the Company's share of net income or loss from the unconsolidated entity.  Distributions from these investments that are related to income from operations are included as operating activities and distributions that are related to capital transactions are included in investing activities in the Company’s consolidated statement of cash flows.

The ownership percentage associated with San Gorgonio Village is based upon the estimated projected cost to complete the development project and is subject to change based upon actual completion costs.  The construction loan associated with the project is guaranteed by the Company’s joint venture partner and therefore, the joint venture partner bears the greatest risk of loss related to the venture.

(12)  Segment Reporting

The Company owns multi-tenant shopping centers and single-user net lease properties across the United States.  The Company’s shopping centers are typically anchored by credit tenants, discount retailers, home improvement retailers, grocery and drug stores complemented with additional stores providing a wide range of other goods and services to shoppers.

The Company assesses and measures operating results of its properties based on net property operations.  Management internally evaluates the operating performance of the properties as a whole and does not differentiate properties by geography, size or type.  In accordance with the provisions of SFAS No. 131: Disclosure about Segments of an Enterprise and Related Information , each of the Company’s investment properties are considered a separate operating segment.  However, under the aggregation criteria of SFAS No. 131 and as clarified in EITF Issue No. 14-10: Determining Whether to Aggregate Operating Segments that Do Not Meet the Quantitative Thresholds , the Company’s properties are considered one reportable segment.



76


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements



Net property operations are summarized in the following table for the years ended December 31 2007, 2006 and 2005.

[IWEST10K123107FINAL038.GIF]



77


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements



(13)  Earnings per Share

Basic earnings per share ("EPS") are computed by dividing net income by the weighted average number of common shares outstanding for the period (the "common shares").  Diluted EPS is computed by dividing net income by the common shares plus shares issuable upon exercising options or other contracts.  As of December 31, 2007 and 2006, options to purchase 23 shares of common stock at an exercise price of $8.95 per share were outstanding.  These options to purchase shares were not included in the computation of basic or diluted EPS as the effect would be immaterial.

The basic and diluted weighted average number of common shares outstanding was 454,287, 441,816 and 350,644 for the years ended December 31, 2007, 2006 and 2005, respectively.

(14)  Income Taxes

The Company made an election to qualify, and believes it is operating so as to qualify as a REIT for federal income tax purposes.  Accordingly, the Company generally will not be subject to federal income tax, provided that distributions to its shareholders equal at least the amount of its REIT taxable income as defined under Sections 856 through 860 of the Code.

The Company has one wholly-owned subsidiary that has elected to be treated as a taxable REIT subsidiary (“TRS”) for federal income tax purposes. A TRS is taxed on its net income at corporate tax rates.  Approximate income tax expense incurred as a result of the TRS was $4 and $117 for the years ended December 31, 2007 and 2006.  

Deferred income taxes are accounted for under the asset and liability method.  Deferred tax assets and liabilities are recognized for the estimated future consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis.  Deferred tax assets and liabilities are measured using enacted tax rules in effect for the year in which these temporary differences are expected to be recovered or settled.   

Distributions declared on the Company's common stock and their tax status are presented in the following table.  The tax status of the Company's dividends in 2007, 2006, and 2005 may not be indicative of future periods.

 

 

 Distributions declared per

 

Return

 

Ordinary

Year

 

common share

 

of capital

 

Income

2007

 

$  0.64

 

$  0.33

 

$  0.31

2006

 

0.64

 

0.35

 

0.29

2005

 

0.64

 

0.29

 

0.35

 

 

 

 


 


The Company adopted the provisions of FIN No. 48: Accounting for Uncertainty in Income Taxes – an interpretation of SFAS No. 109 on January 1, 2007.  FIN 48 defines a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  The Interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.  Adoption of FIN 48 did not have a material effect on the Company’s accompanying consolidated financial statements.

The Company had no unrecognized tax benefits as of the January 1, 2007 adoption date or as of December 31, 2007.  The Company expects no significant increases or decreases in unrecognized tax benefits due to changes in tax positions within one year of December 31, 2007.  The Company has no interest or penalties relating to income taxes recognized in the statement of operations for the year ended December 31, 2007, or in the balance sheet as of December 31, 2007.  As of December 31, 2007, returns for the calendar years 2003 through 2006 remain subject to examination by Federal and various state tax jurisdictions.



78


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements



(15)  Provision for Asset Impairment

During the first quarter of 2007, the Company recorded an asset impairment of $13,560 related to an approximately 287 square foot, multi-tenant retail property located in University Heights, Ohio.  Having identified certain indicators of impairment such as the property’s low occupancy rate, difficulty in leasing space and financially troubled tenants, the Company performed a cash flow valuation analysis and determined that the carrying value of the property exceeded its undiscounted cash flows based upon a revised holding period for the asset.  Therefore, the Company has recorded an impairment loss related to this property to its estimated fair value within the accompanying consolidated statement of operations.

(16)  Commitments and Contingencies

The Company has acquired several properties which have earnout components, meaning the Company did not pay for portions of these properties that were not rent producing at the time of acquisition.  The Company is obligated, under certain agreements, to pay for those portions when a tenant moves into its space and begins to pay rent.  The earnout payments are based on a predetermined formula. Each earnout agreement has a time limit regarding the obligation to pay any additional monies.  The time limits generally range from one to three years.  If, at the end of the time period allowed, certain space has not been leased and occupied, the Company will own that space without any further payment obligation to the seller.  Based on pro-forma leasing rates, the Company may pay as much as $148,222 in the future as retail space covered by earnout agreements is occupied and becomes rent producing.

The Company has entered into three construction loan agreements and four other installment note agreements in which the Company has committed to fund up to a total of $43,570.  Each loan, except one, requires monthly interest payments with the entire principal balance due at maturity.  The combined receivable balance at December 31, 2007 was $33,801.  Therefore, the Company may be required to fund up to an additional $9,655 on these loans

The Company guarantees a portion of the construction debt associated with certain of its development joint ventures.  The guarantees are released as certain leasing parameters are met.  As of December 31, 2007, the amount guaranteed by the Company was $5,471.

As of December 31, 2007, the Company had 13 irrevocable letters of credit outstanding related to loan fundings against earnout spaces at certain properties.  Once the Company pays the remaining portion of the purchase price for these properties and meets certain occupancy requirements, the letters of credit will be released.  The balance of outstanding letters of credit at December 31, 2007 was $22,063.

The Company has entered into interest rate lock agreements with a lender to secure interest rates on mortgage debt on properties it currently owns or plans to purchase in the future.  As of December 31, 2007, the Company had an outstanding rate lock deposit of $9,450 for agreements locking only the Treasury portion of mortgage debt interest rates.  These agreements lock the Treasury portion of rates at 4.63% and 4.51% on $135,000 in positions that can be converted into full rate locks through the first quarter of 2008, or can be extended.  Allocations to these agreements will be made upon conversion into a full rate lock.

The Company's decision to acquire a property will generally depend upon no material adverse change occurring relating to the property, the tenants or in the local economic conditions and the Company's receipt of satisfactory due diligence information including appraisals, environmental reports and lease information prior to purchasing the property.  As of December 31, 2007, the Company was considering the acquisition of a property known as Jefferson Commons in Newport News, VA, and the property was subsequently acquired by the Company for a purchase price of $79,644 on February 14, 2008.  



79


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements



(17)  Litigation

On November 1, 2007, City of St. Clair Shores General Employees Retirement System filed a class action complaint in the United States District Court for the Northern District of Illinois alleging violations of the federal securities laws and common law causes of action in connection with the Company’s merger with its business manager/advisor and property managers as reflected in the Company’s Proxy Statement dated September 10, 2007 (the “Proxy Statement”).  The complaint alleges, among other things, (i) that the consideration paid as part of the merger was excessive; (ii) violations of Section 14(a), including Rule 14a-9 thereunder, and Section 20(a) of the Exchange Act, based upon allegations that the proxy statement contains false and misleading statements or omits to state material facts; (iii) that the business manager/advisor and property managers and certain directors and defendants breached their fiduciary duties to the class; and (iv) that the merger unjustly enriched the business manager/advisor and property managers.

The complaint seeks, among other things, (i) certification of the class action; (ii) a judgment declaring the proxy statement false and misleading; (iii) unspecified monetary damages; (iv) to nullify any stockholder approvals obtained during the proxy process; (v) nullification of the merger and the related merger agreements with the business manager/advisor and the property managers; and (viii) the payment of reasonable attorneys’ fees and experts’ fees.

The Company believes that the allegations in the complaint are wholly without merit, and intends to vigorously defend the lawsuit.

(18)  Subsequent Events

During the period from January 1 to March 28, 2008, the Company:

·

Issued 3,965 shares of common stock through the DRP and repurchased 5,177 shares of common stock through the SRP resulting in a total of 483,710 shares of common stock outstanding at March 28, 2008;

·

Paid distributions of $77,804 to stockholders in January, February and March 2008, for December 2007 and January and February 2008, respectively.  The distribution represented an annualized distribution rate of $0.64 per share;

·

Acquired a shopping center know as Jefferson Commons, located in Newport News, VA, for purchase price of $79,644 with 306,287 square feet and assumption of mortgage debt with a principal balance of $56,500;

·

Funded earnouts totaling $38,747 to purchase an additional 130 square feet at eleven existing properties;

·

Funded a $2,466 construction loan and paid off one $5,951 construction loan receivables;

·

Funded additional capital of $2,911 on three development joint ventures, and deposited $900 on a new development joint venture;

·

Funded $3,265 on two construction-in-progress projects;

·

Deposited $5,400 of margin calls related to Treasury lock agreements; and

·

Borrowed $50,000 from the line of credit.

The Company’s board of directors approved the following, effective January 1, 2008:

·

Each non-affiliated director will be entitled to be granted an option to acquire 5 shares of the Company’s common stock as of the date they initially become a director under the Company’s Independent Director Stock Option Plan. In addition, each non-affiliated director will be entitled to be granted an option to acquire an additional 5 shares on the date of each annual stockholders’ meeting, commencing with the annual meeting in 2008, so long as the director remains a member of the board of directors on such date. All options will be granted at fair market value on the date of grant, and will become fully exercisable on the second anniversary of the date of grant.

·

The addition of Messrs Richard P. Imperiale and Kenneth E. Masick to the Company’s board of directors.



80


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements



(19)  Quarterly Financial Information (unaudited)

  [IWEST10K123107FINAL040.GIF]

[IWEST10K123107FINAL042.GIF]

The quarterly financial information presented above for the quarters ended March 31, June 30 and September 30, 2006 has been adjusted from the information previously presented in the Company’s quarterly reports. These quarterly adjustments were identified in the fourth quarter of 2006 upon the Company’s adoption of SAB 108 (refer to Note 2). The effect of these adjustments is not considered material to the results of operations of each respective quarter.



81


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.


Schedule II

Valuation and Qualifying Accounts
For the years ended December 31, 2007, 2006 and 2005

(Dollar amounts in thousands)



  [IWEST10K123107FINAL044.GIF]





82


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC .

Schedule III

Real Estate and Accumulated Depreciation
December 31, 2007






 

 

 

 

 

Initial Cost (A)

 

Gross amount carried at end of period

 

 

 

 

 

 

 

 

 

 

Buildings and

Adjustments

 

Buildings and

 

 

 

Accumulated

Date

Date

 

Encumbrance

 

Land

Improvements

to Basis ( C )

Land

Improvements

Total (B) (D)

Depreciation (E)

Constructed

Acquired

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23rd Street Plaza

 

 3,990

 

 

 1,300

 

 5,319

 

 

 78

 

 1,300

 

 5,397

 

 

 6,697

 

 

 597

 

 2003

12/04

  Panama City, FL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Academy Sports

 

 2,920

 

 

 1,230

 

 3,752

 

 

  -   

 

 1,230

 

 3,752

 

 

 4,982

 

 

 470

 

 2004

07/04

  Houma, LA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Academy Sports

 

 2,338

 

 

 1,340

 

 2,943

 

 

 3

 

 1,340

 

 2,946

 

 

 4,286

 

 

 342

 

 2004

10/04

  Midland, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Academy Sports

 

 2,775

 

 

 1,050

 

 3,954

 

 

 6

 

 1,050

 

 3,960

 

 

 5,010

 

 

 460

 

 2004

10/04

  Port Arthur, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Academy Sports

 

 3,933

 

 

 3,215

 

 3,963

 

 

  -   

 

 3,215

 

 3,963

 

 

 7,178

 

 

 424

 

 2004

01/05

  San Antonio, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alison's Corner

 

 3,850

 

 

 1,045

 

 5,700

 

 

 78

 

 1,045

 

 5,778

 

 

 6,823

 

 

 776

 

 2003

04/04

  San Antonio, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

American Express

 

 11,623

 

 

 1,400

 

 15,370

 

 

 9

 

 1,400

 

 15,379

 

 

 16,779

 

 

 1,615

 

 2000

12/04

  DePere, WI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

American Express

 

 33,040

 

 

 2,800

 

 49,470

 

 

 8

 

 2,800

 

 49,478

 

 

 52,278

 

 

 5,197

 

 1986

12/04

  Greensboro, NC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

American Express  

 

 8,260

 

 

 2,900

 

 10,170

 

 

 8

 

 2,900

 

 10,178

 

 

 13,078

 

 

 1,069

 

 1983

12/04

  19th Ave., Phoenix, AZ

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

American Express

 

 30,149

 

 

 8,200

 

 36,692

 

 

  -   

 

 8,200

 

 36,692

 

 

 44,892

 

 

 3,531

 

 1982

03/05

  Taylorsville, UT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Arvada Connection &

 

 28,510

 

 

 8,125

 

 39,381

 

 

 670

 

 8,125

 

 40,051

 

 

 48,176

 

 

 5,602

 

 1987-1990

04/04

  Marketplace, Arvada, CO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ashland & Roosevelt

 

 14,912

 

 

  -   

 

 21,127

 

 

 433

 

  -   

 

 21,560

 

 

 21,560

 

 

 2,083

 

 2002

05/05

  Chicago, IL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Azalea Square I – III
 Summerville, SC

 

 25,238

 

 

 9,655

 

 31,652

 

 

 220

 

 9,655

 

 31,872

 

 

 41,527

 

 

 2,578

 

2004 & 2007

10/04 & 10/07

Bangor Parkade

 

 17,250

 

 

 11,600

 

 13,539

 

 

 3,994

 

 11,600

 

 17,533

 

 

 29,133

 

 

 1,008

 

 2005

03/06

  Bangor, ME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Battle Ridge Pavilion

 

 10,347

 

 

 4,350

 

 11,366

 

 

 (87)

 

 4,350

 

 11,279

 

 

 15,629

 

 

 694

 

 1999

05/06

  Marietta, GA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beachway Plaza

 

 10,235

 

 

 5,460

 

 10,397

 

 

 210

 

 5,460

 

 10,607

 

 

 16,067

 

 

 994

 

1984 / 2004

06/05

  Bradenton, Florida

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bear Creek

 

 11,450

 

 

 3,300

 

 14,477

 

 

 70

 

 3,300

 

 14,547

 

 

 17,847

 

 

 1,420

 

 2002

04/05

  Houston, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bed Bath & Beyond Plaza

 

 11,193

 

 

  -   

 

 18,367

 

 

 25

 

  -   

 

 18,392

 

 

 18,392

 

 

 2,190

 

 2004

10/04

  Miami, FL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



83


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC .

Schedule III

Real Estate and Accumulated Depreciation
December 31, 2007






Bed Bath & Beyond Plaza

 

 10,550

 

 

 4,530

 

 11,901

 

 

  -   

 

 4,530

 

 11,901

 

 

 16,431

 

 

 1,054

 

 2000-2002

07/05

  Westbury, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Best on the Boulevard

 

 19,525

 

 

 7,460

 

 25,583

 

 

 55

 

 7,460

 

 25,638

 

 

 33,098

 

 

 3,534

 

 1996-1999

04/04

  Las Vegas, NV

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bison Hollow

 

 10,774

 

 

 5,550

 

 12,324

 

 

 (18)

 

 5,550

 

 12,306

 

 

 17,856

 

 

 1,204

 

 2004

04/05

  Traverse City, MI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blockbuster at Five Forks

 

 825

 

 

 440

 

 1,018

 

 

  -   

 

 440

 

 1,018

 

 

 1,458

 

 

 103

 

 2004-2005

03/05

  Simpsonville, SC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bluebonnet Parc

 

 12,100

 

 

 4,450

 

 16,407

 

 

 227

 

 4,450

 

 16,634

 

 

 21,084

 

 

 2,244

 

 2002

04/04

  Baton Rouge, LA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Boston Commons

 

 9,511

 

 

 3,750

 

 9,690

 

 

 68

 

 3,750

 

 9,758

 

 

 13,508

 

 

 931

 

 1993

05/05

  Springfield, MA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Boulevard at The Capital

 

 71,500

 

 

  -   

 

 114,703

 

 

 5,321

 

  -   

 

 120,024

 

 

 120,024

 

 

 14,546

 

 2004

09/04

  Center, Largo, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Boulevard Plaza

 

 6,300

 

 

 4,170

 

 12,038

 

 

 271

 

 4,170

 

 12,309

 

 

 16,479

 

 

 1,186

 

 1994

04/05

  Pawtucket, RI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Brickyard

 

  -   

 

 

 45,300

 

 26,657

 

 

 3,540

 

 45,300

 

 30,197

 

 

 75,497

 

 

 2,931

 

1977 / 2004

04/05

  Chicago, IL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Broadway Shopping Center
 Bangor, ME

 

 8,379

 

 

 5,500

 

 14,002

 

 

 476

 

 5,500

 

 14,478

 

 

 19,978

 

 

 1,173

 

1960/1999-2000

09/05

Brown's Lane

 

 6,284

 

 

 2,600

 

 12,005

 

 

 93

 

 2,600

 

 12,098

 

 

 14,698

 

 

 1,179

 

 1985

04/05

  Middletown, RI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carmax - San Antonio

 

 8,030

 

 

 6,210

 

 7,731

 

 

  -   

 

 6,210

 

 7,731

 

 

 13,941

 

 

 803

 

 1998

03/05

  San Antonio, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carrier Towne Crossing

 

 10,992

 

 

 2,750

 

 13,662

 

 

 751

 

 2,750

 

 14,413

 

 

 17,163

 

 

 1,093

 

 1998

12/05

  Grand Prairie, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Central Texas Marketplace

 

 45,386

 

 

 13,000

 

 47,559

 

 

 3,651

 

 13,000

 

 51,210

 

 

 64,210

 

 

 1,790

 

 2004

12/06

  Waco, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Centre at Laurel

 

 27,200

 

 

 19,000

 

 8,406

 

 

 16,316

 

 19,000

 

 24,722

 

 

 43,722

 

 

 1,353

 

 2005

02/06

  Laurel, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Century III Plaza

 

 26,200

 

 

 7,100

 

 33,212

 

 

  -   

 

 7,100

 

 33,212

 

 

 40,312

 

 

 3,043

 

 1996

06/05

  West Mifflin, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chantilly Crossing

 

 15,675

 

 

 8,500

 

 16,060

 

 

 2,008

 

 8,500

 

 18,068

 

 

 26,568

 

 

 1,582

 

 2004

05/05

  Chantilly, VA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cinemark Seven Bridges

 

 7,800

 

 

 3,450

 

 11,728

 

 

  -   

 

 3,450

 

 11,728

 

 

 15,178

 

 

 1,129

 

 2000

03/05

  Woodridge,  IL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Circuit City

 

 31,270

 

 

 3,000

 

 47,815

 

 

  -   

 

 3,000

 

 47,815

 

 

 50,815

 

 

 4,463

 

 1997

05/05

  Richmond, VA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



84


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC .

Schedule III

Real Estate and Accumulated Depreciation
December 31, 2007






Citizen's Property Insurance

 

 5,997

 

 

 2,150

 

 7,601

 

 

 6

 

 2,150

 

 7,607

 

 

 9,757

 

 

 621

 

 2005

08/05

  Jacksonville, FL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Clearlake Shores

 

 6,683

 

 

 1,775

 

 7,026

 

 

 1,185

 

 1,775

 

 8,211

 

 

 9,986

 

 

 752

 

 2003-2004

04/05

  Clear Lake, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Colony Square

 

 25,488

 

 

 16,700

 

 22,775

 

 

 111

 

 16,700

 

 22,886

 

 

 39,586

 

 

 1,398

 

 1997

05/06

  Sugar Land, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Columns
 Jackson, TN

 

 14,865

 

 

 5,830

 

 19,439

 

 

 4

 

 5,830

 

 19,443

 

 

 25,273

 

 

 2,367

 

 2004

08/04 &  0/04

The Commons at Temecula

 

 29,623

 

 

 12,000

 

 35,887

 

 

  -   

 

 12,000

 

 35,887

 

 

 47,887

 

 

 3,506

 

 1999

04/05

  Temecula, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Computershare Shareholder

 

 44,500

 

 

 8,500

 

 56,621

 

 

  -   

 

 8,500

 

 56,621

 

 

 65,121

 

 

 5,017

 

 2001

07/05

  Services, Canton, MA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coppell Town Center

 

 10,050

 

 

 2,535

 

 14,346

 

 

 37

 

 2,535

 

 14,383

 

 

 16,918

 

 

 395

 

 2001

04/07

  Coppell, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coram Plaza

 

 20,755

 

 

 10,200

 

 26,178

 

 

 837

 

 10,200

 

 27,015

 

 

 37,215

 

 

 2,937

 

 2004

12/04

  Coram, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cornerstone Plaza

 

 8,400

 

 

 2,920

 

 10,359

 

 

 (176)

 

 2,920

 

 10,183

 

 

 13,103

 

 

 968

 

 2004-2005

05/05

  Cocoa Beach, FL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corwest Plaza

 

 18,150

 

 

 6,900

 

 23,851

 

 

 7

 

 6,900

 

 23,858

 

 

 30,758

 

 

 3,513

 

 1999-2003

01/04

  New Britian, CT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost Plus Distribution

 

 16,300

 

 

 10,075

 

 21,483

 

 

 29,483

 

 7,104

 

 53,937

 

 

 61,041

 

 

 1,815

 

 2003

04/06

  Warehouse, Stockton, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cottage Plaza

 

 13,025

 

 

 3,000

 

 19,158

 

 

  -   

 

 3,000

 

 19,158

 

 

 22,158

 

 

 2,049

 

 2004-2005

02/05

  Pawtucket, RI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coventry Health Care

 

 7,060

 

 

 1,480

 

 9,874

 

 

 (1)

 

 1,480

 

 9,873

 

 

 11,353

 

 

 777

 

 2005

10/05

  San Antonio, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cranberry Square

 

 10,900

 

 

 3,000

 

 18,736

 

 

 (53)

 

 3,000

 

 18,683

 

 

 21,683

 

 

 2,400

 

 1996-1997

07/04

  Cranberry Township, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crockett Square

 

 5,812

 

 

 4,140

 

 7,534

 

 

 42

 

 4,140

 

 7,576

 

 

 11,716

 

 

 532

 

 2005

02/06

  Morristown, TN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crossroads Plaza CVS

 

 4,801

 

 

 1,040

 

 3,780

 

 

  -   

 

 1,040

 

 3,780

 

 

 4,820

 

 

 358

 

 1987

05/05

  North Attelborough, MA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crown Theater

 

  -   

 

 

 7,318

 

 954

 

 

  -   

 

 7,318

 

 954

 

 

 8,272

 

 

 156

 

 2000

07/05

  Hartford, CT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cuyahoga Falls Market Cntr

 

 8,285

 

 

 3,350

 

 11,083

 

 

 127

 

 3,350

 

 11,210

 

 

 14,560

 

 

 1,080

 

 1998

04/05

  Cuyahoga Falls, OH

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CVS Pharmacy

 

 2,193

 

 

 910

 

 2,891

 

 

  -   

 

 910

 

 2,891

 

 

 3,801

 

 

 265

 

 1999

06/05

  Burleson, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



85


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC .

Schedule III

Real Estate and Accumulated Depreciation
December 31, 2007






CVS Pharmacy

 3,668

 

 

 2,096

 

 3,863

 

 

 8

 

 2,096

 

 3,871

 

 

 5,967

 

 

 282

 

 2005

12/05

  Cave Creek, AZ

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CVS Pharmacy (Eckerd) 

 

 1,850

 

 

 975

 

 2,400

 

 

 2

 

 975

 

 2,402

 

 

 3,377

 

 

 356

 

 2003

12/03

  Edmond, OK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CVS Pharmacy

 

 3,475

 

 

 1,460

 

 4,455

 

 

 2

 

 1,460

 

 4,457

 

 

 5,917

 

 

 463

 

 2004

03/05

  Jacksonville, FL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CVS Pharmacy

 

 1,566

 

 

 750

 

 1,958

 

 

  -   

 

 750

 

 1,958

 

 

 2,708

 

 

 185

 

 1999

05/05

  Lawton, OK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CVS Pharmacy

 

 1,685

 

 

 250

 

 2,777

 

 

  -   

 

 250

 

 2,777

 

 

 3,027

 

 

 280

 

 2001

03/05

  Montevallo,  AL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CVS Pharmacy

 

 1,901

 

 

 600

 

 2,659

 

 

  -   

 

 600

 

 2,659

 

 

 3,259

 

 

 260

 

 2004

05/05

  Moore, OK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CVS Pharmacy (Eckerd)

 

 2,900

 

 

 932

 

 4,370

 

 

  -   

 

 932

 

 4,370

 

 

 5,302

 

 

 653

 

 2003

12/03

  Norman, OK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CVS Pharmacy

 

 2,429

 

 

 620

 

 3,583

 

 

  -   

 

 620

 

 3,583

 

 

 4,203

 

 

 328

 

 1999

06/05

  Oklahoma City, OK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CVS Pharmacy

 

 2,460

 

 

 1,100

 

 3,254

 

 

  -   

 

 1,100

 

 3,254

 

 

 4,354

 

 

 328

 

 2004

03/05

  Saginaw, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CVS Pharmacy

 

 1,685

 

 

 600

 

 2,469

 

 

 3

 

 600

 

 2,472

 

 

 3,072

 

 

 287

 

 2004

10/04

  Sylacauga, AL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cypress Mill Plaza

 

 9,847

 

 

 2,100

 

 13,130

 

 

 (48)

 

 2,100

 

 13,082

 

 

 15,182

 

 

 1,040

 

 2004

11/05

  Cypress, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Darien Towne Center

 

 16,500

 

 

 7,000

 

 22,468

 

 

 806

 

 7,000

 

 23,274

 

 

 30,274

 

 

 3,474

 

 1994

12/03

  Darien, IL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Davis Towne Crossing

 

 5,365

 

 

 1,850

 

 5,681

 

 

 1,227

 

 1,850

 

 6,908

 

 

 8,758

 

 

 843

 

 2003-2004

06/04

  North Richland Hills, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denton Crossing

 

 35,200

 

 

 6,000

 

 43,434

 

 

 11,062

 

 6,000

 

 54,496

 

 

 60,496

 

 

 5,979

 

 2003-2004

10/04

  Denton, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diebold Warehouse

 

 7,240

 

 

  -   

 

 11,190

 

 

 2

 

  -   

 

 11,192

 

 

 11,192

 

 

 1,026

 

 2005

07/05

  Green, OH

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dorman Center I & II
 Spartanburg, SC

 

 27,610

 

 

 17,025

 

 29,478

 

 

 (239)

 

 17,025

 

 29,239

 

 

 46,264

 

 

 4,137

 

 2003-2004

03/04 & 07/04

Duck Creek

 

 14,426

 

 

 4,440

 

 12,076

 

 

 5,090

 

 4,440

 

 17,166

 

 

 21,606

 

 

 1,092

 

 2005

11/05

  Bettendorf, IA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

East Stone Commons

 

 22,550

 

 

 2,900

 

 28,714

 

 

 681

 

 2,900

 

 29,395

 

 

 32,295

 

 

 1,595

 

 2005

06/06

  Kingsport, TN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



86


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC .

Schedule III

Real Estate and Accumulated Depreciation
December 31, 2007






Eastwood Towne Center

 

 46,750

 

 

 12,000

 

 65,067

 

 

 (681)

 

 12,000

 

 64,386

 

 

 76,386

 

 

 8,686

 

 2002

05/04

  Lansing, MI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eckerd Drug Store

 

 3,200

 

 

 3,000

 

 3,955

 

 

 35

 

 3,000

 

 3,990

 

 

 6,990

 

 

 376

 

 2005

05/05

  Colesville, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eckerd Drug Store

 

 3,400

 

 

 1,550

 

 3,954

 

 

 6

 

 1,550

 

 3,960

 

 

 5,510

 

 

 351

 

 2004

08/05

  Hellertown, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eckerd Drug Store

 

 3,400

 

 

 975

 

 4,369

 

 

 6

 

 975

 

 4,375

 

 

 5,350

 

 

 387

 

 2004

08/05

  Lebanon, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eckerd Drug Store

 

 3,322

 

 

 1,000

 

 4,328

 

 

 5

 

 1,000

 

 4,333

 

 

 5,333

 

 

 384

 

 2004

08/05

  Punxsutawney, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Edgemont Town Center

 

 8,598

 

 

 3,500

 

 10,956

 

 

 (317)

 

 3,500

 

 10,639

 

 

 14,139

 

 

 1,221

 

 2003

11/04

  Homewood, AL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Edwards Multiplex

 

 19,730

 

 

  -   

 

 35,421

 

 

  -   

 

  -   

 

 35,421

 

 

 35,421

 

 

 3,463

 

 1988

05/05

  Fresno, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Edwards Multiplex

 

 27,875

 

 

 11,800

 

 33,098

 

 

  -   

 

 11,800

 

 33,098

 

 

 44,898

 

 

 3,236

 

 1997

04/05

  Ontario, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Evans Towne Centre

 

 5,005

 

 

 1,700

 

 6,425

 

 

 32

 

 1,700

 

 6,457

 

 

 8,157

 

 

 713

 

 1995

12/04

  Evans, GA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fairgrounds Plaza

 

15,291

 

 

 4,800

 

 13,490

 

 

 3,723

 

 4,800

 

 17,213

 

 

 22,013

 

 

 1,647

 

 2002-2004

01/05

  Middletown, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fisher Scientific

 

 8,260

 

 

 510

 

 12,768

 

 

  -   

 

 510

 

 12,768

 

 

 13,278

 

 

 1,117

 

 2005

06/05

  Kalamazoo, MI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Five Forks

 

 4,483

 

 

 2,100

 

 5,374

 

 

 15

 

 2,100

 

 5,389

 

 

 7,489

 

 

 608

 

 1999

12/04

  Simpsonville, SC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forks Town Center

 

 10,395

 

 

 2,430

 

 14,836

 

 

 716

 

 2,430

 

 15,552

 

 

 17,982

 

 

 1,930

 

 2002

07/04

  Easton, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Four Peaks Plaza

 

 17,072

 

 

 5,000

 

 20,098

 

 

 3,100

 

 5,000

 

 23,198

 

 

 28,198

 

 

 2,153

 

 2004

03/05

  Fountain Hills, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fox Creek Village

 

 11,485

 

 

 3,755

 

 15,563

 

 

 (1,128)

 

 3,755

 

 14,435

 

 

 18,190

 

 

 1,704

 

 2003-2004

11/04

  Longmont, CO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fullerton Metrocenter

 

 28,050

 

 

  -   

 

 47,403

 

 

 381

 

  -   

 

 47,784

 

 

 47,784

 

 

 6,113

 

 1998

06/04

  Fullerton, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Galvez Shopping Center

 

 4,470

 

 

 1,250

 

 4,947

 

 

 352

 

 1,250

 

 5,299

 

 

 6,549

 

 

 470

 

 2004

06/05

  Galveston, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Gateway

 

 98,780

 

 

 28,664

 

 110,945

 

 

 20,334

 

 28,664

 

 131,279

 

 

 159,943

 

 

 11,035

 

 2001-2003

05/05

  Salt Lake City, UT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



87


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC .

Schedule III

Real Estate and Accumulated Depreciation
December 31, 2007






Gateway Pavilions

 

 35,842

 

 

 9,880

 

 55,195

 

 

 349

 

 9,880

 

 55,544

 

 

 65,424

 

 

 6,255

 

 2003-2004

12/04

  Avondale, AZ

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gateway Plaza

 

 18,163

 

 

  -   

 

 26,371

 

 

 2,420

 

  -   

 

 28,791

 

 

 28,791

 

 

 3,384

 

 2000

07/04

  Southlake, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gateway Station

 

 3,717

 

 

 1,050

 

 3,911

 

 

 1,213

 

 1,050

 

 5,124

 

 

 6,174

 

 

 550

 

 2003-2004

12/04

  College Station, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gateway Station II

 

 6,268

 

 

 1,530

 

 8,146

 

 

 463

 

 1,530

 

 8,609

 

 

 10,139

 

 

 183

 

 2006-2007

05/07

  College Station, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gateway Village

 

 27,233

 

 

 8,550

 

 39,298

 

 

 3,707

 

 8,550

 

 43,005

 

 

 51,555

 

 

 5,298

 

 1996

07/04

  Annapolis, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gerry Centennial Plaza

 

  -   

 

 

 5,370

 

 12,968

 

 

 3,347

 

 5,370

 

 16,315

 

 

 21,685

 

 

 259

 

 2006

06/07

  Oswego, IL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Giant Eagle

 

 12,154

 

 

 3,425

 

 16,868

 

 

 10

 

 3,425

 

 16,878

 

 

 20,303

 

 

 1,289

 

 2000

11/05

  Columbus, OH

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gloucester Town Center

 

 11,975

 

 

 3,900

 

 17,878

 

 

 32

 

 3,900

 

 17,910

 

 

 21,810

 

 

 1,704

 

 2003

05/05

  Gloucester, NJ

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GMAC Insurance Buildings

 

 33,000

 

 

 8,250

 

 50,287

 

 

 12

 

 8,250

 

 50,299

 

 

 58,549

 

 

 5,993

 

 1980/1990

09/04

  Winston-Salem, NC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Golfsmith

 

 2,476

 

 

 1,250

 

 2,974

 

 

 2

 

 1,250

 

 2,976

 

 

 4,226

 

 

 226

 

 1992/2004

11/05

  Altamonte Springs, FL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Governor's Marketplace

 

 20,625

 

 

  -   

 

 30,377

 

 

 1,677

 

  -   

 

 32,054

 

 

 32,054

 

 

 3,796

 

 2001

08/04

  Tallahassee, FL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grapevine Crossing

 

 12,815

 

 

 4,100

 

 16,938

 

 

 55

 

 4,100

 

 16,993

 

 

 21,093

 

 

 1,662

 

 2001

04/05

  Grapevine, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Great Southwest Crossing

 

 8,868

 

 

 2,750

 

 12,699

 

 

 165

 

 2,750

 

 12,864

 

 

 15,614

 

 

 1,093

 

 2003

09/05

  Grand Prairie, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Green's Corner

 

 7,022

 

 

 3,200

 

 8,663

 

 

 (33)

 

 3,200

 

 8,630

 

 

 11,830

 

 

 949

 

 1997

12/04

  Cumming, GA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Greensburg Commons

 

 14,200

 

 

 2,700

 

 19,116

 

 

 (12)

 

 2,700

 

 19,104

 

 

 21,804

 

 

 1,927

 

 1999

04/05

  Greensburg, IN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Greenwich Center

 

  -   

 

 

 3,700

 

 15,949

 

 

 107

 

 3,700

 

 16,056

 

 

 19,756

 

 

 1,079

 

 2002

02/06

  Phillipsburg, NJ

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gurnee Town Center

 

 24,360

 

 

 7,000

 

 35,147

 

 

 306

 

 7,000

 

 35,453

 

 

 42,453

 

 

 4,112

 

 2000

10/04

  Gurnee, IL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Harris Teeter

 

 3,960

 

 

 1,810

 

 5,152

 

 

 1

 

 1,810

 

 5,153

 

 

 6,963

 

 

 630

 

 1977/1995

09/04

  Wilmington, NC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



88


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC .

Schedule III

Real Estate and Accumulated Depreciation
December 31, 2007






Hartford Insurance Building

 

 9,614

 

 

 1,700

 

 13,709

 

 

 6

 

 1,700

 

 13,715

 

 

 15,415

 

 

 1,173

 

 2005

08/05

  Maple Grove, MN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Harvest Towne Center

 

 5,005

 

 

 3,155

 

 5,085

 

 

 (10)

 

 3,155

 

 5,075

 

 

 8,230

 

 

 621

 

 1996-1999

09/04

  Knoxville, TN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Henry Town Center

 

 34,307

 

 

 10,650

 

 46,814

 

 

 265

 

 10,650

 

 47,079

 

 

 57,729

 

 

 5,178

 

 2002

12/04

  McDonough, GA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Heritage Towne Crossing

 

 8,950

 

 

 3,065

 

 10,729

 

 

 1,276

 

 3,065

 

 12,005

 

 

 15,070

 

 

 1,624

 

 2002

03/04

  Euless, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hewitt Associates Campus

 

 129,797

 

 

 28,500

 

 178,524

 

 

 (3)

 

 28,497

 

 178,524

 

 

 207,021

 

 

 16,908

 

 1974/1986

05/05

  Lincolnshire, IL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hickory Ridge

 

 23,650

 

 

 6,860

 

 30,517

 

 

 (795)

 

 6,860

 

 29,722

 

 

 36,582

 

 

 4,247

 

 1999

01/04

  Hickory, NC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

High Ridge Crossing

 

 7,439

 

 

 3,075

 

 9,148

 

 

 (267)

 

 3,075

 

 8,881

 

 

 11,956

 

 

 945

 

 2004

03/05

  High Ridge, MO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hobby Lobby

 

 3,025

 

 

 1,728

 

 3,791

 

 

  -   

 

 1,728

 

 3,791

 

 

 5,519

 

 

 417

 

 2004

01/05

  Concord, NC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Holliday Towne Center

 

 8,050

 

 

 2,200

 

 11,609

 

 

 (426)

 

 2,200

 

 11,183

 

 

 13,383

 

 

 1,221

 

 2003

02/05

  Duncansville, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home Depot Center

 

 11,200

 

 

  -   

 

 16,758

 

 

  -   

 

  -   

 

 16,758

 

 

 16,758

 

 

 1,536

 

 1996

06/05

  Pittsburgh, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home Depot Plaza

 

 13,530

 

 

 9,700

 

 17,137

 

 

  -   

 

 9,700

 

 17,137

 

 

 26,837

 

 

 1,569

 

 1992

06/05

  Orange, CT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HQ Building

 

 9,978

 

 

 5,200

 

 10,010

 

 

 10

 

 5,200

 

 10,020

 

 

 15,220

 

 

 735

 

Redev: 04

12/05

  San Antonio, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Humblewood Shopping Cntr

 

 9,558

 

 

 2,200

 

 12,823

 

 

 (303)

 

 2,200

 

 12,520

 

 

 14,720

 

 

 958

 

Renov: 05

11/05

  Humble, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Irmo Station

 

 7,085

 

 

 2,600

 

 9,247

 

 

 37

 

 2,600

 

 9,284

 

 

 11,884

 

 

 1,019

 

1980/1985

12/04

  Irmo, SC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kaiser Permanente

 

 32,670

 

 

 12,950

 

 43,629

 

 

  -   

 

 12,950

 

 43,629

 

 

 56,579

 

 

 4,000

 

 2004-2005

06/05

  Cupertino, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

King Philip's Crossing

 

 13,650

 

 

 3,710

 

 19,144

 

 

 (194)

 

 3,710

 

 18,950

 

 

 22,660

 

 

 1,514

 

 2005

11/05

  Seekonk, MA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kohl's

 

 6,085

 

 

 1,600

 

 8,275

 

 

 5

 

 1,600

 

 8,280

 

 

 9,880

 

 

 628

 

 2005

10/05

  Georgetown, KY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kohl's/Wilshire Plaza

 

 5,418

 

 

 2,600

 

 6,849

 

 

 9

 

 2,600

 

 6,858

 

 

 9,458

 

 

 775

 

 2004

07/04

  Kansas City, MO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



89


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC .

Schedule III

Real Estate and Accumulated Depreciation
December 31, 2007






La Plaza Del Norte

 

 32,528

 

 

 16,005

 

 37,744

 

 

 (342)

 

 16,005

 

 37,402

 

 

 53,407

 

 

 5,409

 

 1996/1999

01/04

  San Antonio, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lake Forest Crossing

 

 4,520

 

 

 2,200

 

 5,110

 

 

 390

 

 2,200

 

 5,500

 

 

 7,700

 

 

 526

 

 2004

03/05

  McKinney, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lake Mary Pointe

 

 3,658

 

 

 2,075

 

 4,009

 

 

 85

 

 2,075

 

 4,094

 

 

 6,169

 

 

 473

 

 1999

10/04

  Lake Mary, FL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lake Worth Towne

 

 26,491

 

 

 6,200

 

 30,910

 

 

 5,167

 

 6,200

 

 36,077

 

 

 42,277

 

 

 1,892

 

 2005

06/06

  Crossing, Lake Worth, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lakepointe Towne Center

 

 21,715

 

 

 4,750

 

 23,904

 

 

 5,064

 

 4,750

 

 28,968

 

 

 33,718

 

 

 2,608

 

 2004

05/05

  Lewisville, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lakewood Towne Center
 Lakewood, WA

 

 44,000

 

 

 11,200

 

 70,796

 

 

 (4,032)

 

 11,200

 

 66,764

 

 

 77,964

 

 

 8,627

 

1988/2002-2003

06/04

Larkspur Landing

 

 33,630

 

 

 20,800

 

 32,821

 

 

 889

 

 20,800

 

 33,710

 

 

 54,510

 

 

 5,003

 

 1978/2001

01/04

  Larkspur, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lincoln Plaza

 

 47,500

 

 

 13,000

 

 46,482

 

 

 20,889

 

 13,165

 

 67,206

 

 

 80,371

 

 

 4,455

 

 2001/2004

09/05

  Worchester, MA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Low Country Village I & II
 Bluffton, SC

 

 10,810

 

 

 2,910

 

 16,614

 

 

 (88)

 

 2,910

 

 16,526

 

 

 19,436

 

 

 1,767

 

2004&2005

06/04 & 09/05

Lowe's/Bed, Bath & Beyond

 

 13,700

 

 

 7,423

 

 799

 

 

 (8)

 

 7,415

 

 799

 

 

 8,214

 

 

 124

 

 2005

08/05

  Butler, NJ

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MacArthur Crossing

 

 12,700

 

 

 4,710

 

 16,265

 

 

 237

 

 4,710

 

 16,502

 

 

 21,212

 

 

 2,379

 

 1995-1996

02/04

  Los Colinas, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Magnolia Square

 

 10,265

 

 

 2,635

 

 15,040

 

 

 45

 

 2,635

 

 15,085

 

 

 17,720

 

 

 1,633

 

 2004

02/05

  Houma, LA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Manchester Meadows

 

  -   

 

 

 14,700

 

 39,738

 

 

 (167)

 

 14,700

 

 39,571

 

 

 54,271

 

 

 4,972

 

 1994-1995

08/04

  Town and Country, MO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mansfield Towne Crossing

 

 10,982

 

 

 3,300

 

 12,195

 

 

 3,437

 

 3,300

 

 15,632

 

 

 18,932

 

 

 1,738

 

 2003-2004

11/04

  Mansfield, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maple Tree Place

 

 63,400

 

 

 28,000

 

 67,361

 

 

 2,008

 

 28,000

 

 69,369

 

 

 97,369

 

 

 6,513

 

 2004-2005

05/05

  Williston, VT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Market at Clifty

 

 14,686

 

 

 1,900

 

 16,668

 

 

 1,024

 

 1,847

 

 17,745

 

 

 19,592

 

 

 1,341

 

 1986/2004

11/05

  Crossing, Columbus, IN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Market at Polaris

 

 36,196

 

 

 11,750

 

 40,197

 

 

 6,213

 

 11,750

 

 46,410

 

 

 58,160

 

 

 3,331

 

 2005

11/05

  Columbus, OH

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Massillon Commons

 

 10,126

 

 

 4,090

 

 12,521

 

 

 203

 

 4,090

 

 12,724

 

 

 16,814

 

 

 1,237

 

 1986/2000

04/05

  Massillion, OH

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maytag Distribution Center

 

 12,740

 

 

 1,700

 

 20,681

 

 

  -   

 

 1,700

 

 20,681

 

 

 22,381

 

 

 2,171

 

 2004

01/05

  North Liberty, IA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



90


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC .

Schedule III

Real Estate and Accumulated Depreciation
December 31, 2007






McAllen Shopping Center

 

 2,455

 

 

 850

 

 2,958

 

 

 13

 

 850

 

 2,971

 

 

 3,821

 

 

 327

 

 2004

12/04

  McAllen, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

McDermott Towne Crossing

 

 5,617

 

 

 1,850

 

 6,923

 

 

 (6)

 

 1,850

 

 6,917

 

 

 8,767

 

 

 570

 

 1999

09/05

  McAllen, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 5,000

 

 

 2,000

 

 5,786

 

 

 1

 

 2,000

 

 5,787

 

 

 7,787

 

 

 477

 

 1988

09/05

  Bakersfield, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 5,000

 

 

 3,400

 

 4,428

 

 

 1

 

 3,400

 

 4,429

 

 

 7,829

 

 

 365

 

 1981

09/05

  El Paso, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 5,500

 

 

 2,910

 

 5,176

 

 

 2

 

 2,910

 

 5,178

 

 

 8,088

 

 

 427

 

 1993

09/05

  Elk Grove, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 6,700

 

 

 6,530

 

 5,431

 

 

 1

 

 6,530

 

 5,432

 

 

 11,962

 

 

 448

 

 1987

09/05

  Escondido, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 5,200

 

 

 2,400

 

 5,806

 

 

 1

 

 2,400

 

 5,807

 

 

 8,207

 

 

 479

 

 1992

09/05

  Fontana, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 5,100

 

 

 2,500

 

 5,538

 

 

 1

 

 2,500

 

 5,539

 

 

 8,039

 

 

 457

 

 1993

09/05

  Fresno, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 4,700

 

 

 2,750

 

 5,401

 

 

 1

 

 2,750

 

 5,402

 

 

 8,152

 

 

 446

 

 1993

09/05

  Hanford, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 5,300

 

 

 2,350

 

 5,978

 

 

 1

 

 2,350

 

 5,979

 

 

 8,329

 

 

 493

 

 1994

09/05

  Highland, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 4,400

 

 

 2,770

 

 4,282

 

 

 1

 

 2,770

 

 4,283

 

 

 7,053

 

 

 353

 

 1979

09/05

  Lodi, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 5,700

 

 

 2,850

 

 6,307

 

 

 1

 

 2,850

 

 6,308

 

 

 9,158

 

 

 520

 

 1992

09/05

  Manteca, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 5,100

 

 

 4,100

 

 4,003

 

 

 1

 

 4,100

 

 4,004

 

 

 8,104

 

 

 330

 

 1992

09/05

  McAllen, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 5,100

 

 

 3,930

 

 4,081

 

 

 2

 

 3,930

 

 4,083

 

 

 8,013

 

 

 337

 

 1988

09/05

  Moreno Valley, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 5,100

 

 

 4,800

 

 3,211

 

 

 1

 

 4,800

 

 3,212

 

 

 8,012

 

 

 265

 

 1989

09/05

  Morgan Hill, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 6,400

 

 

 6,420

 

 5,482

 

 

 1

 

 6,420

 

 5,483

 

 

 11,903

 

 

 452

 

 1982

09/05

  Oceanside, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 5,000

 

 

 4,500

 

 3,294

 

 

 1

 

 4,500

 

 3,295

 

 

 7,795

 

 

 272

 

 1990

 09/05

  Rancho Cucamonga, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 5,000

 

 

 3,450

 

 4,418

 

 

 1

 

 3,450

 

 4,419

 

 

 7,869

 

 

 364

 

 1981

09/05

  Redlands, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



91


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC .

Schedule III

Real Estate and Accumulated Depreciation
December 31, 2007






Mervyns

 

 3,300

 

 

 1,500

 

 4,639

 

 

 2

 

 1,500

 

 4,641

 

 

 6,141

 

 

 383

 

 1990

09/05

  Ridgecrest, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 5,400

 

 

 4,820

 

 3,052

 

 

 1

 

 4,820

 

 3,053

 

 

 7,873

 

 

 252

 

 1983

09/05

  Roseville, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 4,800

 

 

 3,930

 

 3,594

 

 

 1

 

 3,930

 

 3,595

 

 

 7,525

 

 

 296

 

 1973

09/05

  Sacramento, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 7,900

 

 

 8,260

 

 4,144

 

 

 1

 

 8,260

 

 4,145

 

 

 12,405

 

 

 342

 

 1993

09/05

  San Diego, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 6,000

 

 

 5,300

 

 3,607

 

 

 1

 

 5,300

 

 3,608

 

 

 8,908

 

 

 298

 

 1980

09/05

  Sun Valley, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 5,100

 

 

 4,790

 

 3,117

 

 

 2

 

 4,790

 

 3,119

 

 

 7,909

 

 

 257

 

 1990

09/05

  Temecula, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 4,000

 

 

 1,960

 

 4,373

 

 

 1

 

 1,960

 

 4,374

 

 

 6,334

 

 

 361

 

 1987

09/05

  Turlock, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 5,200

 

 

 3,385

 

 4,708

 

 

 1

 

 3,385

 

 4,709

 

 

 8,094

 

 

 388

 

 1992

09/05

  Vacaville, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mervyns

 

 5,000

 

 

 4,800

 

 3,022

 

 

 2

 

 4,800

 

 3,024

 

 

 7,824

 

 

 249

 

 1982

09/05

  Ventura, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mesa Fiesta

 

 23,500

 

 

 5,800

 

 28,302

 

 

 (782)

 

 5,800

 

 27,520

 

 

 33,320

 

 

 3,083

 

 2004

12/04

  Mesa, AZ

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid-Hudson Center

 

 23,750

 

 

 9,900

 

 29,160

 

 

 1

 

 9,900

 

 29,161

 

 

 39,061

 

 

 2,586

 

 2000

07/05

  Poughkeepsie, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Midtown Center

 

 28,228

 

 

 13,220

 

 36,800

 

 

 4,169

 

 13,220

 

 40,969

 

 

 54,189

 

 

 4,191

 

 1986-1987

01/05

  Milwaukee, WI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mission Crossing
 San Antonio, TX

 

 13,630

 

 

 4,000

 

 12,616

 

 

 6,790

 

 4,670

 

 18,736

 

 

 23,406

 

 

 1,495

 

 Renov:
03-05

07/05

Mitchell Ranch Plaza

 

 20,060

 

 

 5,550

 

 26,213

 

 

 207

 

 5,550

 

 26,420

 

 

 31,970

 

 

 3,220

 

 2003

08/04

  New Port Richey, FL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Montecito Crossing

 

 28,285

 

 

 9,700

 

 25,414

 

 

 5,199

 

 9,700

 

 30,613

 

 

 40,313

 

 

 2,408

 

 2004-2005

10/05

  Las Vegas, NV

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mountain View Plaza I & II
 Kalispell, MT  

 

 14,373

 

 

 5,180

 

 18,212

 

 

 34

 

 5,180

 

 18,246

 

 

 23,426

 

 

 1,315

 

2003&2006

10/05 & 11/06

New Forest Crossing

 

 10,797

 

 

 5,000

 

 11,404

 

 

 279

 

 5,000

 

 11,683

 

 

 16,683

 

 

 1,042

 

 2002-2003

06/005

  Houston, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Newburgh Crossing

 

 8,415

 

 

 4,000

 

 10,246

 

 

 6

 

 4,000

 

 10,252

 

 

 14,252

 

 

 845

 

 2005

10/05

  Newburgh, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Newnan Crossing
 Newnan, GA

 

 23,766

 

 

 15,100

 

 33,986

 

 

 3,618

 

 15,100

 

 37,604

 

 

 52,704

 

 

 4,756

 

1999&2004

12/03 & 02/04



92


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC .

Schedule III

Real Estate and Accumulated Depreciation
December 31, 2007






Newton Crossroads

 

 5,548

 

 

 3,350

 

 6,927

 

 

 (60)

 

 3,350

 

 6,867

 

 

 10,217

 

 

 756

 

 1997

12/04

  Covington, GA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North Ranch Pavilions

 

 10,157

 

 

 9,705

 

 8,296

 

 

 291

 

 9,705

 

 8,587

 

 

 18,292

 

 

 1,290

 

 1992

01/04

  Thousand Oaks, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North Rivers Towne Center

 

 11,050

 

 

 3,350

 

 15,720

 

 

 253

 

 3,350

 

 15,973

 

 

 19,323

 

 

 2,127

 

 2003-2004

04/04

  Charleston, SC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Northgate North

 

 26,650

 

 

 7,540

 

 49,078

 

 

(17,041)

 

 7,540

 

 32,037

 

 

 39,577

 

 

 4,312

 

 1999-2003

06/04

  Seattle, WA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Northpointe Plaza

 

 30,850

 

 

 13,800

 

 37,707

 

 

 929

 

 13,800

 

 38,636

 

 

 52,436

 

 

 5,055

 

 1991-1993

05/04

  Spokane, WA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Northwood Crossing

 

 10,691

 

 

 3,770

 

 13,658

 

 

 367

 

 3,770

 

 14,025

 

 

 17,795

 

 

 1,016

 

 1979/2004

01/06

  Northport, AL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Northwoods Center

 

 11,193

 

 

 3,415

 

 9,475

 

 

 5,849

 

 3,415

 

 15,324

 

 

 18,739

 

 

 1,585

 

 2002-2004

12/04

  Wesley Chapel, FL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Old Time Pottery     Douglasville, GA

 

 3,250

 

 

 2,000

 

 3,017

 

 

 19

 

 2,000

 

 3,036

 

 

 5,036

 

 

 167

 

 1987/1999 & 2005

06/06

Orange Plaza (Golfland
 Plaza), Orange, CT

 

 8,550

 

 

 4,350

 

 4,834

 

 

 3

 

 4,350

 

 4,837

 

 

 9,187

 

 

 457

 

 1995

05/05

Orchard
  New Hartford, NY

 

 12,987

 

 

 3,200

 

 17,151

 

 

 (2)

 

 3,200

 

 17,149

 

 

 20,349

 

 

 1,482

 

 2004-2005

07/05 &

09/05

Pacheco Pass Phase I & II
 Gilroy, CA

 

 29,088

 

 

 13,420

 

 32,785

 

 

 (149)

 

 13,420

 

 32,636

 

 

 46,056

 

 

 1,905

 

2005&2006

07/05 & 06/07

Page Field Commons

 

 26,853

 

 

  -   

 

 43,355

 

 

236

 

  -   

 

 43,591

 

 

 43,591

 

 

 4,255

 

 1999

05/05

  Fort Myers, FL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paradise Valley Marketplace
 Phoenix, AZ

 

 15,681

 

 

 6,590

 

 20,425

 

 

 (287)

 

 6,590

 

 20,138

 

 

 26,728

 

 

 2,747

 

 2002

04/04

Pavilion at Kings Grant I & II
 Concord, NC

 5,342

 

 

 10,274

 

 12,392

 

 

 7,328

 

 10,274

 

 19,720

 

 

 29,994

 

 

 1,141

 

 2002-2003 & 2005

12/03 & 06/06

Peoria Crossings
 Peoria, AZ

 

 23,090

 

 

 6,995

 

 32,816

 

 

 3,867

 

 8,495

 

 35,183

 

 

 43,678

 

 

 4,605

 

 2002-2003 & 2005

03/04 & 05/05

PetSmart Distribution

 

 23,731

 

 

 1,700

 

 38,808

 

 

  -   

 

 1,700

 

 38,808

 

 

 40,508

 

 

 3,396

 

 2004-2005

07/05

  Center, Ottawa, IL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Phenix Crossing

 

 5,535

 

 

 2,600

 

 6,776

 

 

 34

 

 2,600

 

 6,810

 

 

 9,410

 

 

 748

 

 2004

12/04

  Phenix City, Alabama

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pine Ridge Plaza

 

 14,700

 

 

 5,000

 

 19,802

 

 

 453

 

 5,000

 

 20,255

 

 

 25,255

 

 

 2,635

 

 1998-2004

06/04

  Lawrence, KS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Placentia Town Center

 

 13,695

 

 

 11,200

 

 11,751

 

 

 (91)

 

 11,200

 

 11,660

 

 

 22,860

 

 

 1,323

 

 1973/2000

12/04

  Placentia, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plaza at Marysville

 

 11,800

 

 

 6,600

 

 13,728

 

 

 107

 

 6,600

 

 13,835

 

 

 20,435

 

 

 1,720

 

 1995

07/04

  Marysville, WA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



93


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC .

Schedule III

Real Estate and Accumulated Depreciation
December 31, 2007






Plaza at Riverlakes

 

 9,350

 

 

 5,100

 

 10,824

 

 

 20

 

 5,100

 

 10,844

 

 

 15,944

 

 

 1,273

 

 2001

10/04

  Bakersfield, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plaza Santa Fe II

 

 16,323

 

 

  -   

 

 28,588

 

 

 (402)

 

  -   

 

 28,186

 

 

 28,186

 

 

 3,719

 

 2000-2002

06/04

  Santa Fe, NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pleasant Run

 

 22,800

 

 

 4,200

 

 29,085

 

 

 4,854

 

 4,200

 

 33,939

 

 

 38,139

 

 

 3,525

 

 2004

12/04

  Cedar Hill, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Powell Center

 

 8,390

 

 

 5,490

 

 7,448

 

 

 15

 

 5,490

 

 7,463

 

 

 12,953

 

 

 206

 

 2001

04/07

  Lewis Center, OH

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Promenade at Red Cliff

 

 10,590

 

 

 5,340

 

 12,665

 

 

 36

 

 5,340

 

 12,701

 

 

 18,041

 

 

 1,831

 

 1997

02/04

  St. George, UT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Publix

 

 4,384

 

 

 2,100

 

 5,634

 

 

  -   

 

 2,100

 

 5,634

 

 

 7,734

 

 

 550

 

 2004

04/05

  Mountain Brook, AL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quakertown

 

 7,470

 

 

 2,400

 

 9,246

 

 

 1

 

 2,400

 

 9,247

 

 

 11,647

 

 

 792

 

 2004-2005

09/05

  Quakertown, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rasmussen College

 

 3,053

 

 

 850

 

 4,049

 

 

 6

 

 850

 

 4,055

 

 

 4,905

 

 

 359

 

 2005

08/05

  Brooklyn Park, MN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rave Theater

 

 17,889

 

 

 3,440

 

 22,190

 

 

 3,037

 

 3,440

 

 25,227

 

 

 28,667

 

 

 1,763

 

 2005

12/05

  Houston, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Raytheon Facility

 

 11,841

 

 

 650

 

 18,353

 

 

 2

 

 650

 

 18,355

 

 

 19,005

 

 

 1,626

 

Rehab:2001

08/05

  State College, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Red Bug Village

 

 4,539

 

 

 1,790

 

 6,178

 

 

 161

 

 1,790

 

 6,339

 

 

 8,129

 

 

 452

 

 2004

12/05

  Winter Springs, FL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reisterstown Road Plaza

 

 49,650

 

 

 15,800

 

 70,372

 

 

 6,545

 

 15,800

 

 76,917

 

 

 92,717

 

 

 9,357

 

 1986/2004

08/04

  Baltimore, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ridge Tool Building

 

 4,543

 

 

 415

 

 6,799

 

 

 1

 

 415

 

 6,800

 

 

 7,215

 

 

 535

 

 2005

09/05

  Cambridge, OH

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)   

 

 2,903

 

 

 2,000

 

 2,722

 

 

  -   

 

 2,000

 

 2,722

 

 

 4,722

 

 

 216

 

 1999

11/05

  Sheridan Dr., Amherst, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)   

 

 3,243

 

 

 2,500

 

 2,764

 

 

 2

 

 2,500

 

 2,766

 

 

 5,266

 

 

 220

 

 2003

11/05

  Transit Rd , Amherst, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)

 

 1,224

 

 

 900

 

 1,215

 

 

  -   

 

 900

 

 1,215

 

 

 2,115

 

 

 115

 

 1999-2000

05/05

  Atlanta, GA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)  

 

 2,855

 

 

 1,860

 

 2,786

 

 

  -   

 

 1,860

 

 2,786

 

 

 4,646

 

 

 221

 

 2004

11/05

  East Main St., Batavia, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)   .

 

 2,547

 

 

 1,510

 

 2,627

 

 

  -   

 

 1,510

 

 2,627

 

 

 4,137

 

 

 209

 

 2001

11/05

  W. Main St., Batavia, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



94


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC .

Schedule III

Real Estate and Accumulated Depreciation
December 31, 2007






Rite Aid Store (Eckerd)   

 

 2,198

 

 

 900

 

 2,677

 

 

  -   

 

 900

 

 2,677

 

 

 3,577

 

 

 213

 

 2000

11/05

   Ferry St., Buffalo, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)  

 

 2,174

 

 

 1,340

 

 2,192

 

 

  -   

 

 1,340

 

 2,192

 

 

 3,532

 

 

 174

 

 1998

11/05

  Main St., Buffalo, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)

 

 3,091

 

 

 1,968

 

 2,575

 

 

 1

 

 1,968

 

 2,576

 

 

 4,544

 

 

 205

 

 2004

11/05

  Canandaigua, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)

 

 1,628

 

 

 750

 

 2,042

 

 

  -   

 

 750

 

 2,042

 

 

 2,792

 

 

 187

 

 1999

06/05

  Chattanooga, TN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)

 

 2,117

 

 

 2,080

 

 1,393

 

 

  -   

 

 2,080

 

 1,393

 

 

 3,473

 

 

 111

 

 1999

11/05

  Cheektowaga, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)  

 

 1,750

 

 

 900

 

 2,377

 

 

  -   

 

 900

 

 2,377

 

 

 3,277

 

 

 321

 

 2003-2004

06/04

  Columbia, SC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)  

 

 1,425

 

 

 600

 

 2,033

 

 

 1

 

 600

 

 2,034

 

 

 2,634

 

 

 267

 

 2003-2004

06/04

  Crossville, TN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)

 

 1,665

 

 

 900

 

 2,475

 

 

  -   

 

 900

 

 2,475

 

 

 3,375

 

 

 196

 

 1999

11/05

  Grand Island, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)

 

 1,926

 

 

 470

 

 2,657

 

 

  -   

 

 470

 

 2,657

 

 

 3,127

 

 

 211

 

 1998

11/05

  Greece, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)  

 

 1,650

 

 

 1,050

 

 2,047

 

 

 1

 

 1,050

 

 2,048

 

 

 3,098

 

 

 269

 

 2003-2004

06/04

   Greer, SC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)

 

 2,409

 

 

 2,060

 

 1,873

 

 

  -   

 

 2,060

 

 1,873

 

 

 3,933

 

 

 149

 

 2002

11/05

  Hudson, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)

 

 2,877

 

 

 1,940

 

 2,736

 

 

  -   

 

 1,940

 

 2,736

 

 

 4,676

 

 

 217

 

 2002

11/05

  Irondequoit, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)

 

 1,975

 

 

 700

 

 2,960

 

 

 1

 

 700

 

 2,961

 

 

 3,661

 

 

 389

 

 2003-2004

06/04

  Kill Devil Hills, NC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)

 

 1,786

 

 

 1,710

 

 1,207

 

 

  -   

 

 1,710

 

 1,207

 

 

 2,917

 

 

 96

 

 1999

11/05

  Lancaster, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)

 

 2,716

 

 

 1,650

 

 2,788

 

 

  -   

 

 1,650

 

 2,788

 

 

 4,438

 

 

 221

 

 2002

11/05

  Lockport, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)

 

 1,682

 

 

 820

 

 1,935

 

 

  -   

 

 820

 

 1,935

 

 

 2,755

 

 

 154

 

 2000

11/05

  North Chili, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)

 

 2,452

 

 

 1,190

 

 2,809

 

 

  -   

 

 1,190

 

 2,809

 

 

 3,999

 

 

 223

 

 1999

11/05

  Olean, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)

 

 2,376

 

 

 1,590

 

 2,279

 

 

  -   

 

 1,590

 

 2,279

 

 

 3,869

 

 

 181

 

 2001

11/05

  Rochester, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



95


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC .

Schedule III

Real Estate and Accumulated Depreciation
December 31, 2007






Rite Aid Store (Eckerd)

 

 3,210

 

 

 2,220

 

 3,025

 

 

 2

 

 2,220

 

 3,027

 

 

 5,247

 

 

 240

 

 2001

11/05

  Lake Ave., Rochester, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)

 

 2,370

 

 

 800

 

 3,075

 

 

  -   

 

 800

 

 3,075

 

 

 3,875

 

 

 244

 

 2000

11/05

  Tonawanda, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)

 

 2,770

 

 

 2,830

 

 1,683

 

 

  -   

 

 2,830

 

 1,683

 

 

 4,513

 

 

 134

 

 2003

11/05

  West Seneca, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)

 

 2,395

 

 

 1,610

 

 2,300

 

 

  -   

 

 1,610

 

 2,300

 

 

 3,910

 

 

 183

 

 2000

11/05

  West Seneca, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rite Aid Store (Eckerd)

 

 1,372

 

 

 810

 

 1,434

 

 

  -   

 

 810

 

 1,434

 

 

 2,244

 

 

 114

 

 1997

11/05

  Yorkshire, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Riverpark Shopping Center   I & IIA

 

 36,434

 

 

 11,800

 

 41,878

 

 

 55

 

 11,800

 

 41,933

 

 

 53,733

 

 

 2,562

 

2003 & 2006

04/06 & 09/06

  Sugarland, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rivery Town Crossing

 

 8,018

 

 

 2,900

 

 6,814

 

 

 (19)

 

 2,900

 

 6,795

 

 

 9,695

 

 

 314

 

 2005

10/06

  Georgetown, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Royal Oaks Village II

 

 8,550

 

 

 2,200

 

 11,859

 

 

 (83)

 

 2,200

 

 11,776

 

 

 13,976

 

 

 939

 

 2004-2005

11/05

  Houston, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Saucon Valley Square

 

 8,851

 

 

 3,200

 

 12,642

 

 

 102

 

 3,200

 

 12,744

 

 

 15,944

 

 

 1,556

 

 1999

09/04

  Bethlehem, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shaws Supermarket

 

 6,450

 

 

 2,700

 

 11,532

 

 

 (298)

 

 2,700

 

 11,234

 

 

 13,934

 

 

 1,702

 

 1995

12/03

  New Britain, CT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shoppes at Lake Andrew

 

 15,657

 

 

 4,000

 

 22,996

 

 

 18

 

 4,000

 

 23,014

 

 

 27,014

 

 

 2,530

 

 2003

12/04

  I & II , Viera, FL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shoppes at Park West

 

 6,655

 

 

 2,240

 

 9,357

 

 

 (93)

 

 2,240

 

 9,264

 

 

 11,504

 

 

 1,075

 

 2004

11/04

  Mt. Pleasant, SC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shoppes at Quarterfield

 

 6,067

 

 

 2,190

 

 8,840

 

 

 31

 

 2,190

 

 8,871

 

 

 11,061

 

 

 1,272

 

 1999

01/04

  Severn, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shoppes of New Hope

 

 7,179

 

 

 1,350

 

 11,045

 

 

 (117)

 

 1,350

 

 10,928

 

 

 12,278

 

 

 1,471

 

 2004

07/04

  Dallas, GA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shoppes of Prominence

  Point I & II , Canton, GA

 

 11,418

 

 

 3,650

 

 12,652

 

 

 (116)

 

 3,650

 

 12,536

 

 

 16,186

 

 

 1,549

 

2004 & 2005

06/04 & 09/05

Shoppes of Warner Robins

 

 7,286

 

 

 1,110

 

 11,258

 

 

 (12)

 

 1,110

 

 11,246

 

 

 12,356

 

 

 1,045

 

 2004

06/05

  Warner Robins, GA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shops at 5

 

 40,179

 

 

 8,350

 

 59,570

 

 

 186

 

 8,350

 

 59,756

 

 

 68,106

 

 

 5,656

 

 2005

06/05

  Plymouth, MA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



96


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC .

Schedule III

Real Estate and Accumulated Depreciation
December 31, 2007






The Shops at Boardwalk

 

 20,150

 

 

 5,000

 

 30,540

 

 

 (228)

 

 5,000

 

 30,312

 

 

 35,312

 

 

 3,897

 

 2003-2004

07/04

  Kansas City, MO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shops at Forest Commons

 

 5,035

 

 

 1,050

 

 6,133

 

 

 (34)

 

 1,050

 

 6,099

 

 

 7,149

 

 

 688

 

 2002

12/04

  Round Rock, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shops at Legacy

 

  -   

 

 

 8,800

 

 108,940

 

 

 6,041

 

 8,800

 

 114,981

 

 

 123,781

 

 

 2,377

 

 2002

06/07

  Plano, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shops at Park Place

 

 13,127

 

 

 9,096

 

 13,175

 

 

 476

 

 9,096

 

 13,651

 

 

 22,747

 

 

 2,156

 

 2001

10/03

  Plano, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

South Towne Crossing

 

 8,818

 

 

 1,600

 

 9,391

 

 

 1,256

 

 1,600

 

 10,647

 

 

 12,247

 

 

 547

 

 2005

06/06

  Burleson, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Southgate Plaza

 

 6,740

 

 

 2,200

 

 9,229

 

 

  -   

 

 2,200

 

 9,229

 

 

 11,429

 

 

 958

 

 1998-2002

03/05

  Heath, OH

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Southlake Town Square I – IV
 Southlake, TX

 140,661

 

 

 37,350

 

 171,465

 

 

 5,928

 

 37,350

 

 177,393

 

 

 214,743

 

 

 13,962

 

 1998-2004 & 2007

 12/04 & 05/07

Southpark Meadows

 

 12,663

 

 

 6,250

 

 13,720

 

 

 5,564

 

 6,363

 

 19,171

 

 

 25,534

 

 

 1,477

 

 2004

07/05

  Austin, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Southpark Meadows II

 

  -   

 

 

 25,000

 

 57,865

 

 

 (2,103)

 

 25,000

 

 55,762

 

 

 80,762

 

 

 1,618

 

 2006-2007

03/07

  Austin, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Southwest Crossing

 

 14,691

 

 

 4,750

 

 19,679

 

 

 152

 

 4,750

 

 19,831

 

 

 24,581

 

 

 1,872

 

 1999

06/05

  Fort Worth, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sprint Data Center

 

 52,800

 

 

 4,800

 

 85,348

 

 

 1

 

 4,800

 

 85,349

 

 

 90,149

 

 

 6,975

 

 2001

09/05

  Santa Clara, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stanley Works/Mac Tools

 

 5,500

 

 

 1,900

 

 7,624

 

 

  -   

 

 1,900

 

 7,624

 

 

 9,524

 

 

 778

 

 2004

01/05

  Westerville, OH

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stateline Station

 

 17,600

 

 

 6,500

 

 23,780

 

 

 (480)

 

 6,500

 

 23,300

 

 

 29,800

 

 

 2,443

 

 2003-2004

03/05

  Kansas City, MO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stilesboro Oaks

 

 6,952

 

 

 2,200

 

 9,426

 

 

 (45)

 

 2,200

 

 9,381

 

 

 11,581

 

 

 1,032

 

 1997

12/04

  Acworth, GA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stonebridge Plaza

 

 4,278

 

 

 1,000

 

 5,783

 

 

 52

 

 1,000

 

 5,835

 

 

 6,835

 

 

 517

 

 1997

08/05

  McKinney, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stony Creek
 Noblesville, IN

 

 18,441

 

 

 8,635

 

 22,671

 

 

 179

 

 8,635

 

 22,850

 

 

 31,485

 

 

 3,189

 

2003 & 2005

12/03 & 01/05

Stop & Shop
  Beekman, NY

 

 7,349

 

 

 2,650

 

 11,491

 

 

 6

 

 2,650

 

 11,497

 

 

 14,147

 

 

 911

 

Renov: 05

11/05

Suntree Square

 

 8,975

 

 

 2,535

 

 12,574

 

 

 21

 

 2,535

 

 12,595

 

 

 15,130

 

 

 347

 

 2001

04/07

  Southlake, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Target South Center

 

 7,257

 

 

 2,300

 

 8,760

 

 

 5

 

 2,300

 

 8,765

 

 

 11,065

 

 

 696

 

 1999

11/05

  Austin, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



97


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC .

Schedule III

Real Estate and Accumulated Depreciation
December 31, 2007






Tim Horton Donut Shop

 

  -   

 

 

 212

 

 30

 

 

  -   

 

 212

 

 30

 

 

 242

 

 

 4

 

 2004

11/05

  Canandaigua, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tollgate Marketplace

 

 39,765

 

 

 8,700

 

 61,247

 

 

 57

 

 8,700

 

 61,304

 

 

 70,004

 

 

 7,649

 

 1979/1994

07/04

  Bel Air, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Town Square Plaza

 

 18,715

 

 

 9,700

 

 18,264

 

 

 1,481

 

 9,700

 

 19,745

 

 

 29,445

 

 

 1,429

 

 2004

12/05

  Pottstown, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Towson Circle

 

 15,648

 

 

 9,050

 

 17,840

 

 

 2,766

 

 9,050

 

 20,606

 

 

 29,656

 

 

 2,840

 

 1998

07/04

  Towson, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Traveler's Office Building

 

 4,865

 

 

 650

 

 7,001

 

 

 60

 

 650

 

 7,061

 

 

 7,711

 

 

 494

 

 2005

01/06

  Knoxville, TN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trenton Crossing

 

 19,307

 

 

 8,180

 

 19,262

 

 

 3,188

 

 8,180

 

 22,450

 

 

 30,630

 

 

 2,125

 

 2003

02/05

  McAllen, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

University Square

 

 29,965

 

 

 1,770

 

 48,068

 

 

(22,208)

 

 1,770

 

 25,860

 

 

 27,630

 

 

 606

 

 2003

05/05

  University Heights, OH

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

University Town Center

 

 5,808

 

 

  -   

 

 9,557

 

 

 55

 

  -   

 

 9,612

 

 

 9,612

 

 

 1,085

 

 2002

11/04

  Tuscaloosa, AL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vail Ranch Plaza

 

 13,489

 

 

 6,200

 

 16,275

 

 

 (16)

 

 6,200

 

 16,259

 

 

 22,459

 

 

 1,590

 

 2004-2005

04/05

  Temecula, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Village at Quail Springs

 

 5,740

 

 

 3,335

 

 7,766

 

 

  -   

 

 3,335

 

 7,766

 

 

 11,101

 

 

 827

 

 2003-2004

02/05

  Oklahoma City, OK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Village Shoppes at Gainsville

 25,148

 

 

 4,450

 

 36,592

 

 

 (43)

 

 4,450

 

 36,549

 

 

 40,999

 

 

 3,013

 

 2004

09/05

  Gainsville, GA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Village Shoppes at Simonton

 7,562

 

 

 2,200

 

 10,874

 

 

 (227)

 

 2,200

 

 10,647

 

 

 12,847

 

 

 1,346

 

 2004

08/04

  Lawrenceville, GA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Walgreens

 

 3,218

 

 

 450

 

 5,074

 

 

  -   

 

 450

 

 5,074

 

 

 5,524

 

 

 488

 

 2000

04/05

  Northwoods, MO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Walgreens

 

 2,600

 

 

 550

 

 3,580

 

 

  -   

 

 550

 

 3,580

 

 

 4,130

 

 

 361

 

 1999

04/05

  West Allis, WI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wal-Mart Supercenter

 

  -   

 

 

 1,756

 

 10,914

 

 

  -   

 

 1,756

 

 10,914

 

 

 12,670

 

 

 1,367

 

 1999

07/04

  Blytheville, AR

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wal-Mart Supercenter

 

 6,089

 

 

 2,397

 

 8,089

 

 

 1

 

 2,397

 

 8,090

 

 

 10,487

 

 

 1,013

 

 1997

08/04

  Jonesboro, AR

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Walter's Crossing

 

 20,626

 

 

 14,500

 

 16,914

 

 

 21

 

 14,500

 

 16,935

 

 

 31,435

 

 

 876

 

 2005

07/06

  Tampa, FL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Watauga Pavillion

 

 19,617

 

 

 5,185

 

 27,504

 

 

 20

 

 5,185

 

 27,524

 

 

 32,709

 

 

 3,600

 

 2003-2004

05/04

  Watauga, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



98


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC .

Schedule III

Real Estate and Accumulated Depreciation
December 31, 2007






West Town Market

 

 6,048

 

 

 1,170

 

 10,488

 

 

 (4)

 

 1,170

 

 10,484

 

 

 11,654

 

 

 959

 

 2004

06/05

  Fort Mill, SC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wickes

 

 5,433

 

 

 3,200

 

 5,530

 

 

 5

 

 3,200

 

 5,535

 

 

 8,735

 

 

 436

 

 2005

10/05

  Murrieta, CA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wickes

 

 4,964

 

 

 2,400

 

 5,612

 

 

  -   

 

 2,400

 

 5,612

 

 

 8,012

 

 

 531

 

 2005

05/05

  Naperville, IL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wild Oats Market

 

 7,469

 

 

 3,800

 

 9,155

 

 

  -   

 

 3,800

 

 9,155

 

 

 12,955

 

 

 801

 

 2000

07/05

  Hinsdale, IL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wilton Square

 

 28,560

 

 

 8,200

 

 35,538

 

 

 13

 

 8,200

 

 35,551

 

 

 43,751

 

 

 3,149

 

 2000

07/05

  Saratoga Springs, NY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Winchester Commons

 

 7,235

 

 

 4,400

 

 7,471

 

 

 (51)

 

 4,400

 

 7,420

 

 

 11,820

 

 

 864

 

 1999

11/04

  Memphis, TN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wrangler

 

 11,300

 

 

 1,219

 

 16,250

 

 

 (365)

 

 1,219

 

 15,885

 

 

 17,104

 

 

 2,010

 

 1993

07/04

  El Paso, TX

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Zurich Towers

 

 81,420

 

 

 7,900

 

 121,312

 

 

 7

 

 7,900

 

 121,319

 

 

 129,219

 

 

 13,685

 

 1986-1990

11/04

  Schaumburg, IL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subtotal Wholly Owned and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Consolidated Joint Ventures

4,058,757

 

 

1,455,118

 

5,446,236

 

 

206,866

 

1,454,531

 

5,653,689

 

 

7,108,220

 

 

547,953

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Five Britomart Buildings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Auckland, New Zeland

 

- 

 

 

14,915

 

- 

 

 

- 

 

14,915

 

- 

 

 

14,915

 

 

- 

 

1900-1946

12/07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Developments in Progress

 

 54,363

 

 

 53,286

 

98,686

 

 

  -   

 

 53,286

 

98,686

 

 

 151,972

 

 

  -   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

4,113,120

 

 

1,523,319

 

5,544,922

 

 

206,866

 

1,522,732

 

5,752,375

 

 

7,275,107

 

 

547,953

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





99


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC .

Schedule III (continued)

Real Estate and Accumulated Depreciation
December 31, 2007




Notes:


(A)

The initial cost to the Company represents the original purchase price of the property, including amounts incurred subsequent to acquisition which were contemplated at the time the property was acquired.


(B)

The aggregate cost of real estate owned at December 31, 2007 for Federal income tax purposes was approximately $7,628,695 (unaudited).


(C)

Adjustments to basis include payments received under master lease agreements as well as additional tangible costs associated with the investment properties, including any earnout of tenant space.


(D)

Reconciliation of real estate owned:

[IWEST10K123107FINAL046.GIF]  

(E)

Reconciliation of accumulated depreciation:

[IWEST10K123107FINAL048.GIF]  

(1)

2006 additions include adjustments to building and improvements and below market lease intangibles related to the cumulative effect of the adoption of SAB 108, as described in Note 2 to the consolidated financial statements.



100



















MS INLAND FUND, LLC

Financial Statements

Period from April 27, 2007 (Inception) to December 31, 2007

(With Independent Registered Public Accounting Firm’s Report Thereon)




101




Report of Independent Registered Public Accounting Firm

The Members

MS Inland Fund L.L.C.:

We have audited the accompanying balance sheet of MS Inland Fund L.L.C. (the Company) as of December 31, 2007, and the related  statements of operations, members’ equity, and cash flows for the period from April 27, 2007 (inception) to December 31, 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of MS Inland Fund L.L.C. as of December 31, 2007, and the results of its operations and its cash flows for the period from April 27, 2007 (inception) to December 31, 2007 in conformity with U.S. generally accepted accounting principles.


KPMG LLP



Chicago, Illinois

March 31, 2008




102




MS INLAND FUND, LLC

BALANCE SHEET


December 31, 2007

(In thousands)



  [IWEST10K123107FINAL050.GIF]









See accompanying notes to financial statements.



103




MS INLAND FUND, LLC

STATEMENT OF OPERATIONS


Period from April 27, 2007 (Inception) to December 31, 2007

(In thousands)




[IWEST10K123107FINAL052.GIF]
























See accompanying notes to financial statements.



104




MS INLAND FUND, LLC

STATEMENT OF MEMBERS’ EQUITY


Period from April 27, 2007 (Inception) to December 31, 2007

(In thousands)




  [IWEST10K123107FINAL054.GIF]





























See accompanying notes to financial statements.



105




MS INLAND FUND, LLC

STATEMENT OF CASH FLOWS


Period from April 27, 2007 (Inception) to December 31, 2007

(In thousands)


[IWEST10K123107FINAL056.GIF]


See accompanying notes to financial statements.



106






(1)

Organization and Basis of Accounting

MS Inland Fund, LLC (the Company) was formed on April 27, 2007.  The Company is a strategic joint venture formed with Inland Western Retail Real Estate Trust, Inc. (IWRRETI) and The Florida Retirement System Trust Fund (Florida) acting by and through the State Board of Administration of the State of Florida.  The purpose of the Company is to acquire and manage targeted retail properties in major metropolitan areas of the United States.  Upon formation, the Company initially acquired seven neighborhood retail and community centers (Huebner Oaks, Lincoln Park, Southlake Corners, Commons at Royal Palm, Gardiner Manor Mall, John’s Creek Village and Oswego Commons), which were contributed to the Company by IWRRETI (Existing Portfolio), with an estimated fair value of approximately $336,000 and net equity value after debt assumption of approximately $147,000.  Under the terms of the joint venture operating agreement, Florida contributed 80%, or approximately $117,800 of the equity necessary to purchase the properties and IWRRETI contributed the remaining 20%, or approximately $29,500.  Accordingly, under the terms of the agreement, the profits and losses of the Company and the cash flows of the Company are split 80% and 20% between Florida and IWRRETI, respectively, except for the interest earned on certain funds not distributed to IWRRETI (BIC funds).

The Company retains the BIC funds in a bank account segregated from funds from the operations of the Company and are reflected as restricted cash in the accompanying balance sheet.  Loans and/or distributions from the BIC funds are determined by a formula, as defined, in the joint venture operating agreement.  The interest income earned on the account in which these funds are held is allocable and distributable 95.0% to IWRRETI and 5.0% to Florida.  In addition, the interest income earned by the Company on any notes receivable that the Company loans to IWRRETI from the BIC funds is allocable in the same manner.  Included in the BIC funds was $45,000, representing IWRRETI’s future capital contributions committed for future property acquisitions.  

Cash flow from the operations of the properties is to be distributed to Florida and IWRRETI according to their percentage interests, currently 80% and 20%, respectively.  Cash flow from a major capital event with respect to the Existing Portfolio, is to be distributed in the following order:

·

First, to IWRRETI, in an amount equal to the balance of the BIC funds at such time; and

·

Second, to Florida and IWRRETI, to the extent of and in proportion to any accrued and unpaid interest on Priority Loans, as defined; and

·

Third, to Florida and IWRRETI, to the extent of an in proportion to any outstanding principal balances on Priority Loans, as defined, and;

·

Fourth, to Florida and IWRRETI in proportion to their percentage interest, currently 80% and 20%, respectively.

Upon the sale or disposition of all of the Existing Portfolio, if it is determined that Florida received a rate of return on its equity in excess of 11%, IWRRETI shall be entitled to 20% of such excess as computed.  Florida shall repay such amount to the Company within 30 days after the computation.

Cash flow from a major capital event with respect to properties acquired or contributed subsequent to the Existing Portfolio, is to be distributed in the following order:

·

First, to IWRRETI, in an amount equal to the balance of the BIC funds at such time; and

·

Second, to Florida and IWRRETI to the extent of and in proportion to any accrued and unpaid interest on Priority Loans, as defined; and

·

Third, to Florida and IWRRETI to the extent of and in proportion to any outstanding principal balances on Priority Loans, as defined; and

·

Thereafter as follows:

(1)

to Florida and IWRRETI in accordance with their respective ownership interests until each has realized a cumulative 11% return as defined; and



107






(2)

thereafter 80% to Florida and IWRRETI in accordance with their respective ownership interests and 20% to IWRRETI.

Upon final liquidation of all of the Company’s assets, IWRRETI may be required to pay to Florida the lessor of an amount, if necessary, to provide Florida with an overall 11% return or the sum of Excess Payments, as defined, previously received by IWRRETI.

IWRRETI is the managing member of the Company and therefore, manages the day-to-day business.  IWRRETI earns fees for providing property management, acquisition and leasing services to the Company.  Major decisions require unanimous approval of the Executive Committee, comprised of three representatives of Florida and two representatives of IWRRETI.

The Company is treated as a Partnership for federal and state income tax purposes.  Therefore, no provision has been made for income taxes as the liability for such taxes is that of the members.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  Actual results could differ from those estimates.

Revenue Recognition: The Company commences revenue recognition on its leases based on a number of factors.  In most cases, revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of the leased asset.  Generally, this occurs on the lease commencement date.  The determination of who is the owner, for accounting purposes, of the tenant improvements determines the nature of the leased asset and when revenue recognition under a lease begins.  If the Company is the owner, for accounting purposes, of the tenant improvements, then the leased asset is the finished space and revenue recognition begins when the lessee takes possession of the finished space, typically when the improvements are substantially complete.  If the Company concludes it is not the owner, for accounting purposes, of the tenant improvements (the lessee is the owner), then the leased asset is the unimproved space and any tenant improvement allowances funded under the lease are treated as lease incentives which reduces revenue recognized over the term of the lease.  In these circumstances, the Company begins revenue recognition when the lessee takes possession of the unimproved space for the lessee to construct their own improvements.  The Company considers a number of different factors to evaluate whether it or the lessee is the owner of the tenant improvements for accounting purposes.  These factors include:

·

whether the lease stipulates how and on what a tenant improvement allowance may be spent;

·

whether the tenant or landlord retains legal title to the improvements;

·

the uniqueness of the improvements;

·

the expected economic life of the tenant improvements relative to the length of the lease; and

·

who constructs or directs the construction of the improvements.

The determination of who owns the tenant improvements, for accounting purposes, is subject to significant judgment.  In making that determination, the Company considers all of the above factors.  No one factor, however, necessarily establishes its determination.

Rental income is recognized on a straight-line basis over the term of each lease. The difference between rental income earned on a straight-line basis and the cash rent due under the provisions of the lease agreements is recorded as deferred rent receivable and is included as a component of accounts and rents receivable in the accompanying balance sheet.

Reimbursements from tenants for recoverable real estate tax and operating expenses are accrued as revenue in the period the applicable expenditures are incurred.  The Company makes certain assumptions and judgments in estimating the reimbursements at the end of each reporting period.



108






The Company records lease termination income if there is a signed termination letter agreement, all of the conditions of the agreement have been met, and the tenant is no longer occupying the property. Upon early lease termination, the Company provides for losses related to unrecovered intangibles and other assets.

Staff Accounting Bulletin ("SAB") No. 101: Revenue Recognition in Financial Statements , provides that a lessor should defer recognition of contingent rental income (i.e. percentage/excess rent) until the specified target (i.e. breakpoint) that triggers the contingent rental income is achieved.  The Company records percentage rental revenue in accordance with SAB 101.

In conjunction with certain acquisitions, the Company receives payments under master lease agreements pertaining to certain non-revenue producing spaces either at the time of, or subsequent to, the purchase of these properties.  Upon receipt of the payments, the receipts are recorded as a reduction in the purchase price of the related properties rather than as rental income.  These master leases were established at the time of purchase in order to mitigate the potential negative effects of loss of rent and expense reimbursements.  Master lease payments are received through a draw of funds escrowed at the time of purchase and generally cover a period from three months to three years.  These funds may be released to either the Company or the seller when certain leasing conditions are met.  

The Company accounts for profit recognition on sales of real estate in accordance with Financial Accounting Standards Board’s (“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 66: Accounting for Sales of Real Estate .  In summary, profits from sales will not be recognized under the full accrual method by the Company unless a sale is consummated; the buyer’s initial and continuing investments are adequate to demonstrate a commitment to pay for the property; the Company’s receivable, if applicable, is not subject to future subordination; the Company has transferred to the buyer the usual risks and rewards of ownership; and the Company does not have substantial continuing involvement with the property.

Cash and Cash Equivalents: The Company considers all demand deposits, money market accounts and investments in certificates of deposit and repurchase agreements purchased with a maturity of three months or less, at the date of purchase, to be cash equivalents. The Company maintains its cash and cash equivalents at financial institutions.  The combined account balances at one or more institutions periodically exceed the Federal Depository Insurance Corporation ("FDIC") insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage.  The Company believes that the risk is not significant, as the Company does not anticipate the financial institutions' non-performance.

Restricted Escrows :  Restricted escrows include funds received by third party escrow agents from sellers pertaining to master lease agreements and is included in other assets on the balance sheet.

Real Estate: The investment property contribution was recorded in an amount equal to 80% of the fair value of the properties at the date of contribution plus 20% of IWRRETI’s historical cost basis.  Ordinary repairs and maintenance are expensed as incurred.

The Company allocates the purchase price of each acquired investment property between land, building and improvements, acquired above market and below market leases, in-place lease value, any assumed financing that is determined to be above or below market terms and the value of the customer relationships, if any. The allocation of the purchase price is an area that requires judgment and significant estimates.  The Company uses the information contained in the independent appraisal obtained upon acquisition of each property as the primary basis for the allocation to land and building and improvements. The Company determines whether any financing assumed is above or below market based upon comparison to similar financing terms for similar investment properties.  The Company allocates a portion of the purchase price to the estimated acquired in-place lease costs based on estimated lease execution costs for similar leases as well as lost rent payments during an assumed lease-up period when calculating as-if-vacant fair values.  The Company considers various factors including geographic location and size of leased space.  The Company also evaluates each significant acquired lease based upon current market rates at the acquisition date and considers various factors including geographical location, size and location of leased space within the investment property, tenant profile, and the credit risk of the tenant in determining whether the acquired lease is above or below market.  If an acquired lease is determined to be above or below market, the Company allocates a portion of the purchase price to such above or below market acquired lease based upon the present value of the difference between the contractual lease rate and the estimated market rate.  For



109






below market leases with fixed rate renewals, renewal periods are included in the calculation of below market lease values. The determination of the discount rate used in the present value calculation is based upon the "risk free rate." This discount rate is a significant factor in determining the market valuation which requires the Company's judgment of subjective factors such as market knowledge, economics, demographics, location, visibility, age and physical condition of the property.

The Company allocated, as part of its acquisition of properties in 2007, $4,121 to the above market lease intangibles, $5,826 to the below market lease intangibles and $24,298 to the acquired in-place lease intangibles.  

Acquired above and below market leases are amortized on a straight-line basis over the life of the related leases as an adjustment to rental income. Acquired in-place leases are amortized over the average lease term as a component of amortization expense.

Amortization pertaining to the above market lease intangibles of $426 was recorded as a reduction to rental income for the period ended December 31, 2007.  Amortization pertaining to the below market lease intangibles of $625 was recorded as an increase to rental income for the period ended December 31, 2007.  The Company incurred amortization expense pertaining to acquired lease intangibles of $2,405 for the period ended December 31, 2007.

The table below presents the amortization during the next five years related to the acquired above and below market lease costs and acquired in-place lease intangibles for the properties owned at December 31, 2007.

[IWEST10K123107FINAL058.GIF]

Depreciation expense is computed using the straight-line method.  Buildings and improvements are depreciated based upon estimated useful lives of 30 years for buildings and associated improvements and 15 years for site improvements and most other capital improvements. Tenant improvements and leasing fees are amortized on a straight-line basis over the life of the related lease as a component of depreciation and amortization expense.

Loan fees are amortized using the effective yield method over the life of the related loans as a component of interest expense.

In accordance with the SFAS No. 144: Accounting for the Impairment or Disposal of Long-Lived Assets, the Company performs a quarterly analysis to identify impairment indicators to ensure that each investment property's carrying value does not exceed its fair value. If an impairment indicator is present, the Company performs an undiscounted cash flow valuation analysis based upon many factors which require difficult, complex or subjective judgments to be made.  Such assumptions include projecting vacancy rates, rental rates, operating expenses, lease terms, tenant financial strength, economy, demographics, property location, capital expenditures and sales value among other assumptions to be made upon valuing each property.  This valuation is sensitive to the actual results of any of these uncertain factors, either individually or taken as a whole.  Based upon the Company's judgment, no impairment was warranted for the period ended December 31, 2007.  

Note Receivable: On June 14, 2007, IWRRETI borrowed $50,000 from the BIC funds as permitted.  The note bears interest at 4.8% and is to be repaid on the earlier to occur of (i) an event of default, as defined, or (ii) upon termination of the Company’s operating agreement.  IWRRETI has the right to prepay the note without penalty.

A note is considered impaired in accordance with SFAS No. 114: Accounting by Creditors for Impairment of a Loan .  Pursuant to SFAS No. 114, a note is impaired if it is probable that the Company will not collect all principal and interest contractually due.  The impairment is measured based on the present value of expected future cash flows discounted at the



110






note's effective interest rate.  The Company does not accrue interest when a note is considered impaired.  When ultimate collectability of the principal balance of the impaired note is in doubt, all cash receipts on the impaired note are applied to reduce the principal amount of the note until the principal has been recovered and are recognized as interest income thereafter.  Based upon the Company's judgment, the note receivable was not impaired as of December 31, 2007.

Allowance for Doubtful Accounts: The Company periodically evaluates the collectability of amounts due from tenants and maintains an allowance for doubtful accounts for estimated losses resulting from the inability of tenants to make required payments under the lease agreements.  The Company also maintains an allowance for receivables arising from the straight-lining of rents.  This receivable arises from revenue recognized in excess of amounts currently due under the lease agreements.  Management exercises judgment in establishing these allowances and considers payment history and current credit status in developing these estimates.

The fair value of mortgages payable, is the amount at which the instrument could be exchanged in a current transaction between willing parties.  The fair value of the Company’s mortgages approximated their book value at December 31, 2007.  The Company estimates the fair value of its mortgages payable by discounting the future cash flows of each instrument at rates currently offered to the Company for similar debt instruments of comparable maturities by the Company’s lenders.

(2)

Mortgages Payable

The Company’s mortgages payable are secured by its investment properties and consist of the following at December 31, 2007:

Property Name and Location

 

Interest Rate% (a)

 

Maturity Date

Principal
Balance

Huebner Oaks, San Antonio, TX

 

4.20

 

07/01/2010

$

31,723 

 

Huebner Oaks, San Antonio, TX

 

5.86

 

07/01/2010

 

16,277 

 

Oswego Commons, Oswego, IL

 

4.75

 

12/11/2011

 

19,262 

 

Lincoln Park, Dallas, TX

 

4.61

 

11/01/2009

 

26,153 

 

John’s Creek Village, Duluth, GA

 

5.10

 

08/01/2009

 

23,300 

 

Gardiner Manor Mall, Islip, NY

 

5.35

 

03/01/2012

 

36,300 

 

Commons at Royal Palm, Village of Royal Palm Beach, FL

 

6.88

 

11/01/2012

 

14,020 

 

Southlake Corners, Southlake, TX

 

5.54

 

01/01/2012

 

20,625 

 

 

 

 

 

 

 

187,660 

 

Discount on debt assumed at acquisition, net of amortization

 

 

 

 

 

(4,045)

 

 

 

 

 

 

 

$

183,615 

 

(a)  All mortgages payable are at fixed rates.

As of December 31, 2007, the required future principal payments on the Company’s mortgages payable over the next five years are as follows:

Year

Principal
Payments

2008

$

196

 

2009

 

49,664

 

2010

 

48,229

 

2011

 

19,507

 

2012

 

70,065

 

Thereafter

 

-

 

 

$

187,660

 

 

 

 

 




111






(3)

Transactions with Related Parties

The Company will pay IWRRETI an acquisition fee of 0.35% for the gross purchase price for each property.  There were no such fees paid during the period ended December 31, 2007.  

IWRRETI serves as property manager, and as such will receive from each property a property management fee equal to 4.5% of the actual monthly gross income generated by each property, provided the leases for the tenants of each property allow for full recovery of the 4.5% management fee as a pass-through expense.  In the event any such leases do not allow for recovery of any or all of the property management fee, then the property management fee payable shall be 3.5% of the actual monthly gross income generated by the lease in question.  For the period ended December 31, 2007, $786 in management fees were paid to IWRRETI.

Included within this property management fee shall be all legal expenses for leases with any national tenants, the cost of insurance placement, construction supervision of all tenant’s tenant improvement build out, all in-house design work for marketing brochures, all accounting and reporting costs and expenses.

The Company will pay IWRRETI leasing commissions consistent with market rates, as the same are then prevailing in the geographic area in which the potential property is located (when an outside broker is involved, the payout is the market rate plus 50%, and on a renewal, the payout is 50%).  There were no such fees paid for the period ended December 31, 2007.  

IWRRETI will be entitled to receive a disposition fee of $30 for each property (excluding the existing properties), if the property management fee paid to IWRRETI by the applicable property is 3.5%.  In the aggregate, such disposition fees shall not exceed $1,000.  There were no such fees paid during the period ended December 31, 2007.  

In the event that IWRRETI’s brokerage division is engaged by the Company to sell the portfolio or a property to a third party on behalf of the Company, the sales commission will be negotiated at that time based upon then-prevailing market rates.

IWRRETI will receive an administration fee of 0.25% of total acquisition cost for each property acquired.  This is to reimburse IWRRETI for the costs of any legal costs for the preparation of the purchase and sale documents for acquisition and dispositions, tax appeals, and the cost of placing all mortgage debt on the properties, to the extent such costs are incurred by IWRRETI and not otherwise reimbursed to IWRRETI.  There were no such fees paid during the period ended December 31, 2007.  

(4)

Leases

Operating Leases

Minimum lease payments under operating leases to be received in the future, excluding rental income under master lease agreements and assuming no expiring leases are renewed are as follows:

Year

 

Minimum Lease
Payments

 

2008

$

23,627

 

2009

 

21,090

 

2010

 

19,121

 

2011

 

17,374

 

2012

 

15,352

 

Thereafter

 

58,842

 

 

$

685,506

 

 

 

 

 


Certain tenant leases contain provisions providing for "stepped" rent increases.  GAAP requires the Company to record rental income for the period of occupancy using the effective monthly rent, which is the average monthly rent for the



112






entire period of occupancy during the term of the lease.  The accompanying financial statements include an increase of $382 of rental income for the period of occupancy for which stepped rent increases apply and are recorded in accounts and rents receivable as of and for the period ended December 31, 2007.  The Company anticipates collecting these amounts over the terms of the leases as scheduled rent payments are made.

Master Lease Agreements

In conjunction with certain acquisitions, we receive payments under master lease agreements pertaining to some non-revenue producing spaces at the time of purchase, for periods ranging from one to three years after the date of the purchase or until the spaces are leased.  GAAP requires that as these payments are received, they be recorded as a reduction in the purchase price of the respective property rather than as rental income.  The cumulative amount of such payments was $130 as of December 31, 2007.

(5)

Commitments and Contingencies

The Company is subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business.  While the resolution of these matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters will not have a material adverse effect on the financial statements of the Company.




113






Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure


Not applicable.


Item 9A.    Controls and Procedures


Evaluation of Disclosure Controls and Procedures


We have established disclosure controls and procedures to ensure that material information relating us, including our consolidated subsidiaries, is made known to the officers who certify our financial reports and to the members of senior management and the Board of Directors.


Based on management’s evaluation as of December 31, 2007, our chief executive officer, chief operating officer/chief financial officer and chief accounting officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective to ensure that the information required to be disclosed by us in our reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.


Management’s Report on Internal Control Over Financial Reporting  


Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control – Integrated Framework , our management concluded that our internal control over financial reporting was effective as of December 31, 2007.  The effectiveness of our internal control over financial reporting as of December 31, 2007 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which is included herein.

 

Changes in Internal Controls


There were no changes to our internal controls over financial reporting during the fiscal quarter ended December 31, 2007 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.


Item 9B.  Other Information


None.



114






PART III


Item 10.  Directors, Executive Officers and Corporate Governance


The information required by this Item 10 will be incorporated by reference from the section captioned "Proposal No. 1 - Election of Directors and Executive Officers" in the Company's definitive proxy statement for its 2008 Annual Meeting of Stockholders.


Item 11.  Executive Compensation


The information required by this Item 11 will be incorporated by reference from the section captioned "Executive Compensation" in the Company's definitive proxy statement for its 2008 Annual Meeting of Stockholders.


Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters


The information required by this Item 12 will be incorporated by reference from the section captioned "Certain Relationships and Related Transactions" and "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" in the Company's definitive proxy statement for its 2008 Annual Meeting of Stockholders.


Item 13.   Certain Relationships and Related Transactions, and Director Independence


The information required by this Item 13 will be incorporated by reference from the section captioned "Certain Relationships and Related Transactions" in the Company's definitive proxy statement for its 2008 Annual Meeting of Stockholders.


Item 14.   Principal Accounting Fees and Services


The information required by this Item 14 will be incorporated by reference from the section captioned "Principal Accounting Fees and Services" in the Company's definitive Proxy Statement for its 2008 Annual Meeting of Stockholders.


PART IV


Item 15.  Exhibits and Financial Statement Schedules


(a)  List of documents filed:


(1)

The consolidated financial statements of the Company are set forth in the report in Item 8.  


(2)

Financial Statement Schedules:


Financial statement schedule for the year ended December 31, 2007 is submitted herewith.


 

Page

Valuation and Qualifying Accounts (Schedule II)

82

Real Estate and Accumulated Depreciation (Schedule III)

83


(3)

MS Inland Fund, LLC Financial Statements are included in the report submitted herewith.

Schedules not filed:


All schedules other than those indicated in the index have been omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes.



115








  Exhibit No.

Description

3.1

Third Articles of Amendment and Restatement of Inland Western Retail Real Estate Trust , Inc. (Included as Exhibit 3.1 to the Company’s Annual Report / Amended on Form 10-K/A for the year ended December 31, 2006 filed on April 27, 2007 [File No. 000-5119] and incorporated herein by reference.)

3.2.1

Second Amended and Restated Bylaws of Inland Western Retail Real Estate Trust, Inc. as of February 11, 2005, (Included as Exhibit 3.2.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004 and filed on March 7, 2005 [File No. 333-103799] incorporated herein by reference).

4.1

Specimen Certificate for the Shares (Included as Exhibit 4.1 to the Company’s Registration Statement on Form S-11 filed on March 13, 2003 [File No. 333-103799] and incorporated herein by reference).

10.5

Independent Director Stock Option plan (Included as Exhibit 10.5 to the Company’s Registration Statement on form S-11 filed on March 13, 2003 [File No. 333-103799] and incorporated herein by reference).

10.517

Amended and Restated Distribution Reinvestment Program of Inland Western Retail Real Estate Trust, Inc. (Included as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on July 31, 2006 [File No. 000-51199] and incorporated herein by reference).

10.518

Amended and Restated Share Repurchase Program of Inland Western Retail Real Estate Trust, Inc. (Included as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on December 15, 2006 [File No. 000-51199] and incorporated herein by reference).

10.519

Operating Agreement of MS Inland Fund, LLC (Included as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 2, 2007 [File No. 000-51199] and incorporated herein by reference).

10.520

Agreement and Plan of Merger by and among Inland Western Retail Real Estate Trust, Inc., IWEST Acquisition 1 Inc., IWEST Acquisition 2, Inc., IWEST Acquisition 3, Inc., IWEST Acquisition 4, Inc., Inland Western Real Estate Advisory Services Inc., Inland Southwest Management Crop., Inland Northwest Management Corp., Inland Western Management Corp., Inland Western Real Estate Investment Corporation and IWEST Merger Agent LLC (Included as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 17, 2007 [File No. 000-51199] and incorporated herein by reference).

10.521

Credit Agreement dated as of October 15, 2007 among Inland Western Real Estate Trust, Inc. as Borrower and KeyBanc National Association as Administrative Agent, KeyBanc Capital Markets as Lead Arranger and Book Manager, and Norddeutsche Landesbank Girozentrale New York Branch or Cayman Island Branch as Document Agent, and RBS Citizens, National Association, d/b/a Charter One as Syndication Agent, and The Several Lenders from Time to Time Parties hereto, as Lenders. (Included as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on October 16, 2007 [file No. 000-51199] and incorporated herein by reference).

10.522 -
10.525

Employment agreements by and between Inland Western Retail Real Estate Trust, Inc. and each of Michael J. O’Hanlon, Steven P. Grimes, Shane C. Garrison and Niall J. Byrne, effective November 15, 2007.  (Included as Exhibits 10.522, 10.523, 10.524 and 10.525 to the Company’s Current Report on Form 8-K filed on November 16, 2007 [File No. 000-51199] and incorporated herein by reference).



116








10.526

Purchase and Sale Agreement, dated September 25, 2007, among Kan Am Grund Kapitalanlagegesellschaft mbH, a German limited liability company (“Purchaser”), for the benefit of Kan Am grundivest Fonds, a German open-end real estate fund sponsored by Purchaser, Inland Western Minneapolis 3 rd Avenue, L.L.C., a Delaware limited liability company (as owner of the Minneapolis property), Inland Western Phoenix 31 st Avenue, L.L.C., a Delaware limited liability company (as owner of the Phoenix property), Inland Western Plantation Express, L.L.C. a Delaware limited liability company (as owner of the Ft. Lauderdale Property) and Inland Western Markham Limited Partnership, a limited partnership formed under the laws of Ontario, Canada, as owner of the Markham Property (Included as Exhibit 99.2 to the Company’s Current Report on Form 8-K filed on December 20, 2007 [File No. 000-51199] and incorporated herein by reference).

10.527

Communications Services Agreement, dated January 1, 2004, by and between Inland Communications, Inc. and Inland Western Retail Real Estate Advisory Services, Inc. (filed herewith)

10.528

Amendment to Communication Services Agreement, dated November 15, 2007, by and between Inland Communications, Inc. and Inland Western Retail Real Estate Advisory Services, Inc. (filed herewith)

10.529

Computer Services Agreement, dated January 1, 2004, by and between Inland Computer Services, Inc. and Inland Western Retail Real Estate Advisory Services, Inc. (filed herewith)

10.530

Amendment to Computer Services Agreement, dated November 15, 007, by and between Inland Computer Services, Inc. and Inland Western Retail Real Estate Advisory Services, Inc. (filed herewith)

10.531

Escrow Agreement, dated November 15, 2007, by and among Inland Western Retail Real Estate Trust, Inc., Inland Real Estate Investment Corporation, IWEST Merger Agent, LLC, and LaSalle Bank, NA. (filed herewith)

10.532

Institutional Investor Relationships Services Agreement, dated November 15, 2007, by and between Inland Institutional Capital Partners Corporation and Inland Western Retail Real Estate Advisory Services, Inc. (filed herewith)

10.533

Insurance and Risk Management Services Agreement, dated January 1, 2004, by and between Inland Risk and Insurance Management Services, Inc. and Inland Western Retail Real Estate Advisory Services, Inc. (filed herewith)

10.534

Amendment to Insurance and Risk Management Services Agreement, dated November 15, 2007, by and between Inland Risk and Insurance Management Services, Inc. and Inland Western Retail Real Estate Advisory Services, Inc. (filed herewith)

10.535

Landlord's Agreement, dated November 15, 2007, by and between Inland 2905 & 2907 Butterfield Road LLC. and Inland Western Retail Real Estate Trust, Inc. (filed herewith)

10.536

Legal Services Agreement, dated November 15, 2007, by and between The Inland Real Estate Group, Inc. and Inland Western Retail Real Estate Trust, Inc. (filed herewith)

10.537

License Agreement, dated November 15, 2007, by and between The Inland Real Estate Group, Inc. and Inland Northwest Management Corp. (filed herewith)

10.538

License Agreement, dated November 15, 2007, by and between The Inland Real Estate Group, Inc. and Inland Southwest Management Corp. (filed herewith)

10.539

License Agreement, dated November 15, 2007, by and between The Inland Real Estate Group, Inc. and Inland Western Management Corp. (filed herewith)



117








10.540

License Agreement Modification, dated November 15, 2007, by and between The Inland Real Estate Group, Inc. and Inland Western Retail Real Estate Trust, Inc. (filed herewith)

10.541

Loan Services Agreement, dated January 1, 2004, by and between Inland Mortgage Servicing Corporation and Inland Western Retail Real Estate Advisory Services, Inc. (filed herewith)

10.542

First Amendment to Loan Services Agreement, dated May 1 2005, by and between Inland Mortgage Servicing Corporation and Inland Western Retail Real Estate Advisory Services, Inc. (filed herewith)

10.543

Second Amendment to Loan Services Agreement, dated May 1, 2005, by and between Inland Mortgage Servicing Corporation and Inland Western Retail Real Estate Advisory Services, Inc. (filed herewith)

10.544

Third Amendment to Loan Services Agreement, dated November 15, 2007, by and between Inland Mortgage Servicing Corporation and Inland Western Retail Real Estate Advisory Services, Inc. (filed herewith)

10.545

Mortgage Brokerage Services Agreement, dated January 1, 2004, by and between Inland Mortgage Investment Corporation and Inland Western Retail Real Estate Advisory Services, Inc. (filed herewith)  (Inland Mortgage Investment Corporation subsequently assigned all right, title, obligation and interest under the agreement with Inland Western Real Estate Advisory Services, Inc. to Inland Mortgage Brokerage Services.)

10.546

First Amendment to Mortgage Brokerage Services Agreement, by and between Inland Mortgage Brokerage Services and Inland Western Retail Real Estate Advisory Services, Inc. dated November 1, 2006, (filed herewith)

10.547

Second Amendment to Mortgage Brokerage Services Agreement, by and between Inland Mortgage Brokerage Services and Inland Western Retail Real Estate Advisory Services, Inc. dated November 15, 2007, (filed herewith)

10.548

Office and Facilities Management Services Agreement, dated February 10, 2005, by and among Inland Facilities Management, Inc., Inland Office Services, Inc., Inland Real Estate Strategic Services., Inc. and Inland Western Retail Real Estate Advisory Services, Inc. (filed herewith)

10.549

Amendment to Office and Facilities Management Services Agreement, dated November 15, 2007, by and among Inland Facilities Management, Inc., Inland Office Services, Inc., Inland Real Estate Strategic Services., Inc. (n/k/a Inland Purchasing Services, Inc.) and Inland Western Retail Real Estate Advisory Services, Inc. (filed herewith)

10.550

Personnel Services Agreement, dated January 1, 2004, by and between Inland Payroll Services, Inc. and Inland Western Retail Real Estate Advisory Services, Inc. (filed herewith)

10.551

Amendment to Personnel Services Agreement, dated November 15, 2007, by and between Inland Payroll Services, Inc. and Inland Western Retail Real Estate Advisory Services, Inc. (filed herewith)

10.552

Transition Property Due Diligence Services Agreement, dated November 15, 2007, by and between Inland Real Estate Acquisitions, Inc. and Inland Western Retail Real Estate Trust, Inc. (filed herewith)

10.553

Property Tax Services Agreement, dated January 1, 2004, by and between Investors Property Tax Services, Inc. and Inland Western Retail Real Estate Advisory Services, Inc. (filed herewith)

10.554

Amendment to Property Tax Services Agreement, dated November 15, 2007, by and between Investors Property Tax Services, Inc. and Inland Western Retail Real Estate Advisory Services, Inc. (filed herewith)



118








10.555

Registration Rights Agreement, dated November 15, 2007, by and among Inland Western Retail Real Estate Trust, Inc., Inland Real Estate Investment Corporation and IWEST Merger Agent LLC (filed herewith)

10.556

Sublease Agreement, dated November 15, 2007, by and between Inland Real Estate Investment Corporation and Inland Western Retail Real Estate Trust, Inc.

10.557

The Inland Group, Inc. Letter Agreement dated August 14, 2007 between The Inland Group, Inc. and Inland Western Retail Real Estate Trust, Inc. (included as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on August 17, 2007 [File No. 000-51199] and incorporated herein by reference).

10.558

Consulting Agreement, dated August 14, 2007, by and between Inland Western Retail Real Estate Trust, Inc. and Daniel L. Goodwin (filed herewith)

10.559

Consulting Agreement, dated August 14, 2007, by and between Inland Western Retail Real Estate Trust, Inc. and Robert D. Parks (filed herewith)

10.560

Consulting Agreement, dated August 14, 2007, by and between Inland Western Retail Real Estate Trust, Inc. and G. Joseph Cosenza

10.561

Indemnification Agreement, dated November 15, 2007, by and between Inland Western Retail Real Estate Trust, Inc. and Richard P. Imperiale. (filed herewith)

10.562

Indemnification Agreement, dated November 15, 2007, by and between Inland Western Retail Real Estate Trust, Inc. and Kenneth E. Masick. (filed herewith)

10.563

Indemnification Agreement, dated November 15, 2007,  by and between Inland Western Retail Real Estate Trust, Inc. and Joseph A. Fleming .(filed herewith)

10.564

Indemnification Agreement, dated November 15, 2007, by and between Inland Western Retail Real Estate Trust, Inc. and Dione K. McConnell. (filed herewith)

10.565

Indemnification Agreement, dated November 15, 2007, by and between Inland Western Retail Real Estate Trust, Inc. and David P. Bennett. (filed herewith)

10.566

Indemnification Agreement, dated November 15, 2007, by and between Inland Western Retail Real Estate Trust, Inc. and Kelly E. Tucek. (filed herewith)

10.567

Indemnification Agreement, dated November 15, 2007, by and between Inland Western Retail Real Estate Trust, Inc. and James Kleifges. (filed herewith)

10.568

Indemnification Agreement, dated November 15, 2007, by and between Inland Western Retail Real Estate Trust, Inc. and Ann M. Sharp. (filed herewith)

10.569

Indemnification Agreement, dated November 15, 2007, by and between Inland Western Retail Real Estate Trust, Inc. and Dennis K. Holland. (filed herewith)

10.570

Indemnification Agreement, dated November 15, 2007, by and between Inland Western Retail Real Estate Trust, Inc. and Niall J. Byrne. (filed herewith)

10.571

Indemnification Agreement, dated November 15, 2007, by and between Inland Western Retail Real Estate Trust, Inc. and Shane Garrison. (filed herewith)

10.572

Indemnification Agreement, dated November 15, 2007, by and between Inland Western Retail Real Estate Trust, Inc. and Michael J. O’Hanlon. (filed herewith)

10.6 A-J

Indemnification Agreements by and between Inland Western Retail Real Estate Trust , Inc. and its directors and named executive officers (Included as s 10.6 A-J to the Company’s Annual Report / Amended on Form 10-K/A for the year ended December 31, 2006 filed on April 27, 2007 [File No. 000-51199] and incorporated herein by reference).



119








14.1

Inland Western Retail Real Estate Trust, Inc. Code of Business Conduct and Ethics (Included as  14.1 to the Company’s Annual Report / Amended filed on Form 10-K/A for the year ended December 31, 2006 filed on April 27, 2007 [File No. 000-51199] and incorporated herein by reference).

31.1

Certification of Chief Executive Officer and President pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 (filed herewith).

31.2

Certification of Chief Operating Officer and Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 (filed herewith).

31.3

Certification of Chief Accounting Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 (filed herewith).

32.1

Certification of Chief Executive Officer and President, Chief Operating Officer and Chief Financial Officer and Chief Accounting Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 and 18 U.S.C Section 1350 (filed herewith).





120






SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.


 

/s/ Michael J. O’Hanlon

 

 

By:

Michael J. O’Hanlon

 

Chief Executive Officer and President

Date:

March 27, 2008


Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:


 

/s/ Michael J. O’Hanlon

 

 

/s/ Kenneth H. Beard

 

 

/s/ Brenda G. Gujral

 

 

 

 

 

 

 

 

By:

Michael J. O’Hanlon

 

By:

Kenneth H. Beard

 

By:

Brenda G. Gujral

 

Chief Executive Officer and President

 

 

Director

 

 

Director

Date:

March 27, 2008

 

Date:

March 27, 2008

 

Date:

March 27, 2008

 

 

 

 

 

 

 

 

 

/s/ Steven P. Grimes

 

 

/s/ Frank A. Catalano, Jr.

 

 

/s/ Richard P. Imperiale

 

 

 

 

 

 

 

 

By:

Steven P. Grimes

 

By:

Frank A. Catalano, Jr.

 

By:

Richard P. Imperiale

 

Chief Operating Officer and Chief Financial Officer

 

 

Director

 

 

Director

Date:

March 27, 2008

 

Date:

March 27, 2008

 

Date:

March 27, 2008

 

 

 

 

 

 

 

 

 

/s/ James W. Kleifges

 

 

/s/ Paul R. Gauvreau

 

 

/s/ Kenneth E. Masick

 

 

 

 

 

 

 

 

By:

James W. Kleifges

 

By:

Paul R. Gauvreau

 

By:

Kenneth Masick

 

Chief Accounting Officer

 

 

Director

 

 

Director

 

 

 

 

 

 

 

 

Date:

March 27, 2008

 

Date:

March 27, 2008

 

Date:

March 27, 2008

 

 

 

 

 

 

 

 

 

/s/ Robert D. Parks

 

 

/s/ Gerald M. Gorski

 

 

/s/ Barbara A. Murphy

 

 

 

 

 

 

 

 

By:

Robert D. Parks

 

By:

Gerald M. Gorski

 

By:

Barbara A. Murphy

 

Chairman of the Board and Director

 

 

Director

 

 

Director

Date:

March 27, 2008

 

Date:

March 27, 2008

 

Date:

March 27, 2008




121




Exhibit 31.1


CERTIFICATION

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Michael J. O’Hanlon, certify that:

1.

I have reviewed this annual report on Form 10-K for the year ended December 31, 2007 of Inland Western Retail Real Estate Trust, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

/s/ Michael J. O’Hanlon

 

 

By:

Michael J. O’Hanlon

 

Chief Executive Officer and President

 

 

Date:

March 31, 2008




EXHIBIT 21.0


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.

Subsidiary List


Entity

Formation

4 Overlook LLC

Delaware

C&S Southlake Capital Partners I, L.P.

Delaware

Centre at Laurel, LLC

Maryland

Colesville One, LLC

Maryland

Half Day LLC

Delaware

Inland Bel Air HC, L.L.C.

Delaware

Inland Capital HC, L.L.C.

Delaware

Inland Continental Rave Houston, L.L.C.

Delaware

Inland Continental Polaris, L.L.C.

Delaware

Inland Gateway HC, L.L.C.

Delaware

Inland Holdco Management LLC

Delaware

Inland Mondo Powell, L.L.C.

Delaware

Inland Northwest Management Corp.

Delaware

Inland Pacific Property Services LLC

Delaware

Inland Park Place Limited Partnership

Illinois

Inland Plano Acquisitions, LLC

Delaware

Inland Plano Investments, LLC

Delaware

Inland Polaris Member, L.L.C.

Delaware

Inland Powell Member, L.L.C.

Delaware

Inland Rave Member, L.L.C.

Delaware

Inland Reisterstown HC, L.L.C.

Delaware

Inland Southeast Darien, L.L.C.

Delaware

Inland Southeast King’s Grant, L.L.C.

Delaware

Inland Southeast New Britain, L.L.C.

Delaware

Inland Southeast Newnan Crossing, L.L.C.

Delaware

Inland Southeast Stony Creek, L.L.C.

Delaware

Inland Southpark Acquisitions, L.L.C.

Delaware

Inland Southpark Acquisitions II, L.L.C.

Delaware

Inland Southwest Management Corp.

Delaware

Inland Southwest Management LLC

Delaware

Inland Towson HC, L.L.C.

Delaware

Inland Us Management LLC

Delaware

Inland Western 4 Overlook, L.L.C.

Delaware

Inland Western Acquisitions, INC.

Delaware

Inland Western Acworth Stilesboro, L.L.C.

Delaware

Inland Western Allen McDermott GP, L.L.C.

Delaware

Inland Western Allen McDermott Limited Partnership

Illinois

Inland Western Allen McDermott LP, L.L.C.

Delaware

Inland Western Altamonte Springs State Road, L.L.C.

Delaware

Inland Western Arvada, L.L.C.

Delaware

Inland Western Atlanta Cascade Avenue, L.L.C.

Delaware

Inland Western Austin Mopac GP, L.L.C.

Delaware

Inland Western Austin Mopac Limited Partnership

Illinois

Inland Western Austin Mopac LP, L.L.C.

Delaware

Inland Western Austin Southpark Meadows GP, L.L.C.

Delaware

Inland Western Austin Southpark Meadows Limited Partnership

Illinois

Inland Western Austin Southpark Meadows LP, L.L.C.

Delaware

Inland Western Austin Southpark Meadows Pad G GP, L.L.C.

Delaware

Inland Western Austin Southpark Meadows Pad G Limited Partnership

Illinois

Inland Western Austin Southpark Meadows Pad G LP, L.L.C.

Delaware






Inland Western Austin Southpark Meadows Ii Limited Partnership

Delaware

Inland Western Austin Southpark Meadows II GP, L.L.C.

Delaware

Inland Western Austin Southpark Meadows II LP, L.L.C.

Delaware

Inland Western Avondale McDowell, L.L.C.

Delaware

Inland Western Bakersfield Calloway, L.L.C.

Delaware

Inland Western Bangor Broadway, L.L.C.

Delaware

Inland Western Bangor Parkade, L.L.C.

Delaware

Inland Western Baton Rouge, L.L.C.

Delaware

Inland Western Bay Shore Gardiner, L.L.C.

Delaware

Inland Western Beekman, L.L.C.

Delaware

Inland Western Beekman Member, L.L.C.

Delaware

Inland Western Beekman Member II, L.L.C.

Delaware

Inland Western Bethlehem Saucon Valley DST

Delaware

Inland Western Bettendorf Duck Creek, L.L.C.

Delaware

Inland Western Bettendorf Duck Creek I, L.L.C.

Delaware

Inland Western Birmingham Edgemont, L.L.C.

Delaware

Inland Western Bluffton Low Country, L.L.C.

Delaware

Inland Western Bluffton Low Country II, L.L.C.

Delaware

Inland Western Blytheville, L.L.C.

Delaware

Inland Western Bradenton Beachway, L.L.C.

Delaware

Inland Western Brooklyn Park 93rd Avenue, L.L.C.

Delaware

Inland Western Burleson South Towne GP, L.L.C.

Delaware

Inland Western Burleson South Towne Limited Partnership

Illinois

Inland Western Burleson South Towne LP, L.L.C.

Delaware

Inland Western Burleson Wilshire GP, L.L.C.

Delaware

Inland Western Burleson Wilshire Limited Partnership

Illinois

Inland Western Burleson Wilshire LP, L.L.C.

Delaware

Inland Western Butler Kinnelon, L.L.C.

Delaware

Inland Western Butler Kinnelon Member, L.L.C.

Delaware

Inland Western Butler Kinnelon Member II, L.L.C.

Delaware

Inland Western Cambridge Brick Church, L.L.C.

Delaware

Inland Western Canton O Green, L.L.C.

Delaware

Inland Western Canton Paradise, L.L.C.

Delaware

Inland Western Canton Paradise Outlot, L.L.C.

Delaware

Inland Western Cave Creek Tatum Boulevard, L.L.C.

Delaware

Inland Western Cedar Hill Pleasant Run GP, L.L.C.

Delaware

Inland Western Cedar Hill Pleasant Run Limited Partnership

Illinois

Inland Western Cedar Hill Pleasant Run LP, L.L.C.

Delaware

Inland Western Chantilly Crossing, L.L.C.

Delaware

Inland Western Chantilly Member, L.L.C.

Delaware

Inland Western Chantilly Member II, L.L.C.

Delaware

Inland Western Charleston North Rivers, L.L.C.

Delaware

Inland Western Chattanooga Brainerd Road, L.L.C.

Delaware

Inland Western Chicago Ashland, L.L.C.

Delaware

Inland Western Chicago Ashland I, L.L.C.

Delaware

Inland Western Chicago Brickyard, L.L.C.

Delaware

Inland Western Clear Lake Clear Shores GP, L.L.C.

Delaware

Inland Western Clear Lake Clear Shores Limited Partnership

Illinois

Inland Western Clear Lake Clear Shores LP, L.L.C.

Delaware

Inland Western Cocoa Beach Cornerstone, L.L.C.

Delaware

Inland Western Colesville New Hampshire, L.L.C.

Delaware

Inland Western Colesville New  Hampshire SPE, L.L.C.

Delaware

Inland Western College Station Gateway GP, L.L.C.

Delaware

Inland Western College Station Gateway Limited Partnership

Illinois

Inland Western College Station Gateway LP, L.L.C.

Delaware






Inland Western College Station Gateway II GP, L.L.C.

Delaware

Inland Western College Station Gateway Ii Limited Partnership

Illinois

Inland Western College Station Gateway II LP, L.L.C.

Delaware

Inland Western Columbia Broad River, L.L.C.

Delaware

Inland Western Columbus Clifty, L.L.C.

Delaware

Inland Western Columbus Polaris, L.L.C.

Delaware

Inland Western Columbus Sawmill, L.L.C.

Delaware

Inland Western Coppell Town GP, L.L.C.

Delaware

Inland Western Coppell Town Limited Partnership

Illinois

Inland Western Coppell Town LP, L.L.C.

Delaware

Inland Western Concord King’s Grant II, L.L.C.

Delaware

Inland Western Concord Northlite, L.L.C.

Delaware

Inland Western Coram Plaza, L.L.C.

Delaware

Inland Western Covington Newton Crossroads, L.L.C.

Delaware

Inland Western Cranberry DST

Delaware

Inland Western Crossville Main, L.L.C.

Delaware

Inland Western Cumming Green’s Corner, L.L.C.

Delaware

Inland Western Cupertino Tantau, L.L.C.

Delaware

Inland Western Cuyahoga Falls, L.L.C.

Delaware

Inland Western Cypress Mill GP, L.L.C.

Delaware

Inland Western Cypress Mill Limited Partnership

Illinois

Inland Western Cypress Mill LP, L.L.C.

Delaware

Inland Western Dallas Lincoln Park GP, L.L.C.

Delaware

Inland Western Dallas Lincoln Park Limited Partnership

Illinois

Inland Western Dallas Lincoln Park LP, L.L.C.

Delaware

Inland Western Dallas Paradise, L.L.C.

Delaware

Inland Western Danforth, L.L.C.

Delaware

Inland Western Denton Crossing GP, L.L.C.

Delaware

Inland Western Denton Crossing Limited Partnership

Illinois

Inland Western Denton Crossing LP, L.L.C.

Delaware

Inland Western Depere, L.L.C.

Delaware

Inland Western Douglasville Douglas, L.L.C.

Delaware

Inland Western Duluth John’s Creek, L.L.C.

Delaware

Inland Western Duluth John’s Creek SPE, L.L.C.

Delaware

Inland Western Duncansville Holliday DST

Delaware

Inland Western Easton Forks Town DST

Delaware

Inland Western El Paso Mds Limited Partnership

Illinois

Inland Western El Paso MDS LP, L.L.C.

Delaware

Inland Western El Paso Rojas GP, L.L.C.

Delaware

Inland Western El Paso Rojas Limited Partnership

Illinois

Inland Western El Paso Rojas LP, L.L.C.

Delaware

Inland Western Euless GP, L.L.C.

Delaware

Inland Western Euless Limited Partnership

Illinois

Inland Western Euless LP, L.L.C.

Delaware

Inland Western Evans, L.L.C.

Delaware

Inland Western Fort Mill West Town, L.L.C.

Delaware

Inland Western Fort Myers Page Field, L.L.C.

Delaware

Inland Western Fort Worth Southwest Crossing GP, L.L.C.

Delaware

Inland Western Fort Worth Southwest Crossing Limited Partnership

Illinois

Inland Western Fort Worth Southwest Crossing LP, L.L.C.

Delaware

Inland Western Fountain Hills Four Peaks, L.L.C.

Delaware

Inland Western Fresno Blackstone Avenue, L.L.C.

Delaware

Inland Western Frisco Parkway GP, L.L.C.

Delaware

Inland Western Frisco Parkway LP, L.L.C.

Delaware

Inland Western Fullerton Metrocenter, L.L.C.

Delaware






Inland Western Gainesville Village, L.L.C.

Delaware

Inland Western Galveston Galvez GP, L.L.C.

Delaware

Inland Western Galveston Galvez Limited Partnership

Illinois

Inland Western Galveston Galvez LP, L.L.C.

Delaware

Inland Western Georgetown Magnolia, L.L.C.

Delaware

Inland Western Georgetown Rivery GP, L.L.C.

Delaware

Inland Western Georgetown Rivery Limited Partnership

Illinois

Inland Western Georgetown Rivery LP, L.L.C.

Delaware

Inland Western Gilroy I, L.L.C.

Delaware

Inland Western Gilroy II, L.L.C.

Delaware

Inland Western Glendale, L.L.C.

Delaware

Inland Western Glendale Outlot D, L.L.C.

Delaware

Inland Western Glendale Peoria II, L.L.C.

Delaware

Inland Western Gloucester Cross Keys, L.L.C.

Delaware

Inland Western Gloucester Cross Keys Member, L.L.C.

Delaware

Inland Western Gloucester Cross Keys Member II, L.L.C.

Delaware

Inland Western Grand Prairie Carrier GP, L.L.C.

Delaware

Inland Western Grand Prairie Carrier Limited Partnership

Illinois

Inland Western Grand Prairie Carrier LP, L.L.C.

Delaware

Inland Western Grand Prairie Southwest Crossing GP, L.L.C.

Delaware

Inland Western Grand Prairie Southwest Crossing Limited Partnership

Illinois

Inland Western Grand Prairie Southwest Crossing LP, L.L.C.

Delaware

Inland Western Grapevine GP, L.L.C.

Delaware

Inland Western Grapevine Limited Partnership

Illinois

Inland Western Grapevine LP, L.L.C.

Delaware

Inland Western Green Global Gateway, L.L.C.

Delaware

Inland Western Greensboro Airport Center, L.L.C.

Delaware

Inland Western Greensburg Commons, L.L.C.

Delaware

Inland Western Greenville Five Forks, L.L.C.

Delaware

Inland Western Greenville Five Forks Outlot, L.L.C.

Delaware

Inland Western Greer Wade Hampton, L.L.C.

Delaware

Inland Western Gurnee, L.L.C.

Delaware

Inland Western Half Day, L.L.C.

Delaware

Inland Western Hartford New Park, L.L.C.

Delaware

Inland Western Hartford New Park Member, L.L.C.

Delaware

Inland Western Hartford New Park Member II, L.L.C.

Delaware

Inland Western Heath Southgate, L.L.C.

Delaware

Inland Western Hellertown Main Street DST

Delaware

Inland Western Hickory-Catawba, L.L.C.

Delaware

Inland Western High Ridge, L.L.C.

Delaware

Inland Western Hinsdale Ogden, L.L.C.

Delaware

Inland Western Houma Academy, L.L.C.

Delaware

Inland Western Houma Magnolia, L.L.C.

Delaware

Inland Western Houston Bear Creek GP, L.L.C.

Delaware

Inland Western Houston Bear Creek Limited Partnership

Illinois

Inland Western Houston Bear Creek LP, L.L.C.

Delaware

Inland Western Houston Little York GP, L.L.C.

Delaware

Inland Western Houston Little York Limited Partnership

Illinois

Inland Western Houston New Forest GP, L.L.C.

Delaware

Inland Western Houston New Forest Limited Partnership

Illinois

Inland Western Houston New Forest LP, L.L.C.

Delaware

Inland Western Houston Royal Oaks Village II GP, L.L.C.

Delaware

Inland Western Houston Royal Oaks Village Ii Limited Partnership

Illinois

Inland Western Houston Royal Oaks Village II LP, L.L.C.

Delaware

Inland Western Humble Humblewood GP, L.L.C.

Delaware






Inland Western Humble Humblewood Limited Partnership

Illinois

Inland Western Humble HumblewooD LP, L.L.C.

Delaware

Inland Western Iowa City Alexander, L.L.C.

Delaware

Inland Western Irmo Station, L.L.C.

Delaware

Inland Western Irving GP, L.L.C.

Delaware

Inland Western Irving Limited Partnership

Illinois

Inland Western Irving LP, L.L.C.

Delaware

Inland Western Jackson Columns, L.L.C.

Delaware

Inland Western Jacksonville Race Track Road, L.L.C.

Delaware

Inland Western Jacksonville Southpoint, L.L.C.

Delaware

Inland Western Jonesboro Parker, L.L.C.

Delaware

Inland Western JV Beaumont Crossings, L.L.C.

Delaware

Inland Western JV Dallas Preston Trail, L.L.C.

Delaware

Inland Western JV Hampton Retail Colorado, L.L.C.

Delaware

Inland Western JV Henderson Lake Mead, L.L.C.

Delaware

Inland Western JV Nashville Bellevue, L.L.C.

Delaware

Inland Western JV Rapid CITY, L.L.C.

Delaware

Inland Western Jv South Billings Associates, l.l.c.

Delaware

Inland Western Kalamazoo WMU, L.L.C.

Delaware

Inland Western Kalispell Mountain View, L.L.C.

Delaware

Inland Western Kalispell Mountain View II, L.L.C.

Delaware

Inland Western Kansas City, L.L.C.

Delaware

Inland Western Kansas City Stateline, L.L.C.

Delaware

Inland Western Kansas City Wilshire, L.L.C.

Delaware

Inland Western Kill Devil Hills Croatan, L.L.C.

Delaware

Inland Western Kingsport East Stone, L.L.C.

Delaware

Inland Western Knoxville Corridor Park, L.L.C.

Delaware

Inland Western Knoxville Harvest, L.L.C.

Delaware

Inland Western Lake Mary, L.L.C.

Delaware

Inland Western Lake Worth Towne Crossing GP, L.L.C.

Delaware

Inland Western Lake Worth Towne Crossing Limited Partnership

Illinois

Inland Western Lake Worth Towne Crossing LP, L.L.C.

Delaware

Inland Western Lakewood, L.L.C.

Delaware

Inland Western Lansing Eastwood, L.L.C.

Delaware

Inland Western Lansing Eastwood SPE, L.L.C.

Delaware

Inland Western Larkspur, L.L.C.

Delaware

Inland Western Las Vegas, L.L.C.

Delaware

Inland Western Las Vegas Montecito, L.L.C.

Delaware

Inland Western Las Vegas Montecito Outlot, L.L.C.

Delaware

Inland Western Laurel Contee, L.L.C.

Delaware

Inland Western Laurel Contee Acquisitions, L.L.C.

Delaware

Inland Western Lawrence, L.L.C.

Delaware

Inland Western Lawrenceville Simonton, L.L.C.

Delaware

Inland Western Lawton Lee Blvd., L.L.C.

Delaware

Inland Western Lebanon 9th Street DST

Delaware

Inland Western Lewis Center Powell, L.L.C.

Delaware

Inland Western Lewisville Lakepointe GP, L.L.C.

Delaware

Inland Western Lewisville Lakepointe Limited Partnership

Illinois

Inland Western Lewisville Lakepointe LP, L.L.C.

Delaware

Inland Western Longmont Fox Creek, L.L.C.

Delaware

Inland Western Mansfield GP, L.L.C.

Delaware

Inland Western Mansfield Limited Partnership

Illinois

Inland Western Mansfield LP, L.L.C.

Delaware

Inland Western Maple Grove Wedgwood, L.L.C.

Delaware

Inland Western Markham CORP.

Delaware






Inland Western Markham DST

Delaware

Inland Western Markham Limited Partnership

Delaware

Inland Western Markham Signatory Trustee, L.L.C.

Delaware

Inland Western Marysville, L.L.C.

Delaware

Inland Western Massillon Village, L.L.C.

Delaware

Inland Western McAllen GP, L.L.C.

Delaware

Inland Western McAllen Limited Partnership

Illinois

Inland Western McAllen LP, L.L.C.

Delaware

Inland Western McAllen MDS Limited Partnership

Illinois

Inland Western McAllen MDS LP, L.L.C.

Delaware

Inland Western McAllen Trenton GP, L.L.C.

Delaware

Inland Western McAllen Trenton Limited Partnership

Illinois

Inland Western McAllen Trenton LP, L.L.C.

Delaware

Inland Western McDonough Henry Town, L.L.C.

Delaware

Inland Western McKinney Lake Forest GP, L.L.C.

Delaware

Inland Western McKinney Lake Forest Limited Partnership

Illinois

Inland Western McKinney Lake Forest LP, L.L.C.

Delaware

Inland Western McKinney Stonebridge GP, L.L.C.

Delaware

Inland Western McKinney Stonebridge Limited Partnership

Illinois

Inland Western McKinney Stonebridge LP, L.L.C.

Delaware

Inland Western MDS PORTFOLIO, L.L.C.

Delaware

Inland Western Memphis Winchester, L.L.C.

Delaware

Inland Western Mesa Fiesta, L.L.C.

Delaware

Inland Western Miami 19th Street, L.L.C.

Delaware

Inland Western Middletown Brown’s Lane, L.L.C.

Delaware

Inland Western Middletown Fairgrounds Plaza, L.L.C.

Delaware

Inland Western Midland Academy GP, L.L.C.

Delaware

Inland Western Midland Academy Limited Partnership

Illinois

Inland Western Midland Academy LP, L.L.C.

Delaware

Inland Western Milwaukee Midtown, L.L.C.

Delaware

Inland Western Milwaukee Midtown II, L.L.C.

Delaware

Inland Western Minneapolis 3rd Avenue, L.L.C.

Delaware

Inland Western Montevallo Main, L.L.C.

Delaware

Inland Western Moore 19th Street, L.L.C.

Delaware

Inland Western Morristown Crockett, L.L.C.

Delaware

Inland Western Mountain Brook, L.L.C.

Delaware

Inland Western Mt. Pleasant Park West, L.L.C.

Delaware

Inland Western Murrieta Avenida Acacias, L.L.C.

Delaware

Inland Western Naperville Route 59, L.L.C.

Delaware

Inland Western New Britain Main, L.L.C.

Delaware

Inland Western New Hartford Orchard, L.L.C.

Delaware

Inland Western Newport News Jefferson, L.L.C.

Delaware

Inland Western New Port Richey Mitchell, L.L.C.

Delaware

Inland Western New York Portfolio, L.L.C.

Delaware

Inland Western Newburgh Crossing, L.L.C.

Delaware

Inland Western Newnan Crossing II, L.L.C.

Delaware

Inland Western Norman, L.L.C.

Delaware

Inland Western North Attleboro Crossroads, L.L.C.

Delaware

Inland Western North Richland Hills Davis GP, L.L.C.

Delaware

Inland Western North Richland Hills Davis Limited Partnership

Illinois

Inland Western North Richland Hills Davis LP, L.L.C.

Delaware

Inland Western Northport Northwood, L.L.C.

Delaware

Inland Western Northwoods Natural Bridge, L.L.C.

Delaware

Inland Western Oklahoma City Quail, L.L.C.

Delaware

Inland Western Oklahoma City Western Avenue, L.L.C.

Delaware






Inland Western Ontario 4th Street, L.L.C.

Delaware

Inland Western Orange 440 Boston, L.L.C.

Delaware

Inland Western Orange 440 Boston Member, L.L.C.

Delaware

Inland Western Orange 440 Boston Member II, L.L.C.

Delaware

Inland Western Orange 53 Boston, L.L.C.

Delaware

Inland Western Oswego Douglass, L.L.C.

Delaware

Inland Western Oswego Gerry Centennial, L.L.C.

Delaware

Inland Western Oswego Gerry Centennial Leasing, L.L.C.

Delaware

Inland Western Ottawa Dayton, L.L.C.

Delaware

Inland Western Panama City, L.L.C.

Delaware

Inland Western Pawtucket Boulevard, L.L.C.

Delaware

Inland Western Pawtucket Cottage, L.L.C.

Delaware

Inland Western Phenix City, L.L.C.

Delaware

Inland Western Phillipsburg Greenwich, L.L.C.

Delaware

Inland Western Phillipsburg Greenwich Member, L.L.C.

Delaware

Inland Western Phillipsburg Greenwich Member II, L.L.C.

Delaware

Inland Western Phoenix, L.L.C.

Delaware

Inland Western Phoenix 19th Avenue, L.L.C.

Delaware

Inland Western Phoenix 31st Avenue, L.L.C.

Delaware

Inland Western Pittsburgh William Penn GP, L.L.C.

Delaware

Inland Western Pittsburgh William Penn, L.P.

Illinois

Inland Western Pittsburgh William Penn Member II DST

Delaware

Inland Western Pittsburgh William Penn Partner, L.P.

Delaware

Inland Western Placentia, L.L.C.

Delaware

Inland Western Plantation Express, L.L.C.

Delaware

Inland Western Plymouth 5, L.L.C.

Delaware

Inland Western Port Arthur Academy GP, L.L.C.

Delaware

Inland Western Port Arthur Academy Limited Partnership

Illinois

Inland Western Port Arthur Academy LP, L.L.C.

Delaware

Inland Western Pottstown GP, L.L.C.

Delaware

Inland Western Pottstown Limited Partnership

Illinois

Inland Western Pottstown LP, L.L.C.

Delaware

Inland Western Poughkeepsie Mid-Hudson, L.L.C.

Delaware

Inland Western Poughkeepsie Mid-Hudson Member, L.L.C.

Delaware

Inland Western Poughkeepsie Mid-Hudson Member II, L.L.C.

Delaware

Inland Western Powder Springs Battle Ridge, L.L.C.

Delaware

Inland Western Punxsutawney Mahoning Street DST

Delaware

Inland Western Quakertown GP, L.L.C.

Delaware

Inland Western Quakertown Limited Partnership

Illinois

Inland Western Quakertown LP, L.L.C.

Delaware

Inland Western Retail Real Estate Advisory Services, Inc.

Illinois

Inland Western Retail Real Estate Trust, Inc.

Maryland

Inland Western Richmond Mayland, L.L.C.

Delaware

Inland Western Round Rock Forest Commons GP, L.L.C.

Delaware

Inland Western Round Rock Forest Commons Limited Partnership

Illinois

Inland Western Round Rock Forest Commons LP, L.L.C.

Delaware

Inland Western Royal Palm Beach Commons, L.L.C.

Delaware

Inland Western Saginaw GP, L.L.C.

Delaware

Inland Western Saginaw Limited Partnership

Illinois

Inland Western Saginaw LP, L.L.C.

Delaware

Inland Western Salt Lake City Gateway, L.L.C.

Delaware

Inland Western San Antonio GP, L.L.C.

Delaware

Inland Western San Antonio Limited Partnership

Illinois

Inland Western San Antonio LP, L.L.C.

Delaware

Inland Western San Antonio Academy GP, L.L.C.

Delaware






Inland Western San Antonio Academy Limited Partnership

Illinois

Inland Western San Antonio Academy LP, L.L.C.

Delaware

Inland Western San Antonio Fountainhead Drive GP, L.L.C.

Delaware

Inland Western San Antonio Fountainhead Drive Limited Partnership

Illinois

Inland Western San Antonio Fountainhead Drive LP, L.L.C.

Delaware

Inland Western San Antonio HQ GP, L.L.C.

Delaware

Inland Western San Antonio HQ Limited Partnership

Illinois

Inland Western San Antonio HQ LP, L.L.C.

Delaware

Inland Western San Antonio Huebner Oaks GP, L.L.C.

Delaware

Inland Western San Antonio Huebner Oaks Limited Partnership

Illinois

Inland Western San Antonio Huebner Oaks LP, L.L.C.

Delaware

Inland Western San Antonio Military Drive GP, L.L.C.

Delaware

Inland Western San Antonio Military Drive Limited Partnership

Illinois

Inland Western San Antonio Military Drive LP, L.L.C.

Delaware

Inland Western San Antonio Mission GP, L.L.C.

Delaware

Inland Western San Antonio Mission Limited Partnership

Illinois

Inland Western San Antonio Mission LP, L.L.C.

Delaware

Inland Western San Antonio Rogers GP, L.L.C.

Delaware

Inland Western San Antonio Rogers Limited Partnership

Illinois

Inland Western San Antonio Rogers LP, L.L.C.

Delaware

Inland Western Santa Clara 1350 Duane, L.L.C.

Delaware

Inland Western Santa Fe, L.L.C.

Delaware

Inland Western Saratoga Springs Wilton, L.L.C.

Delaware

Inland Western Saratoga Springs Wilton Member, L.L.C.

Delaware

Inland Western Saratoga Springs Wilton Member II, L.L.C.

Delaware

Inland Western Schaumburg American Lane, L.L.C.

Delaware

Inland Western Seattle Northgate North, L.L.C.

Delaware

Inland Western Seekonk Power Center, L.L.C.

Delaware

Inland Western Severn, L.L.C.

Delaware

Inland Western Severn NB, L.L.C.

Delaware

Inland Western Southlake GP, L.L.C.

Delaware

Inland Western Southlake Limited Partnership

Illinois

Inland Western Southlake LP, L.L.C.

Delaware

Inland Western Southlake Corners GP, L.L.C.

Delaware

Inland Western Southlake Corners Limited Partnership

Illinois

Inland Western Southlake Corners LP, L.L.C.

Delaware

Inland Western Southlake Suntree Limited Partnership

Illinois

Inland Western Southlake Suntree LP, L.L.C.

Delaware

Inland Western Spartanburg, L.L.C.

Delaware

Inland Western Spartanburg SPE, L.L.C.

Delaware

Inland Western SPE, L.L.C.

Delaware

Inland Western Spokane Northpointe, L.L.C.

Delaware

Inland Western Springfield Boston, L.L.C.

Delaware

Inland Western St. George, L.L.C.

Delaware

Inland Western State College Science Park DST

Delaware

Inland Western Stockton Airport Way, L.L.C.

Delaware

Inland Western Stockton Airport Way II, L.L.C.

Delaware

Inland Western Stockton Ground Tenant, L.L.C.

Delaware

Inland Western Stony Creek II, L.L.C.

Delaware

Inland Western Sugar Land Colony GP, L.L.C.

Delaware

Inland Western Sugar Land Colony Limited Partnership

Illinois

Inland Western Sugar Land Riverpark I GP, L.L.C.

Delaware

Inland Western Sugar Land Riverpark I Limited Partnership

Illinois

Inland Western Sugar Land Riverpark I LP, L.L.C.

Delaware

Inland Western Sugar Land Riverpark IIA GP, L.L.C.

Delaware






Inland Western Sugar Land Riverpark IIA Limited Partnership

Illinois

Inland Western Sugar Land Riverpark IIA LP, L.L.C.

Delaware

Inland Western Summerville Azalea Square, L.L.C.

Delaware

Inland Western Sylacauga Broadway, L.L.C.

Delaware

Inland Western Tallahassee Governor’s One, L.L.C.

Delaware

Inland Western Tampa Walters, L.L.C.

Delaware

Inland Western Taylorsville 2700 West, L.L.C.

Delaware

Inland Western Temecula Commons, L.L.C.

Delaware

Inland Western Temecula Vail, L.L.C.

Delaware

Inland Western Thousand Oaks, L.L.C.

Delaware

Inland Western Town And Country Manchester, L.L.C.

Delaware

Inland Western Traverse City Bison Hollow, L.L.C.

Delaware

Inland Western Tuscaloosa University, L.L.C.

Delaware

Inland Western University Heights University Square, L.L.C.

Delaware

Inland Western Viera Lake Andrew, L.L.C.

Delaware

Inland Western Waco Central Gp, L.L.C.

Delaware

Inland Western Waco Central Limited Partnership

Illinois

Inland Western Waco Central LP, L.L.C.

Delaware

Inland Western Watauga GP, L.L.C.

Delaware

Inland Western Watauga Limited Partnership

Illinois

Inland Western Watauga LP, L.L.C.

Delaware

Inland Western/Weber JV Dallas Wheatland  GP, L.L.C.

Delaware

Inland Western/Weber JV Dallas Wheatland Limited Partnership

Delaware

Inland Western/Weber JV Dallas Wheatland  LP, L.L.C.

Delaware

Inland Western/Weber JV Frisco Parkway Limited Partnership

Delaware

Inland Western Wesley Chapel Northwoods, L.L.C.

Delaware

Inland Western West Allis Greenfield, L.L.C.

Delaware

Inland Western West Mifflin Century III GP, L.L.C.

Delaware

Inland Western West Mifflin Century III, L.P.

Illinois

Inland Western West Mifflin CentuRY III Member II DST

Delaware

Inland Western West Mifflin Century III Partner, L.P.

Delaware

Inland Western Westbury Merchants Plaza, L.L.C.

Delaware

Inland Western Westerville Cleveland, L.L.C.

Delaware

Inland Western Williston Maple Tree, L.L.C.

Delaware

Inland Western Wilmington College, L.L.C.

Delaware

Inland Western Winston-Salem 5th Street, L.L.C.

Delaware

Inland Western Winter Springs Red Bug, L.L.C.

Delaware

Inland Western Woodridge Seven Bridges, L.L.C.

Delaware

Inland Western Worcester Lincoln Plaza, L.L.C.

Delaware

IWEST Gilroy, L.L.C.

Delaware

IWEST Merger Agent, LLC

Delaware

IWR Protective Corporation

Delaware

IWR Gateway Central Plant, L.L.C.

Delaware

Lake Mead Crossing, LLC

Delaware

MS Inland Fund, LLC

Delaware

SLTS Grand Avenue II, L.P.

Delaware

SLTS Grand Avenue II GP, L.L.C.

Delaware

Stroud Commons, LLC

Delaware

The Shops At Legacy (Inland) GP, L.L.C.

Delaware

The Shops At Legacy (Inland) L.P.

Delaware

The Shops At Legacy (Inland) LP, L.L.C.

Delaware

The Shops At Legacy (Inland) Leasing GP, L.L.C.

Delaware

The Shops At Legacy (Inland) Leasing  L.P.

Illinois

The Shops At Legacy (Inland) Leasing LP, L.L.C.

Delaware

Town Square Ventures, L.P.

Illinois






Town Square Ventures II GP, L.L.C.

Texas

Town Square Ventures II, L.P.

Delaware

Town Square Ventures III, L.P.

Delaware

Town Square Ventures III GP, L.L.C.

Delaware

Town Square Ventures III LP, L.L.C.

Delaware

University Square Parking LLC

Delaware

Western Town Square Ventures GP, L.L.C.

Delaware

Western Town Square Ventures LP, L.L.C.

Delaware

Western Town Square Ventures I GP, L.L.C.

Delaware







Exhibit 31.2

CERTIFICATION

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Steven P. Grimes, certify that:

1.

I have reviewed this annual report on Form 10-K for the year ended December 31, 2007 of Inland Western Retail Real Estate Trust, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

/s/ Steven P. Grimes

 

 

By:

Steven P. Grimes

 

Chief Operating  Officer and Chief Financial Officer

 

 

Date

March 31, 2008




Exhibit 31.3

CERTIFICATION

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, James W. Kleifges, certify that:

1.

I have reviewed this annual report on Form 10-K for the year ended December 31, 2007 of Inland Western Retail Real Estate Trust, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

/s/ James W. Kleifges

 

 

By:

James W. Kleifges

 

Chief Accounting Officer

 

 

Date

March 31, 2008

 





Exhibit 32.1




Certification Pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K of Inland Western Retail Real Estate Trust, Inc. (the "Company") for the year ended December 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Michael J. O’Hanlon, as Chief Executive Officer and President of the Company, Steven P. Grimes, as Chief Operating Officer and Chief Financial Officer of the Company and James W. Kleifges as Chief Accounting Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Michael J. O’Hanlon

 

 

 

 

Name:

Michael J. O’Hanlon

 

 

Chief Executive Officer and President

 

 

 

Date:

March 31, 2008

 

 

 

 

 

 

 

 

 

 

 

/s/ Steven P. Grimes

 

 

 

 

Name:

Steven P. Grimes

 

 

Chief Operating Officer and Chief Financial Officer

 

 

 

Date:

March 31, 2008

 

 

 

 

 

 

 

 

 

 

 

/s/ James W. Kleifges

 

 

 

 

Name:

James W. Kleifges

 

 

Chief Accounting Officer

 

 

 

Date:

March 31, 2008

 

 

 

 

 

 

 










Exhibit 10.527

COMMUNICATIONS SERVICES AGREEMENT

This Communications Services Agreement (this “Agreement”), dated as of January 1, 2004 (the “Effective Date”), is entered into by and between INLAND COMMUNICATIONS , INC., an Illinois corporation (“Service Provider”) and INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC., an Illinois corporation (the “Business Manager”).

RECITALS

WHEREAS, Service Provider is in the business of providing certain communications services, including without limitation, the communications services described and set forth in Exhibit A hereto (collectively, the “Services”); and

WHEREAS, the Business Manager is desirous of retaining Service Provider to perform the Services for the Business Manager in connection with the Real Estate Business (as defined herein) for the benefit of REIT (as defined herein) and/or its Affiliates (as defined herein), and Service Provider is willing to perform the Services, subject to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and obligations set forth below, the parties hereto, intending to be legally bound, agree to the foregoing and as follows:

ARTICLE I
DEFINITIONS

“Affiliate” shall mean, except as otherwise provided herein, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meaning, the terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of that Person through the ownership of voting securities, by contract or otherwise. With respect to the Business Manager, any entity representing a joint venture or similar arrangement in which the Business Manager, or an entity controlled by the Business Manager, is the general partner or managing member shall be deemed to be an “Affiliate” of the Business Manager.

“Business Management Agreement” shall mean that certain Advisory Agreement, dated as of September 18, 2003, as amended from time to time, between the Business Manager and REIT.

“Person” shall mean an individual, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Real Estate Business” shall mean (i) any business activities conducted by REIT so long as REIT remains qualified as a “real estate investment trust” under Section 856 the Internal Revenue Code of 1986, as amended, and (ii) any business that is consistent with and limited to the description of the business of REIT contained in the prospectus forming a part of the Registration Statement on Form S-11 (No. 333-122743), as amended, filed by REIT with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended.

“REIT” shall mean Inland Western Retail Real Estate Trust, Inc., a Maryland corporation.



1


ARTICLE II
PERFORMANCE OF SERVICES

2.1 Service Provider agrees to perform the Services for the Business Manager in connection with the Real Estate Business of the REIT and/or its or their Affiliates. Service Provider shall perform and provide the Services in a professional manner and in accordance with all laws, statutes, ordinances, codes, rules and regulations applicable to the Services. Service Provider, at Business Manager’s cost, may employ, contract with or use the service of any third party in connection with the performance of the Services as the Service Provider deems reasonably necessary or desirable, including independent, outside counsel.

2.2 The Business Manager and Service Provider acknowledge that the relationship created hereby is on an exclusive basis as to Business Manager such that during the Initial Services Term and any Additional Services Term (except during any period that Service Provider is in default hereunder), (x) the Business Manager shall be required to retain only the Service Provider to perform all of the Services or any individual Service, (y) the Business Manager shall not be permitted to retain third parties to perform for the Business Manager services the same as or similar to the Services or any individual Service, but that in any event Service Provider shall be permitted to perform the Services or any individual Service for any other parties.

ARTICLE III
TERM AND TERMINATION

3.1 Subject to the termination provisions set forth in this Article III, this Agreement shall continue for an initial period of four (4) years from the Effective Date (“Initial Services Term) and shall be automatically renewed for consecutive three (3) year terms thereafter (each an “Additional Services Term”) unless earlier terminated as hereafter provided.

3.2 At any time during the Initial Services Term or at any time during an Additional Services Term, the Business Manager may terminate this Agreement for cause (i.e., a material default by Service Provider hereunder) upon ten (10) days’ prior written notice to Service Provider; provided, however, that prior to exercising its rights under this Section 3.2, the Business Manager shall notify Service Provider of any default, and Service Provider shall have thirty (30) days after receipt of the notice to cure the default to the Business Manager’s reasonable satisfaction. As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for the Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.

3.3 At any time during the Initial Services Term or during an Additional Services Term, the Business Manager shall have the right to terminate this Agreement, without cause, by providing not less than sixty (60) days’ prior written notice to Service Provider of any election to so terminate and specifying the effective date of such termination; provided, however, in such event, Service Provider shall be entitled to and shall be paid a termination fee equal to the product of: (a) the average monthly compensation, set forth on Exhibit A, for the six (6) months immediately preceding the month in which the Service Provider is served the termination notice from the Business Manager, multiplied by (b) six (6) (“Termination Fee”). The Termination Fee shall be paid on the effective date of such termination with a credit lo Business Manager for compensation paid to Service Provider for the period from the date of Service Provider’s receipt of the termination notice to and including the effective date of such termination.

3.4 Provided that Service Provider is not providing or is terminating such Services to all other clients of Service Provider, and no affiliate of Service Provider is providing or is undertaking to provide such Services, Service Provider, at any time during the Initial Services Term or during an Additional



2


Services Term, may elect to limit one or more of the Services it is providing to the Business Manager upon not less than sixty (60) days’ prior written notice to the Business Manager, specifying the effective date such Services shall no longer be performed and describing in reasonable detail the Services to be terminated. As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.

3.5 If at any time during the Initial Services Term or any Additional Services Term the REIT has had a Change of Control, as hereinafter defined, Service Provider shall have the right to terminate this Agreement, without cause, upon written notice to Business Manager. At any time during the Initial Services Term or any Additional Services Term, and the REIT has not had a Change of Control, Service Provider shall have the right to terminate this Agreement, without cause, by providing not less than one hundred eighty (180) days’ prior written notice to the Business Manager, specifying the effective date of such termination. The foregoing notwithstanding, Service Provider, upon ten (10) days’ prior written notice to the Business Manager, may terminate this Agreement, or decline to provide a particular Service hereunder upon the occurrence of any of the following events:

(a) The Business Manager fails, in the absence of a bona fide dispute with respect to any payment, to make payment for Services on its due date; provided, however, the Business Manager may cure the breach up to three (3) times per calendar year by making payment within ten (10) days of the Business Manager’s receipt of written notice that it failed to make the payment when due;

(b) The Business Manager requests that Service Provider provide Services that in the Service Provider’s opinion would violate any applicable law or the rules of any regulatory body with jurisdiction and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid opinion;

(c) The Business Manager requests that Service Provider take any action that in the Service Provider’s opinion would result in the commission of a fraud upon any person or party and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid opinion;

(d) The Business Manager requests that Service Provider take any action that, upon the advice of counsel to Service Provider, could subject Service Provider to liability or material damages in civil litigation and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid advice of counsel; or

(e) The Business Manager requests that Service Provider provide Services that upon advice of counsel to Service Provider would cause Service Provider or any of its employees to be in violation of its professional code of ethics or other ethical standards the Service Provider or any of its employees is subject to and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s counsel’s advice.

As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.

3.6 Upon any termination of this Agreement or cessation of Services arising under Sections 3.2 or 3.4 of this Agreement, during the Initial Services Term or any Additional Services Term, Service Provider shall provide the Business Manager with a reasonable opportunity to transition any terminated Services to any replacement provider(s) designated by the Business Manager (“Replacement Provider”), which period shall not be more than sixty (60) days from the date of termination of this Agreement or specified terminated Services (the “Transition Period”). During the Transition Period, Service Provider shall use reasonable efforts to avoid causing any unnecessary interruption of the terminated Services so as to



3


provide a smooth transition of such Services (the “Transition”). All services related to Transition shall be deemed Services and subject to the charges and fees set forth in Exhibit A attached hereto.

3.7 For the purposes hereof, the term “Change of Control” shall mean the occurrence of any one or more of the following:

(a)

Any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the REIT to any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended; provided, however, that any sale, lease, exchange or transfer to (including, without limitation, any merger or other business combination with or into) any of the following shall not constitute a Change of Control: (i) any affiliate controlled by the REIT, (ii) Inland Real Estate Corporation, (iii) Inland American Real Estate Trust, Inc., (iv) The Inland Group, Inc., or (v) any affiliate controlled by any of the entities listed in clauses (i) through (iv) above (all of the entities described in clauses (i) through (v) above are hereinafter sometimes referred to as the “Inland Companies”;

(b)

The approval by the holders of the outstanding shares of the REIT of any plan or proposal for the liquidation or dissolution of the REIT; or

(c)

Any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (other than any one or more of the Inland Companies) shall become the owner, directly or indirectly, beneficially or of record, of shares of the REIT representing more than twenty-five percent (25%) of the aggregate ordinary voting power represented by the issued and outstanding common shares of the REIT.

ARTICLE IV
INTERNAL CONTROL PROCEDURES

As a public entity, REIT is required to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as may be amended from time to time (“Section 404”). Notwithstanding anything to the contrary contained in this Agreement (including, without limitation, Article III and Section 8.4 hereof), if the Business Manager shall determine that, to provide services to and for the benefit of the Business Manager and REIT, Service Provider must comply with the requirements of Section 404, then the Business Manager and Service Provider shall develop and implement an internal control plan or other processes and procedures (or amend and revise any existing internal control plan, processes and procedures) to comply with the requirements (collectively, the “Internal Control Plan”). Once developed and implemented, Service Provider shall use its reasonable best efforts to have its internal controls comply in all respects with the requirements of Section 404. The cost and expense of development and initial implementation of any Internal Control Plan shall be borne by all clients of Service Provider that require Service Provider to comply with Section 404. Upon determination that an Internal Control Plan must be developed and implemented, Service Provider, the Business Manager and all other clients of Service Provider requiring Service Provider to comply with Section 404 shall, in good faith, negotiate an equitable allocation of the costs and expenses of the development and implementation of the Internal Control Plan between and among the parties. The foregoing provisions regarding payment and allocation of the costs and expenses of development and implementation of any Internal Control Plan shall not apply to any Internal Control Plan developed and implemented, or in the process of being developed and implemented, on or prior to the date of this Agreement.

ARTICLE V
PAYMENT

Service Provider shall invoice the Business Manager monthly (or any other basis as reasonably agreed to by the Business Manager) for any Services performed during the immediately preceding



4


calendar month (or any other period agreed to by the Business Manager). Payment shall be due thirty (30) days after the date of the Business Manager’s receipt of the same and shall be as provided in Section 2 of Exhibit A attached hereto. The compensation to be paid by the Business Manager under this Article V and Section 2 of Exhibit A attached hereto shall constitute full and complete payment for any and all services rendered and performed by Service Provider under and pursuant to this Agreement, which compensation includes any and all labor, costs and expenses incurred or to be incurred by Service Provider in connection with its performance of the Services.

ARTICLE VI
RIGHT TO AUDIT

Service Provider shall keep and make available for the examination and audit of or by the Business Manager, or the Business Manager’s authorized employees, agents or representatives during normal business hours, and upon reasonable prior notice, at the Business Manager’s cost, all data, materials and information, including but not Limited to records of all receipts, costs and disbursements made by Service Provider with respect to the Services and all Operating Expenses (as defined in Exhibit A attached hereto), all books, accounts, memoranda, files and all or any other documents indicating, documenting, verifying or substantiating the cost and appropriateness of any and all costs, expenditures and receipts relating to the Services and/or Operating Expenses. Service Provider shall allow the Business Manager (and any of the Business Manager’s employees, representatives, accountants and auditors) reasonable access to personnel, representatives and employees of Service Provider and all books and records and other business records and files of Service Provider that are reasonably required by the Business Manager for audit and tax matters.

ARTICLE VII
CONFIDENTIALITY

7.1 During the term of this Agreement, the parties may communicate to each other certain confidential information to enable Service Provider to perform the services hereunder, and/or Service Provider may develop confidential information for the Business Manager. Each party agrees:

(a) to treat, and to cause its employees, agents, subcontractors and representatives, if any, to treat as secret and confidential, all confidential information; and

(b) except as necessary in the performance of the Services, not to disclose any confidential information or make available any reports, recommendations and/or conclusions which Service Provider may make for the Business Manager to any person, firm or corporation without first obtaining the Business Manager’s written approval.

7.2 If any party learns that disclosure of confidential information is sought in or by a court or governmental body of competent jurisdiction or through other means, the party shall:

(a) give prompt notice to the other party prior to making the disclosure and allow the other party, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, confidential information;

(b) reasonably cooperate with the other party in its efforts to prevent, or obtain a protective order for disclosure; and

(c) disclose the minimum amount of information required to be disclosed.



5



ARTICLE VIII
MISCELLANEOUS

8.1 Binding Effect . This Agreement shall be binding upon, and inure to the benefit of, the successors and assigns, if any, of each party hereto.

8.2 Governing Law: Jurisdiction . This Agreement shall be subject to and governed by the internal laws of the State of Illinois without regard to principles of choice of law. The parties hereto each agree that all disputes arising hereunder shall be tried in the federal and state courts located in Cook County or DuPage County, State of Illinois, and each party hereby agrees to submit to the exclusive jurisdiction of those courts.

8.3 Waiver . Either party’s failure to exercise any right under this Agreement shall neither constitute a waiver of any other terms or conditions of this Agreement with respect to any other or subsequent breach, nor a waiver by that party of its right at any time thereafter to require exact and strict compliance with the terms of this Agreement.

8.4 Independent Contractors . The parties acknowledge and agree that they are dealing with each other hereunder as independent contractors. Nothing contained in the Agreement shall be interpreted as constituting either party to be the joint venturer or partner of the other party or as conferring upon either party the power or authority to bind the other party in any transaction with third parties.

8.5 Equitable Relief and Monetary Damages . Each party hereto recognizes and acknowledges that a breach by the other party to this Agreement will cause irreparable damage to the non-breaching party that cannot be readily remedied in monetary damages in an action at law. In the event of any default or breach by either party, the non-breaching party shall be entitled to seek immediate injunctive relief to prevent irreparable harm, loss or dilution in addition to any other remedies available. Nothing herein shall limit a non-breaching party’s right to seek monetary damages with respect to a breach.

8.6 Entire Agreement . This Agreement, including the exhibits hereto, constitutes the entire agreement between the parties and contains all of the terms and conditions of the agreement between the parties with respect to the subject matter hereof. This Agreement supersedes any and all other agreements, whether oral or written, between the parties hereto, including any Affiliates of Service Provider, with respect to the subject matter hereof. No change or modification of this Agreement shall be valid unless the same shall be in writing and signed by the parties hereto.

8.7 Severability . If any provisions of this Agreement, or the application of any such provisions to parties hereto, shall be held by a court of competent jurisdiction to be unlawful or unenforceable, the remaining provisions of this Agreement shall nevertheless be valid, enforceable and shall remain in full force and effect, and shall not be affected, impaired or invalidated in any manner.

8.8 Headings . The headings in this Agreement are inserted for convenience only and are not to be considered in the interpretation or construction of the provisions hereof.

8.9 Notices . All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given or delivered:

(a) when delivered personally or by commercial messenger;

(b) one (1) business day following deposit with a recognized overnight courier service, provided the deposit occurs prior to the deadline imposed by the overnight courier service for overnight delivery; or

(c) when transmitted, if sent by facsimile copy, provided confirmation of receipt is received by sender and such notice is sent by an additional method provided hereunder;



6


in each case above provided the notice or other communication is addressed to the intended recipient thereof as set forth below:


If to Service Provider, to:

Inland Communications, Inc.
2901 Butterfield Road
Oak Brook, IL 60523
Attention: Bella Zielinski
Facsimile: (630) 218-8039

 

 

If to the Business Manager, to:

Inland Western Retail Real Estate Advisory Services, Inc.
2901 Butterfield Road
Oak Brook, IL 60523
Attention: Roberta S. Matlin
Facsimile: (630)218-4955

A party’s address for notice may be changed from time to time by notice given to the other party in the manner herein provided for giving notice.

8.10 Further Assurance . Each party to this Agreement agrees to execute and deliver any and all documents, and to perform any and all further acts that may be reasonably necessary to carry out the provisions of this Agreement and the transactions contemplated hereby.

8.11 Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

8.12 Assignment . The Business Manager shall not assign this Agreement without the prior express written consent of the Service Provider; provided, however, if the REIT shall acquire or consolidate its business with the Business Manager, this Agreement shall be and be deemed assigned by the Business Manager to the REIT with the REIT assuming all of the obligations of Business Manager under the terms of this Agreement effective the date of such acquisition or consolidation. Service Provider shall not assign this Agreement without the prior express written consent of the Business Manager.

8.13 Furtherance of Prior Agreement . This Agreement is made in furtherance of that certain Services Agreement dated as of January 1, 2004 among the Business Manager, the Service Provider and others (“Prior Agreement”) to more fully set forth the duties and obligations of the parties hereto contemplated under the Prior Agreement. Accordingly, this Agreement shall supersede the Prior Agreement in all respects in connection agreements of the parties hereto made in this Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

THE BUSINESS MANAGER:

 

SERVICE PROVIDER:

 

 

 

 

 

INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC., an Illinois corporation

 

INLAND COMMUNICATIONS, INC.,
an Illinois corporation

By: 


/s/ Brenda Gail Gujral

 

By: 


/s/ Bella P. Zielinski

Name: 

Brenda Gail Gujral

 

Name: 

Bella P. Zielinski

Its: 

Vice President

 

Its: 

President




7


EXHIBIT A

1. Services : The Services to be provided under this Agreement shall be provided as and when requested by the Business Manager, or any authorized agent of the Business Manager. Service Provider agrees to provide communications and media relations services, including but not limited to, the following:

·

Placement of advertisements

·

Establishment and administration of standards of branding of the Inland logo and website

·

Ordering of corporate identification materials such as business cards, letterheads and envelops

·

Production of color copies

·

Maintenance of media contact list

·

Crisis management

·

Maintenance of a database of general information regarding the Business Manager, REIT and all other clients of Service Provider

·

Design of advertisements, flyers, brochures and similar marketing materials

·

Editing of website information and marketing materials

·

Administration and rental of digital cameras and PowerPoint projectors Scheduling of media interviews

·

Preparation for media interviews

·

Attending meetings relating to Services provided

·

Taking of photographs as required

·

Preparation of PowerPoint presentations

·

Ordering of specialty items such as pens, umbrellas and other items with REIT name or logo

·

Preparation and review of press releases

·

Preparation and distribution of information to third parties for company raking purposes

·

Ordering reprints of media articles

·

Preparation of and attendance at industry conferences ( i.e. , ICSC)

·

Typesetting for flyers, brochures and similar marketing materials

·

Maintenance of company history and principals’ biographies

·

Maintenance and administration of standards of branding for all billboards and signage

2. Compensation : Service Provider shall be paid for all services rendered under this Agreement as follows:

(a) The compensation, costs, expenses and disbursements to be charged by Service Provider shall be the actual time (on an hourly basis, in increments of one-quarter of one hour) spent by the employees of Service Provider, at an hourly billing rate of $40.00 per hour, for performing marketing and communications services. From time to time upon the



8


Business Manager’s request, Service Provider shall provide a list of all employees of Service Provider providing any of the Services under this Agreement. Additionally, the aforementioned billing rates shall be subject to change by Service Provider on an annual basis (as of January 1 of each calendar year); provided , however , that the billing rates charged by Service Provider hereunder shall be no greater than the billing rates charged to any other client of Service Provider. Each employee of Service Provider shall keep and maintain, and make available to the Business Manager upon request, a record (“Timesheets”) of all the Business Manager transactions on which any employees work, which record shall set forth the following: (i) the specific matter worked on; (ii) the entity for which the Services are being performed; (iii) the actual amount of time spent on the matter for the applicable calendar month and for the transaction/matter on a cumulative basis; (iv) the hourly billing rates applicable to the employee; and (v) a general description of the nature of the work and services performed. Each invoice for Service rendered by Service Provider shall include a copy of each employee’s Timesheets supporting the amount requested for payment in the invoice. Notwithstanding anything contained in this Agreement to the contrary, in no event shall  the amount fees, charges, costs, expenses or other compensation charged by Service Provider to all of its clients (including the Business Manager) for any and all services (including the Services) provided by Service Provider exceed the actual Operating Expenses incurred by Service Provider in providing the services. For the purposes hereof, the term “Operating Expenses” shall mean any and all actual, out-of-pocket costs and expenses incurred by Service Provider in connection with the performance and rendering of services that are the same as or substantially similar to the Services to all of Service Provider’s clients (including the Business Manager), which costs and expenses may include, without limitation or duplication: (1) the salaries, employee benefits and bonuses of its employees; (2) copy costs; (3) administrative overhead; (4) rent for office space; (5) costs of materials and supplies; and (6) mileage reimbursement. Service Provider shall keep and maintain books and records setting forth all Operating Expenses.

(b) Service Provider represents that, to its knowledge, the rates and other charges payable by the Business Manager under this Agreement do not and shall not exceed the market rate for similar services provided to companies of size, nature and business similar to the Business Manager or REIT. If the Business Manager determines that any of the rates and/or other amounts charged by Service Provider under this Agreement shall exceed the market rate for similar services provided to companies of size, nature and business similar to the Business Manager or REIT, then the Business Manager and Service Provider shall negotiate in good faith to adjust the rates and other amounts to market.





9


EXHIBIT 10.528

EXECUTION COPY

AMENDMENT TO COMMUNICATIONS SERVICES AGREEMENT

This Amendment to that certain Communications Services Agreement dated as of January 1, 2004 ("Services Agreement") made between INLAND COMMUNICATIONS, INC. ("Service Provider"), an Illinois corporation, and  INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC. ("Business Manager"), an Illinois corporation, is made as of November 15, 2007 by the parties to the Services Agreement.

In consideration of the agreements to be made herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

1.

Section 2.2 of the Services Agreement is hereby deleted in its entirety and in lieu thereof the following is inserted:

"2.2  The Business Manager and Service Provider acknowledge that the Services to be provided by Service Provider hereunder are to be provided on a non-exclusive basis such that Business Manager shall be permitted to employ other parties to perform any one or more of the Services and that Service Provider shall be permitted to perform any one or more of the Services to other parties."

2.

Section 3.3 of the Services Agreement is hereby deleted in its entirety and in lieu thereof the following is inserted:

"3.3 At any time during the Initial Services Term or during an Additional Services Term, the Business Manager shall have the right to terminate this Agreement, without cause, by providing not less than one hundred eighty (180) days’ prior written notice to Service Provider of any election to terminate and specifying the effective date of such termination."

3.

Section 3.4 of the Services Agreement is hereby amended by deleting the words "sixty (60)" set forth therein and in lieu thereof inserting the words "thirty (30)".

4.

Section 3.5 of the Services Agreement is hereby amended by deleting the first sentence thereof in its entirety and in lieu thereof the following is inserted:

"If at any time during the Initial Services Term or any Additional Services Term the REIT has had a Change of Control, as hereinafter defined, Service Provider shall have the right to terminate this Agreement, without cause, upon not less than thirty (30) days prior written notice to Business Manager."

In all other respects the Services Agreement remains in full force and effect.



1



INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC.

By:

Its:  

        

INLAND COMMUNICATIONS, INC.

By:

Its:  

        


















[Signature Page to Amendment to Communication Services Agreement]

Endnotes





2



Exhibit 10.529

COMPUTER SERVICES AGREEMENT

This Computer Services Agreement (this “Agreement”), dated as of January 1, 2004 (the “Effective Date”), is entered into by and between INLAND COMPUTER SERVICES, INC., an Illinois corporation (“Service Provider”) and INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC., an Illinois corporation (the “Business Manager”).

RECITALS

WHEREAS, Service Provider is in the business of providing certain computer services, including without limitation, the computer services described and set forth in Exhibit A hereto (collectively, the “Services”); and

WHEREAS, the Business Manager is desirous of retaining Service Provider to perform the Services for the Business Manager in connection with the Real Estate Business (as defined herein) for the benefit of REIT (as defined herein) and/or its Affiliates (as defined herein), and Service Provider is willing to perform the Services, subject to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and obligations set forth below, the parties hereto, intending to be legally bound, agree to the foregoing and as follows:

ARTICLE I
DEFINITIONS

“Affiliate” shall mean, except as otherwise provided herein, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meaning, the terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of that Person through the ownership of voting securities, by contract or otherwise. With respect to the Business Manager, any entity representing a joint venture or similar arrangement in which the Business Manager, or an entity controlled by the Business Manager, is the general partner or managing member shall be deemed to be an “Affiliate” of the Business Manager.

“Business Management Agreement” shall mean that certain Advisory Agreement, dated as of September 18, 2003, as amended from time to time, between the Business Manager and REIT.

“Person” shall mean an individual, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Real Estate Business” shall mean (i) any business activities conducted by REIT so long as REIT remains qualified as a “real estate investment trust” under Section 856 the Internal Revenue Code of 1986, as amended, and (ii) any business that is consistent with and limited to the description of the business of REIT contained in the prospectus forming a part of the Registration Statement on Form S-11 (No. 333-122743), as amended, filed by REIT with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended.

“REIT” shall mean Inland Western Retail Real Estate Trust, Inc., a Maryland corporation.



1


ARTICLE II
PERFORMANCE OF SERVICES

2.1 Service Provider agrees to perform the Services for the Business Manager in connection with the Real Estate Business of the REIT and/or its or their Affiliates. Service Provider shall perform and provide the Services in a professional manner and in accordance with all laws, statutes, ordinances, codes, rules and regulations applicable to the Services. Service Provider, at Business Manager’s cost, may employ, contract with or use the service of any third party in connection with the performance of the Services as the Service Provider deems reasonably necessary or desirable, including independent, outside counsel.

2.2 The Business Manager and Service Provider acknowledge that the relationship created hereby is on an exclusive basis as to Business Manager such that during the Initial Services Term and any Additional Services Term (except during any period that Service Provider is in default hereunder), (x) the Business Manager shall be required to retain only the Service Provider to perform all of the Services or any individual Service, (y) the Business Manager shall not be permitted to retain third parties to perform for the Business Manager services the same as or similar to the Services or any individual Service, but that in any event Service Provider shall be permitted to perform the Services or any individual Service for any other parties.

ARTICLE III
TERM AND TERMINATION

3.1 Subject to the termination provisions set forth in this Article III, this Agreement shall continue for an initial period of four (4) years from the Effective Date (“Initial Services Term) and shall be automatically renewed for consecutive three (3) year terms thereafter (each an “Additional Services Term”) unless earlier terminated as hereafter provided.

3.2 At any time during the Initial Services Term or at any time during an Additional Services Term, the Business Manager may terminate this Agreement for cause (i.e., a material default by Service Provider hereunder) upon ten (10) days’ prior written notice to Service Provider; provided, however, that prior to exercising its rights under this Section 3.2, the Business Manager shall notify Service Provider of any default, and Service Provider shall have thirty (30) days after receipt of the notice to cure the default to the Business Manager’s reasonable satisfaction. As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for the Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.

3.3 At any time during the Initial Services Term or during an Additional Services Term, the Business Manager shall have the right to terminate this Agreement, without cause, by providing not less than sixty (60) days’ prior written notice to Service Provider of any election to so terminate and specifying the effective date of such termination; provided, however, in such event, Service Provider shall be entitled to and shall be paid a termination fee equal to the product of: (a) the average monthly compensation, set forth on Exhibit A, for the six (6) months immediately preceding the month in which the Service Provider is served the termination notice from the Business Manager, multiplied by (b) six (6) (“Termination Fee”). The Termination Fee shall be paid on the effective date of such termination with a credit to Business Manager for compensation paid to Service Provider for the period from the date of Service Provider’s receipt of the termination notice to and including the effective date of such termination.

3.4 Provided that Service Provider is not providing or is terminating such Services to all other clients of Service Provider, and no affiliate of Service Provider is providing or is undertaking to provide such Services, Service Provider, at any time during the Initial Services Term or during an Additional



2


Services Term, may elect to limit one or more of the Services it is providing to the Business Manager upon not less than sixty (60) days’ prior written notice to the Business Manager, specifying the effective date such Services shall no longer be performed and describing in reasonable detail the Services to be terminated. As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.

3.5 If at any time during the Initial Services Term or any Additional Services Term the REIT has had a Change of Control, as hereinafter defined, Service Provider shall have the right to terminate this Agreement, without cause, upon written notice to Business Manager. At any time during the Initial Services Term or any Additional Services Term, and the REIT has not had a Change of Control, Service Provider shall have the right to terminate this Agreement, without cause, by providing not less than one hundred eighty (180) days’ prior written notice to the Business Manager, specifying the effective date of such termination. The foregoing notwithstanding, Service Provider, upon ten (10) days’ prior written notice to the Business Manager, may terminate this Agreement, or decline to provide a particular Service hereunder upon the occurrence of any of the following events:

(a) The Business Manager fails, in the absence of a bona fide dispute with respect to any payment, to make payment for Services on its due date; provided, however, the Business Manager may cure the breach up to three (3) times per calendar year by making payment within ten (10) days of the Business Manager’s receipt of written notice that it failed to make the payment when due;

(b) The Business Manager requests that Service Provider provide Services that in the Service Provider’s opinion would violate any applicable law or the rules of any regulatory body with jurisdiction and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid opinion;

(c) The Business Manager requests that Service Provider take any action that in the Service Provider’s opinion would result in the commission of a fraud upon any person or party and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid opinion;

(d) The Business Manager requests that Service Provider take any action that, upon the advice of counsel to Service Provider, could subject Service Provider to liability or material damages in civil litigation and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid advice of counsel; or

(e) The Business Manager requests that Service Provider provide Services that upon advice of counsel to Service Provider would cause Service Provider or any of its employees to be in violation of its professional code of ethics or other ethical standards the Service Provider or any of its employees is subject to and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s counsel’s advice.

As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.

3.6 Upon any termination of this Agreement or cessation of Services arising under Sections 3.2 or 3.4 of this Agreement, during the Initial Services Term or any Additional Services Term, Service Provider shall provide the Business Manager with a reasonable opportunity to transition any terminated Services to any replacement provider(s) designated by the Business Manager (“Replacement Provider”), which period shall not be more than sixty (60) days from the date of termination of this Agreement or specified terminated Services (the “Transition Period”). During the Transition Period, Service Provider shall use reasonable efforts to avoid causing any unnecessary interruption of the terminated Services so as to



3


provide a smooth transition of such Services (the “Transition”). All services related to Transition shall be deemed Services and subject to the charges and fees set forth in Exhibit A attached hereto.

3.7 For the purposes hereof, the term “Change of Control” shall mean the occurrence of any one or more of the following:

(a)

Any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the REIT to any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended; provided, however, that any sale, lease, exchange or transfer to (including, without limitation, any merger or other business combination with or into) any of the following shall not constitute a Change of Control: (i) any affiliate controlled by the REIT, (ii) Inland Real Estate Corporation, (iii) Inland American Real Estate Trust Inc., (iv) The Inland Group, Inc., or (v) any affiliate controlled by any of the entities listed in clauses (i) through (iv) above (all of the entities described in clauses (i) through (v) above are hereinafter sometimes referred to as the “Inland Companies”;

(b)

The approval by the holders of the outstanding shares of the REIT of any plan or proposal for the liquidation or dissolution of the REIT; or

(c)

Any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (other than any one or more of the Inland Companies) shall become the owner, directly or indirectly, beneficially or of record, of shares of the REIT representing more than twenty-five percent (25%) of the aggregate ordinary voting power represented by the issued and outstanding common shares of the REIT.

ARTICLE IV
INTERNAL CONTROL PROCEDURES

As a public entity, REIT is required to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as may be amended from time to time (“Section 404”). Notwithstanding anything to the contrary contained in this Agreement (including, without limitation, Article III and Section 8.4 hereof), if the Business Manager shall determine that, to provide services to and for the benefit of the Business Manager and REIT, Service Provider must comply with the requirements of Section 404, then the Business Manager and Service Provider shall develop and implement an internal control plan or other processes and procedures (or amend and revise any existing internal control plan, processes and procedures) to comply with the requirements (collectively, the “Internal Control Plan”). Once developed and implemented, Service Provider shall use its reasonable best efforts to have its internal controls comply in all respects with the requirements of Section 404. The cost and expense of development and initial implementation of any Internal Control Plan shall be borne by all clients of Service Provider that require Service Provider to comply with Section 404. Upon determination that an Internal Control Plan must be developed and implemented, Service Provider, the Business Manager and all other clients of Service Provider requiring Service Provider to comply with Section 404 shall, in good faith, negotiate an equitable allocation of the costs and expenses of the development and implementation of the Internal Control Plan between and among the parties. The foregoing provisions regarding payment and allocation of the costs and expenses of development and implementation of any Internal Control Plan shall not apply to any Internal Control Plan developed and implemented, or in the process of being developed and implemented, on or prior to the date of this Agreement.

ARTICLE V
PAYMENT

Service Provider shall invoice the Business Manager monthly (or any other basis as reasonably agreed to by the Business Manager) for any Services performed during the immediately preceding



4


calendar month (or any other period agreed to by the Business Manager). Payment shall be due thirty (30) days after the date of the Business Manager’s receipt of the same and shall be as provided in Section 2 of Exhibit A attached hereto. The compensation to be paid by the Business Manager under this Article V and Section 2 of Exhibit A attached hereto shall constitute full and complete payment for any and all services rendered and performed by labor, costs and expenses incurred or to be incurred by Service Provider in connection with its performance of the Services.

ARTICLE VI
RIGHT TO AUDIT

Service Provider shall keep and make available for the examination and audit of or by the Business Manager, or the Business Manager’s authorized employees, agents or representatives during normal business hours, and upon reasonable prior notice, at the Business Manager’s cost, all data, materials and information, including but not limited to records of all receipts, costs and disbursements made by Service Provider with respect to the Services and all Operating Expenses (as defined in Exhibit A attached hereto), all books, accounts, memoranda, files and all or any other documents indicating, documenting, verifying or substantiating the cost and appropriateness of any and all costs, expenditures and receipts relating to the Services and/or Operating Expenses. Service Provider shall allow the Business Manager (and any of the Business Manager’s employees, representatives, accountants and auditors) reasonable access to personnel, representatives and employees of Service Provider and all books and records and other business records and files of Service Provider that are reasonably required by the Business Manager for audit and tax matters.

ARTICLE VII
CONFIDENTIALITY

7.1 During the term of this Agreement, the parties may communicate to each other certain confidential information to enable Service Provider to perform the services hereunder, and/or Service Provider may develop confidential information for the Business Manager. Each party agrees:

(a) to treat, and to cause its employees, agents, subcontractors and representatives, if any, to treat as secret and confidential, all confidential information; and

(b) except as necessary in the performance of the Services, not to disclose any confidential information or make available any reports, recommendations and/or conclusions which Service Provider may make for the Business Manager to any person, firm or corporation without first obtaining the Business Manager’s written approval.

7.2 If any party learns that disclosure of confidential information is sought in or by a court or governmental body of competent jurisdiction or through other means, the party shall:

(a) give prompt notice to the other parry prior to making the disclosure and allow the other party, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, confidential information;

(b) reasonably cooperate with the other party in its efforts to prevent, or obtain a protective order for disclosure; and

(c) disclose the minimum amount of information required to be disclosed.



5




ARTICLE VIII
MISCELLANEOUS

8.1 Binding Effect . This Agreement shall be binding upon, and inure to the benefit of, the successors and assigns, if any, of each party hereto.

8.2 Governing Law; Jurisdiction . This Agreement shall be subject to and governed by the internal laws of the State of Illinois without regard to principles of choice of law. The parties hereto each agree that all disputes arising hereunder shall be tried in the federal and state courts located in Cook County or DuPage County, State of Illinois, and each party hereby agrees to submit to the exclusive jurisdiction of those courts.

8.3 Waiver . Either party’s failure to exercise any right under this Agreement shall neither constitute a waiver of any other terms or conditions of this Agreement with respect to any other or subsequent breach, nor a waiver by that party of its right at any time thereafter to require exact and strict compliance with the terms of this Agreement.

8.4 Independent Contractors . The parties acknowledge and agree that they are dealing with each other hereunder as independent contractors. Nothing contained in the Agreement shall be interpreted as constituting either party to be the joint venturer or partner of the other party or as conferring upon either party the power or authority to bind the other party in any transaction with third parties.

8.5 Equitable Relief and Monetary Damages. Each party hereto recognizes and acknowledges that a breach by the other party to this Agreement will cause irreparable damage to the non-breaching party that cannot be readily remedied in monetary damages in an action at law. In the event of any default or breach by either party, the non-breaching party shall be entitled to seek immediate injunctive relief to prevent irreparable harm, loss or dilution in addition to any other remedies available. Nothing herein shall limit a non-breaching party’s right to seek monetary damages with respect to a breach.

8.6 Entire Agreement . This Agreement, including the exhibits hereto, constitutes the entire agreement between the parties and contains all of the terms and conditions of the agreement between the parties with respect to the subject matter hereof. This Agreement supersedes any and all other agreements, whether oral or written, between the parties hereto, including any Affiliates of Service Provider, with respect to the subject matter hereof. No change or modification of this Agreement shall be valid unless the same shall be in writing and signed by the parties hereto.

8.7 Severability . If any provisions of this Agreement, or the application of any such provisions to parties hereto, shall be held by a court of competent jurisdiction to be unlawful or unenforceable, the remaining provisions of this Agreement shall nevertheless be valid, enforceable and shall remain in full force and effect, and shall not be affected, impaired or invalidated in any manner.

8.8 Headings . The headings in this Agreement are inserted for convenience only and are not to be considered in the interpretation or construction of the provisions hereof.


8.9 Notices . All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given or delivered:

(a) when delivered personally or by commercial messenger;

(b) one (1) business day following deposit with a recognized overnight courier service, provided the deposit occurs prior to the deadline imposed by the overnight courier service for overnight delivery; or



6


(c) when transmitted, if sent by facsimile copy, provided confirmation of receipt is received by sender and such notice is sent by an additional method provided hereunder;

in each case above provided the notice or other communication is addressed to the intended recipient thereof as set forth below:

 

If to Service Provider, to:

 

Inland Computer Services, Inc.

 

 

2901 Butterfield Road

 

 

Oak Brook, 1L 60523

 

 

Attention: Kurt Huddleston

 

 

Facsimile: (630)218-4917

 

If to the Business Manager, to:

 

Inland Western Retail Real Estate Advisory Services, Inc.

 

 

2901 Butterfield Road

 

 

Oak Brook, IL 60523

 

 

Attention: Roberta S. Matlin

 

 

Facsimile: (630)218-4955

A party’s address for notice may be changed from time to time by notice given to the other party in the manner herein provided for giving notice.

8.10 Further Assurance . Each party to this Agreement agrees to execute and deliver any and all documents, and to perform any and all further acts that may be reasonably necessary to carry out the provisions of this Agreement and the transactions contemplated hereby.

8.11 Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

8.12 Assignment . The Business Manager shall not assign this Agreement without the prior express written consent of the Service Provider, provided, however, if the REIT shall acquire or consolidate its business with the Business Manager, this Agreement shall be and be deemed assigned by the Business Manager to the REIT with the REIT assuming all of the obligations of Business Manager under the terms of this Agreement effective the date of such acquisition or consolidation. Service Provider shall not assign this Agreement without the prior express written consent of the Business Manager.

8.13 Furtherance of Prior Agreement. This Agreement is made in furtherance of that certain Services Agreement dated as of January 1, 2004 among the Business Manager, the Service Provider and others (“Prior Agreement”) to more fully set forth the duties and obligations of the parties hereto contemplated under the Prior Agreement. Accordingly, this Agreement shall supersede the Prior Agreement in all respects in connection agreements of the parties hereto made in this Agreement.



7


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

THE BUSINESS MANAGER:

 

SERVICE PROVIDER:

 

 

 

INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC., an Illinois corporation

 

INLAND COMPUTER SERVICES, INC.,
an Illinois corporation

By: 


/s/ Brenda Gail Gujral

 

By: 


/s/ R. Kurt Huddleston

Name: 

Brenda Gail Gujral

 

Name: 

R. Kurt Huddleston

Its: 

Vice President

 

Its: 

President




8




EXHIBIT A

1. Services : The services to be provided under this Agreement shall be provided on an on-going, continuous basis throughout the Services Term, unless otherwise requested by the Business Manager. Service Provider agrees to provide to the Business Manager the types, kinds and nature of any and all services provided to the Business Manager prior to the consummation of the Mergers, including, but not limited to, the following: data processing, computer equipment and support services and other information technology services, including, without limitation, the following: (i) custom application, development, programming, consulting, configuration, support and troubleshooting (including rental of terminals, printers, etc.); (ii) data storage and backup; (iii) e-mail service; (iv) printing services, including laser printing, custom forms, checks and color printing; and (iv) PC networking, including file and print services and Internet access.

2. Compensation : Service Provider shall be paid for all services rendered under this Agreement as follows:

(a) Direct Charges .

·

Programming and consulting time (whether in person or over the telephone) shall be billed at $50 per hour (in increments of 0.25 hours). From time to time upon the Business Manager’s request, Service Provider shall provide a list of all employees of Service Provider providing any of the Services under this Agreement. Each employee of Service Provider that provides programming and consultation services shall keep and maintain, and make available to the Business Manager upon request, a record (“Timesheets”) of all the Business Manager transactions on which employees work, which record shall set forth the following: (A) the specific matter worked on; (B) the Business Manager entity for which the Services are being performed; (C) the actual amount of time spent on the matter during the applicable calendar month and for the transaction/matter on a cumulative basis; (D) the hourly billing rates applicable to the employee; and (E) a general description of the nature of the work and services performed. Each invoice for Service rendered by Service Provider shall include a copy of each employee’s Timesheets supporting the amount requested for payment in the invoice. Unless agreed to by the Business Manager prior to the incurrence thereof, the Business Manager shall not be charged for (1) the time of any administrative assistants, secretaries, office assistants, interns and/or other personnel of the Service Provider; or (2) travel time.

·

Alpha departmental disk storage is charged at $0.50 per 1000 blocks of storage (approximately $1 per megabyte), with a minimum charge of $10 per month. This includes related services such as daily backup and off-site storage.

·

Printing on Service Provider’s high speed laser printer incurs a cost of 2 cents per printed page. There is no charge incurred to the department for printing on any other printer other than the high speed laser printers.

·

Color printing costs 25 cents per page.

·

E-mail messages are billed at 3 cents per message, plus 20 cents per megabyte in excess of 10 kilobytes per message average, outgoing messages only.



9




·

Usage charges for Networked PC’s consist of: (A) $5 per port per month connect charge, to cover the cost of maintaining the network infrastructure; (B) $6 per month software license fee; (C) $10 per month software support fee; and (D) $0.50 per megabyte of storage of PC files in Network file services

(b) Equipment Rental Charges

·

Terminals are charged at $20 per month.

·

Departmental printers are charged at $70 per month which includes all toner, supplies, and maintenance.

(c) CPU Usage . The only compensation, costs, expenses and disbursements to be charged by Service Provider to the Business Manager for the CPU Usage provided hereunder shall be the Business Manager’s Pro Rata Share (hereinafter defined) of all Operating Expenses (hereinafter defined) actually incurred by Service Provider during the calendar month for which payment is being sought. For the purposes hereof, the “Business Manager’s Pro Rata Share” shall be a fraction, the numerator of which shall be the actual, aggregate amount of CPU computer time used by the Business Manager during the applicable calendar month, and the denominator of which shall be the actual, aggregate amount of CPU computer time used by all clients (including the Business Manager) of Service Provider using the CPU during the applicable calendar month. CPU computer time is the actual time that a computer spends running programs, and not the amount of time that a user is logged in at a terminal. With each monthly invoice, Service Provider shall include an itemized list of all of Service Provider’s clients and, upon request by the Business Manager, the actual amount of CPU computer time used by each of the clients during the applicable calendar month. For the purposes hereof, the term “Operating Expenses” shall mean the positive difference between (i) any and all actual, out-of-pocket costs and expenses incurred by Service Provider during the applicable calendar month in connection with the performance and rendering of services that are the same as or substantially similar to the Services to all of Service Provider’s clients (including the Business Manager) that use the CPU (which costs and expenses may include, without limitation or duplication: (1) the salaries, employee benefits and bonuses of its employees; (2) copy costs; (3) administrative overhead; (4) rent for office space; and (5) costs of materials and supplies) and (ii) the amount of Direct Charges

payable by the Business Manager pursuant to Section 2(a) above for the applicable calendar month.

(d) Billing Rates . All billing rates (whether hourly or monthly or based on any other measured unit (i.e., a megabyte)) shall be subject to change by Service Provider on an annual basis (as of January 1 of each calendar year), provided, however, that the billing rates charged by Service Provider hereunder shall be no greater than the billing rates charged to any other client of Service Provider of the applicable Service. Service Provider represents that, to its knowledge, the rates and other charges payable by the Business Manager under this Agreement do not and shall not exceed the market rate for similar services provided to companies of size, nature and business similar to the Business Manager or REIT. If the Business Manager determines that any of the rates and/or other amounts charged by Service Provider under this Agreement shall exceed the market rate for similar services provided to companies of size, nature and business similar to the Business Manager or REIT, then the Business Manager and Service Provider shall negotiate in good faith to adjust the rates and other amounts to market.



10








11


EXHIBIT 10.530

EXECUTION COPY

AMENDMENT TO COMPUTER SERVICES AGREEMENT

This Amendment to that certain Computer Services Agreement dated as of January 1, 2004 ("Services Agreement") made between INLAND COMPUTER SERVICES, INC. ("Service Provider"), an Illinois corporation, and INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC. ("Business Manager"), an Illinois corporation, is made as of November 15, 2007 by the parties to the Services Agreement.

In consideration of the agreements to be made herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

1.

Section 2.2 of the Services Agreement is hereby deleted in its entirety and in lieu thereof the following is inserted:

"2.2  The Business Manager and Service Provider acknowledge that the Services to be provided by Service Provider hereunder are to be provided on a non-exclusive basis such that  Business Manager shall be permitted to employ other parties to perform any one or more of the Services and that Service Provider shall be permitted to perform any one or more of the Services to other parties."

2.

Section 3.3 of the Services Agreement is hereby deleted in its entirety and in lieu thereof the following is inserted:

"3.3 At any time during the Initial Services Term or during an Additional Services Term, the Business Manager shall have the right to terminate this Agreement, without cause, by providing not less than one hundred eighty (180) days’ prior written notice to Service Provider of any election to terminate and specifying the effective date of such termination."

3.

Section 3.4 of the Services Agreement is hereby amended by deleting the words "sixty (60)" set forth therein and in lieu thereof inserting the words "thirty (30)".

4.

Section 3.5 of the Services Agreement is hereby amended by deleting the first sentence thereof in its entirety and in lieu thereof the following is inserted:

"If at any time during the Initial Services Term or any Additional Services Term the REIT has had a Change of Control, as hereinafter defined, Service Provider shall have the right to terminate this Agreement, without cause, upon not less than thirty (30) days prior written notice to Business Manager."

In all other respects the Services Agreement remains in full force and effect.



1



INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC.

By:

Its:  

        

INLAND COMPUTER SERVICES, INC.

By:

Its:  

        
























[Signature Page to Amendment to Computer Services Agreement]

Endnotes





2





EXHIBIT 10.531


EXECUTION COPY


ESCROW AGREEMENT


THIS ESCROW AGREEMENT (this “ Agreement ”) is made and entered into as of this 15 th day of November, 2007 (the “ Effective Date ”), by and among INLAND REAL ESTATE INVESTMENT CORPORATION , a Delaware corporation (“ IREIC ”); INLAND WESTERN RETAIL REAL ESTATE TRUST, INC. , a Maryland corporation (“ IWEST ”); IWEST MERGER AGENT, LLC , in its capacity as agent (the “ Agent ”) for the Stockholders (as defined below); and LASALLE BANK, N.A. , as escrow agent (“ Escrow Agent ”).


RECITALS :


A.

IREIC, IWEST and the Agent are parties to that certain Agreement and Plan of Merger, dated as of August 14, 2007 (the “ Merger Agreement ”), by and among IWEST, IREIC, IWEST Acquisition 1, Inc., IWEST Acquisition 2, Inc., IWEST Acquisition 3, Inc., IWEST Acquisition 4, Inc., Inland Western Retail Real Estate Advisory Services, Inc., Inland Southwest Management Corp., Inland Northwest Management Corp. and Inland Western Management Corp.

B.

Pursuant to Section 2.2(g) and Section 2.5(f) of the Merger Agreement, the Escrowed Shares (as defined in Section 2 below) are, contemporaneously with the execution of this Agreement, being delivered to and deposited by IREIC and the Agent into an escrow fund established with the Escrow Agent (including any additional IWEST Shares placed into such escrow fund pursuant to the Merger Agreement, and as the contents thereof may be reduced from time to time in accordance with this Agreement and the Merger Agreement, the “ Escrow Fund ”) for the sole purpose of securing the obligations of IREIC, the Agent (on behalf of the Stockholders) and each Stockholder, if any, with respect to indemnification under Sections 9.2(a) and 9.5(a) of the Merger Agreement, in each case, for the term of this Agreement.

C.

IREIC, IWEST, the Agent and Escrow Agent have agreed to execute and enter into this Agreement (i) to memorialize their agreements with respect to the deposit, administration and disbursement of the Escrowed Shares, and (ii) (as to the parties hereto other than Escrow Agent) in satisfaction of the closing condition set forth in Section 7.2(i) and Section 7.3(g) of the Merger Agreement.

NOW, THEREFORE , for and in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


1.

Incorporation of Recitals; Defined Terms; Term .  The foregoing Recitals are, by this reference, incorporated into the body of this Agreement as if set forth herein in their entirety.  Capitalized terms used but not defined in this Agreement, but defined in the Merger Agreement, shall have the meanings given to them in the Merger Agreement, a copy of which has been delivered to Escrow Agent solely in order to enable it to reference such definitions.  The term of this Agreement (the “ Term ”) shall commence as of the Effective Date and shall expire and terminate upon the disbursement of the last of the Escrowed Shares (as defined in Section 2 below) from the Escrow Fund.

2.

Deposit of Escrowed Shares .  The IWEST Shares directly delivered to and deposited with Escrow Agent by IREIC and the Agent contemporaneously with the execution of this Agreement are to be held, administered and disbursed in accordance and compliance with the terms and provisions of this Agreement.  All IWEST Shares so deposited (as such number of shares may be increased or reduced from







time to time in accordance with this Agreement and the Merger Agreement) shall sometimes herein be referred to as the “ Escrowed Shares .”  Escrow Agent is authorized to and shall accept later deposits of Converted Shares (as defined in the Merger Agreement) for which appraisal rights have been withdrawn or lost or not perfected (if any) as contemplated by the Merger Agreement to be held, administered and disbursed in accordance and compliance with the terms and provisions of this Agreement, which IWEST Shares shall also be “ Escrowed Shares .”

3.

Dividends and Interest; Voting .  All dividends and distributions in respect of the Escrowed Shares (“ Earnings ”) are intended to be and shall be paid directly by IWEST to IREIC and the Stockholders, as the case may be. If the Escrow Agent shall receive any Earnings in respect of the Escrowed Shares prior to the termination of this Agreement, then the Escrow Agent shall promptly distribute and disburse such Earnings to IREIC and the Agent (for further distribution to the Stockholders), as applicable.  However, stock dividends made to effect stock splits or similar events shall be retained by the Escrow Agent as part of the Escrow Fund.  All voting rights with respect to Escrowed Shares may be exercised by IREIC or the respective Stockholder, as the case may be, in accordance with their ownership thereof, and the Escrow Agent shall from time to time execute and deliver to IREIC and the Stockholders (if necessary) such proxies, consents or other documents as may be necessary to enable IREIC and the Stockholders to exercise such rights. Under no circumstances shall the Escrow Agent be entitled to exercise any voting rights with respect to the Escrowed Shares.

4.

Release of Escrow Deposits .

(a)

Initial Disbursement .  On the first anniversary of the Effective Date (the “ Initial Disbursement Date ”), Escrow Agent shall disburse to IREIC and the Agent (or as directed in writing by IREIC and the Agent no less than two (2) Business Days prior to the Initial Disbursement Date), a number (the “ Initial Disbursement Amount ”) of Escrowed Shares equal to fifty percent (50%) of the amount by which the Value of the Escrow as of the Initial Disbursement Date exceeds the Initial Withheld Amount, rounded up to the nearest whole share on a holder by holder basis.  For the purposes of this Agreement, the term “ Value of the Escrow ” shall mean, as of any given date, an amount equal to the product of (A) the total number of Escrowed Shares of IREIC and the Stockholders in the Escrow Fund as of such date and (B) Ten Dollars ($10.00) or, if the Escrowed Shares are listed on a national securities exchange, the average closing sales price of an Escrowed Share on such exchange for the twenty (20) trading days immediately preceding the second (2 nd ) trading day immediately preceding the Initial Disbursement Date (the “ Market Price ”); and the term “ Initial Withheld Amount ” shall mean the total amount of Damages, if any, then claimed by IWEST pursuant to a proper IWEST Disbursement Request (as defined in Section 4(c) below) or Final Adjudication received by Escrow Agent, IREIC and Agent in accordance with Section 4(c) below prior to the Initial Disbursement Date, which claimed Damages have not been disbursed from the Escrow Fund or otherwise paid or satisfied prior to the Initial Disbursement Date.  The entire Initial Disbursement Amount shall be made in Escrowed Shares, with each Escrowed Share having a value equal to Ten ($10.00) or, if the Escrowed Shares are listed on a national securities exchange, the Market Price.  IREIC, the Agent and IWEST shall, in any event, direct Escrow Agent as to the specific number of  IWEST Shares to be transferred on the Initial Disbursement Date, and IREIC and the Agent shall also provide delivery instructions with respect thereto.

(b)

Final Disbursement .  On the date that is the earlier of (i) the thirtieth (30 th ) day after receipt by IWEST of an audit opinion from IWEST’s independent public accounting firm covering the financial statements of IWEST for the year ending December 31, 2008 (which date shall be communicated to the Escrow Agent by means of a joint notice signed by IWEST, IREIC and the Agent) and (ii) the second (2 nd ) anniversary of the Effective Date (the “ Final Disbursement Date ”), Escrow Agent shall disburse to IREIC and the Agent (or as directed by IREIC and the Agent in writing no less than two (2) Business Days prior to the Final Disbursement Date), an amount of Escrowed Shares (the “ Final Disbursement Amount ”) equal to



2





100% of (A) the Value of the Escrow as of the Final Disbursement Date less (B) an amount (the “ Final Withheld Amount ”) equal to the aggregate Damages, if any, then claimed by IWEST pursuant to a proper IWEST Disbursement Request or Final Adjudication received by Escrow Agent, IREIC and the Agent in accordance with Section 4(c) below prior to the Final Disbursement Date (each, an “ IWEST Claim ”), which claimed Damages have not been disbursed from the Escrow Fund or otherwise paid or satisfied prior to the Final Disbursement Date.  The entire Final Disbursement Amount shall be made in Escrowed Shares, with each Escrowed Share having a value equal to Ten Dollars ($10.00) or, if the Escrowed Shares are listed on a national securities exchange, the Market Price.  Thereafter, until all amounts in the Escrow Fund have been disbursed, within three (3) Business Days after each IWEST Claim is paid or otherwise resolved (and any payment owed to IWEST pursuant to such resolution has been paid), Escrow Agent shall disburse to IREIC and the Agent the amount by which the Value of the Escrow exceeds the aggregate amount of the then remaining IWEST Claims, making such disbursement by delivering to IREIC and the Agent a number of Escrowed Shares equal to the amount of such balance divided by Ten Dollars ($10.00) or, if the Escrowed Shares are listed on a national securities exchange, the Market Price (subject to rounding upward on a holder by holder basis).

(c)

Releases of Escrowed Shares to IWEST .  At any time during the Term, IWEST may deliver to Escrow Agent, the Agent and IREIC a request in writing for disbursement (an “ IWEST Disbursement Request ”) for (and only for) any Damages for which IREIC and/or any or all of the Stockholders are obligated to provide indemnification under Sections 9.2(a) or 9.5(a) of the Merger Agreement.  Any IWEST Disbursement Request shall be made in good faith and shall set forth the basis on which such Damages are claimed and the amount of such claimed Damages.  A form of an IWEST Disbursement Request is attached hereto as Schedule A .  On the date that is thirty (30) days after receipt of such IWEST Disbursement Request by Escrow Agent, the Agent and IREIC, Escrow Agent shall disburse to IWEST (with no requirement of obtaining the consent, approval or direction of IREIC, Agent or any Stockholder) an amount of Escrowed Shares (valued at Ten Dollars ($10.00) or, if the Escrowed Shares are listed on a national securities exchange, the Market Price, per Escrowed Share) sufficient to fully pay such Damages, unless IWEST and Escrow Agent receive, prior to such date, a written notice from IREIC and the Agent objecting to all or any part of the IWEST Disbursement Request.  Any such objection by IREIC and the Agent shall be made in good faith and shall set forth the basis on which such objection is made and the amount of the disbursement with respect to which such objection is made (the “ Disputed Amount ”).  In such event, Escrow Agent shall disburse only the amount, if any, by which the IWEST Disbursement Request exceeds the Disputed Amount, and Escrow Agent shall disburse all or any portion of the Disputed Amount only upon (A) its receipt of a joint written instruction (a “ Joint Order ”) executed by IREIC, the Agent and IWEST directing such disbursement, or (B) its receipt of a certified copy of a final, non-appeallable arbitral award or decision pursuant to Section 10.4 of the Merger Agreement by an arbitrator of an Arbitrated Claim (a “ Final Adjudication ”), which Arbitrated Claim was the basis of such IWEST Disbursement Request and which Final Adjudication directs Escrow Agent to make such disbursement and specifies the amount thereof (which Escrow Agent shall promptly effectuate in accordance with such instructions or award and this Agreement).

(d)

Voluntary Cancellations of Disbursement Requests .  If IWEST determines that it has no claim or has released or agreed to release its claim with respect to an IWEST Disbursement Request (or a specified portion thereof), IWEST shall promptly deliver to the Escrow Agent a certificate canceling such IWEST Disbursement Request (or such specified portion thereof, as the case may be), and such IWEST Disbursement Request (or portion thereof) shall thereupon be deemed cancelled and the underlying claim (or portion thereof) fully discharged.  The Escrow Agent shall give written notice to IREIC and the Agent of its receipt of a certificate canceling such IWEST Disbursement Request not later than the second Business Day following receipt thereof, together with a copy of such certificate.



3





(e)

Cancellations of Disbursement Requests Pursuant to Final Adjudications .  Upon a Final Adjudication stating that any portion of an IWEST Disbursement Request as to which IREIC and the Agent have delivered written notice objecting is not required to be paid to IWEST pursuant to the Merger Agreement, IWEST, IREIC and the Agent shall promptly deliver to the Escrow Agent a copy of such Final Adjudication canceling such IWEST Disbursement Request, and such IWEST Disbursement Request shall thereupon be deemed cancelled and the underlying claim (or portion thereof) fully discharged.  The Escrow Agent shall give written notice to IWEST, IREIC and the Agent of its receipt of such a certificate not later than the second Business Day following receipt thereof.  Upon receipt by the Escrow Agent of a Joint Order stating that no disbursement is required under the IWEST Disbursement Request or upon the disbursement by the Escrow Agent of Escrowed Shares, such IWEST Disbursement Request shall be deemed cancelled and the underlying claim (or portion thereof) fully discharged.

(f)

Calculation of Amount of Escrowed Shares to be Disbursed .  If any calculation of the amount of Escrowed Shares to be disbursed to IWEST shall result in a fraction, then such fraction shall be rounded up to the next whole number.  In addition, the parties agree that it is their intention that Escrow Agent, in discharging its duties under this Agreement, shall not be required to calculate the amount of Escrowed Shares equivalent to a given sum of cash.

(g)

Breaches of Stockholder Representations .  In the event IWEST delivers an IWEST Disbursement Request that alleges that IWEST is entitled to Damages arising from the breach by a particular Stockholder of any warranty contained in the Letter of Transmittal of such Stockholder, including any warranty that such Stockholder is the record and beneficial owner of the number of Converted Shares as are set forth in the stock record books of the respective Service Provider, that no Person has any agreement or option or any right or privilege capable of becoming an agreement or option to acquire any Converted Shares from such Stockholder or that there are no voting trusts, proxies or other agreements or understandings with respect to the voting of any Equity Interests of the respective Service Provider to which such Stockholder is a party, the Agent shall deliver notice to the Escrow Agent specifying that such Damages be allocated first to and from (by way of a reduction of the Escrowed Shares of) such Stockholder, and then to the Escrow Fund on a pro rata basis in accordance with the total number of IWEST Shares initially placed into the Escrow Fund for each of IREIC and the remaining Stockholders.

(h)

Limitations on Objections .  Notwithstanding anything contained in this Agreement to the contrary, IWEST’s right to object to any disbursement to the Agent (on behalf of the Stockholders) or IREIC pursuant to Section 4(a) or (b) above, and IWEST’s right to seek a disbursement pursuant to Section 4(c) above, are and shall be subject to the limitations set forth in Article IX of the Merger Agreement, including Section 9.3 and Section 9.5 thereof.

(i)

Liability for Objections .  None of IWEST, the Agent or IREIC shall be liable to any other for any objection to any disbursement pursuant to this Section 4 (whether proper or in error) provided that such objection shall have been made in good faith.

(j)

Transfer of Shares .  The parties hereto acknowledge that the Escrowed Shares may only be transferred through the transfer agent for the Escrowed Shares, that Escrow Agent is not the transfer agent with respect to the Escrowed Shares, that Escrow Agent has no control over such transfer agent and that Escrow Agent shall incur no liability as a result of misfeasance or nonfeasance on the part of the transfer agent.  IREIC and the Agent shall promptly deliver to Escrow Agent such executed stock powers as may be required to transfer any Escrowed Shares required to be transferred to IWEST pursuant to this Section 4.  For the avoidance of doubt, in no event shall Escrow Agent be responsible for the failure to transfer any Escrowed Shares resulting from any failure of or delay in the delivery of such stock powers by IREIC and the Agent.  



4





5.

No Sale of Escrowed Shares .  Neither the Agent nor IREIC shall have the right to direct or cause Escrow Agent to sell or otherwise dispose of any of the Escrowed Shares.

6.

Other Disbursements from the Escrow Fund .  Except to the extent expressly provided in this Agreement, none of IREIC, the Agent and IWEST shall have any right or power to withdraw, and Escrow Agent shall not disburse, any of the Escrowed Shares on deposit in the Escrow Fund, absent a joint written direction to such effect executed by IWEST, IREIC and the Agent.

7.

Compensation to Escrow Agent .  Each of (i) IWEST, on the one hand, and (ii) IREIC and/or the Agent (on behalf of the Stockholders), on the other hand, shall pay fifty percent (50%) of the fees, costs and expenses relating to the compensation of Escrow Agent for its services performed pursuant to this Escrow Agreement in accordance with the fee schedule attached as Exhibit A hereto.  In the event of a dispute between IWEST on the one hand and IREIC or the Agent on the other hand concerning disbursement of any Escrowed Shares on deposit in the Escrow Fund, or as a result of interpleader, the party that does not prevail in such dispute shall be responsible for and shall pay all of Escrow Agent’s reasonable attorneys’ fees and costs in connection therewith.

8.

Notices .  All notices, requests and other communications to any party hereunder shall be in writing and shall be given to such party at its address and/or facsimile number set forth below, or such other address or facsimile number as such party may hereafter specify for that purpose, by notice to the other party.

To IREIC or the Agent :


The Inland Real Estate Group, Inc.

2901 Butterfield Road

Oak Brook, Illinois 60523

Attention: Robert H. Baum

Telephone: (630) 218-8000

Fax: (630) 218-8034


with copies (which shall not constitute notice) to:  


The Inland Real Estate Group, Inc.

2901 Butterfield Road

Oak Brook, Illinois  60523

Attention:  Elliot B. Kamenear

Telephone: (630) 218-8000

Fax: (630) 218-4900


Jenner & Block LLP

330 N. Wabash Ave.

Chicago, Illinois 60611

Attention: Arnold S.  Harrison

Donald E. Batterson

Telephone: (312) 222-9350

Fax: (312) 923-2702


To IWEST :


Inland Western Retail Real Estate Trust, Inc.

c/o Special Committee of the Board of Directors

2901 Butterfield Road

Oak Brook, Illinois 60523



5





Attention: Paul R. Gauvreau


with copies (which shall not constitute notice) to:


Sidley Austin LLP

One South Dearborn Street

Chicago, Illinois 60603

Attention: Thomas A. Cole

    Paul L. Choi

Telephone: (312) 853-7000

Fax: (312) 853-7036


and:


Duane Morris LLP

227 West Monroe, Suite 3400

Chicago, Illinois 60606

Attention: David J. Kaufman

Telephone: (312) 499-6700

Fax: (312) 499-6701


To Escrow Agent :


LaSalle Bank National Association

Global Escrow Services

135 South LaSalle Street, Suite 1563

Chicago, IL 60603

Attention:  Mark LoIacono

Telephone: (312) 904-6836

Fax: (312) 904-4019


Each such notice, request or other communication shall be effective only if forwarded by one of the means of delivery set forth in clauses (a) or (b) below, and shall be deemed received (a) if given by facsimile transmission, when such facsimile is transmitted and confirmation of receipt obtained (provided, however, that a duplicate copy shall be forwarded on the date the facsimile transmission by nationally-recognized overnight courier), or (b) if given by nationally-recognized overnight courier, then on the next business day after deposit with a nationally recognized overnight mail service.


9.

Amendments .  No amendment or modification of this Agreement shall be effective unless in writing, signed by all of the parties hereto.

10.

Escrow Agent’s Acceptance and Performance of Duties .  Escrow Agent hereby accepts the obligations and duties imposed upon it by this Agreement, and agrees to perform such obligations and duties subject to the following terms and conditions:

(a)

The obligations and duties of Escrow Agent are confined to those specifically set forth in this Agreement.  In the event that any of the terms and provisions of any other agreement between  IWEST, IREIC and/or the Agent, on the one hand, and the Escrow Agent, on the other hand, conflict or are inconsistent with any of the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern and control in all respects.  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 Escrow Agent or referred to in this Agreement, nor shall the Escrow Agent be obligated to



6





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 same.

(b)

In the absence of bad faith, Escrow Agent may conclusively rely upon written notices, statements and/or documents received from IWEST, the Agent or IREIC, or from a duly authorized representative of IWEST, the Agent or IREIC, as Escrow Agent reasonably believes to be genuine, and shall incur no liability on account of such reliance.

(c)

Escrow Agent shall not be personally liable for any act that it may do or omit to do hereunder in good faith and in the exercise of its own best judgment, except to the extent any such act shall constitute bad faith, gross negligence, willful misconduct or a breach of this Agreement.  Any act done or omitted to be done by Escrow Agent pursuant to the reasonable advice of its attorneys shall be deemed conclusively to have been performed or omitted in good faith by Escrow Agent.

(d)

No provision of this Agreement shall be construed to require Escrow Agent to expend or risk Escrow Agent’s own funds or otherwise incur any financial liability in the performance of any of its obligations or duties hereunder.

(e)

Escrow Agent shall not be responsible for the validity or the execution of this Agreement with respect to the other parties hereto.

(f)

In the event Escrow Agent is notified of any dispute, disagreement or legal action between or among IWEST, on the one hand, and either or both of IREIC and the Agent, on the other hand, arising in connection with the Escrow Fund, or the performance of Escrow Agent's duties under this Agreement, Escrow Agent shall not be required to determine the controversy or to take any action regarding it.  Escrow Agent may hold all documents and contents and may wait for settlement or resolution of any such controversy by final and non-appealable legal proceedings, arbitration, or other means as are legally binding upon the parties.  In such event, Escrow Agent shall not be liable for interest or damages, and shall hold all such documents and contents until it receives a certified copy of an order, decree or judgment issued or rendered by a court of competent jurisdiction or arbitrator, as applicable, accompanied by a certificate (a “ Litigation Certificate ”) executed by the parties to the legal action or arbitration, as the case may be (the “ Presenting Party ”), to the effect that such order, decree or judgment is a final non-appealable judgment or order from a court of competent jurisdiction or arbitrator resolving the dispute as to the disbursement of the applicable portion of Escrow Fund, setting forth in reasonable detail the substance of such judgment and instructions as to the resulting disbursement of the Escrow Fund specified therein and certifying that a copy of such certificate has been concurrently sent by the same means to the other, non-Presenting Party, in which case the Escrow Agent shall disburse the Escrow Fund according to the Litigation Certificate on the fifth (5 th ) business day following receipt by Escrow Agent of the Litigation Certificate; provided that if the non-Presenting Party delivers to Escrow Agent a certificate prior to such fifth (5 th ) business day disputing the contents of the Litigation Certificate, then Escrow Agent shall not disburse the disputed Escrow Funds specified therein and shall interplead the disputed Escrow Funds specified therein into, or file a declaratory judgment action with, a court of competent jurisdiction to determine the rights of the parties to be the disputed Escrow Funds, unless prior to such interpleader or filing Escrow Agent receives a joint written notice and instruction pursuant to Section 8 above.  

Furthermore, Escrow Agent may, at its option, file an action of interpleader requiring such parties to answer and litigate any claims and rights among themselves.  Escrow Agent is authorized, at its option, to deposit with the clerk of the court all documents and funds held in escrow, except all costs, expenses, charges, and reasonable attorneys’ fees incurred by Escrow Agent due to the interpleader action and which the parties agree to pay.



7





(g)

IWEST, IREIC and the Stockholders hereby agree, jointly and severally (i) to indemnify and hold Escrow Agent, and its directors, officers, employees, and agents, harmless from and against all third party claims for costs, damages, judgments, reasonable attorneys’ fees, reasonable expenses, obligations and liabilities of every kind and nature which Escrow Agent, and its directors, officers, employees, and agents, may incur, sustain, or be required to pay in connection with or arising out of this Agreement (including reasonable expenses in enforcing this right of indemnification), unless the aforementioned results from Escrow Agent’s bad faith, gross negligence, willful misconduct or breach of this Agreement, and (ii) to pay Escrow Agent promptly after demand the amount of all such costs, damages, judgments, attorneys’ fees, expenses, obligations, and liabilities.  The foregoing indemnities in this subsection (g) shall survive the resignation or substitution of Escrow Agent or the termination of this Agreement.

(h)

Escrow Agent may resign at any time upon giving at least thirty (30) days prior written notice to IWEST, IREIC and the Agent; provided, however, that no such resignation shall become effective until the appointment of a successor escrow agent which shall be accomplished as follows: IWEST, IREIC and the Agent shall use their reasonable best efforts to select a successor escrow agent within thirty (30) days after receiving such notice.  If IWEST, IREIC and the Agent fail to appoint a successor escrow agent within such time, then Escrow Agent shall have the right to appoint a successor escrow agent.  The successor escrow agent shall execute and deliver an instrument (substantially similar to this Agreement) 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, Escrow Agent shall be discharged from any further duties and liability under this Agreement.  Escrow Agent shall be paid any outstanding fees and expenses prior to transferring assets to a successor escrow agent.

(i)

Any bank or corporation into which Escrow Agent may be merged or with which it may be consolidated, or any bank or corporation to whom Escrow Agent may transfer a substantial amount of its Escrow business, shall be the successor to the Escrow Agent without the execution or filing of any paper or any further act on the part of any of parties, anything herein to the contrary notwithstanding.

11.

Counterparts .  This Agreement and any document or instrument executed pursuant hereto may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

12.

Facsimile Signatures .  This Agreement may be executed and delivered by exchange of facsimile copies showing the signatures of IWEST, the Agent, IREIC and Escrow Agent, and those signatures need not be affixed to the same copy.  The facsimile copies showing the signatures of IWEST, the Agent, IREIC and Escrow Agent will constitute originally signed copies of the same agreement requiring no further execution.

13.

Entire Agreement .  This Agreement, the schedules hereto and the Merger Agreement constitute the entire understanding and agreement of the parties hereto with regard to the subject matter hereof, and supersede all other prior and contemporaneous agreements or understandings between or among such parties with respect to such subject matter.  IWEST, the Agent and IREIC agree that to the extent there are conflicts or inconsistencies between the terms and provisions of the Merger Agreement and the terms and provisions of this Agreement, the terms of the Merger Agreement shall, in all incidents, govern, control and prevail.

14.

Construction .  The headings and captions herein are inserted for convenient reference only and the same shall not limit or construe the paragraphs or Sections to which they apply or otherwise affect the interpretation hereof.  The terms “hereby,” “hereof,” “hereto,” “herein,” “hereunder” and any similar terms shall refer to this Agreement, and the term “hereafter” shall mean after, and the term



8





“heretofore” shall mean before, the date of this Agreement.  Words of the masculine, feminine or neuter gender shall mean and include the correlative words of other genders, and words importing the singular number shall mean and include the plural number and vice versa.  Words importing persons shall include firms, associations, partnerships (including limited partnerships), trusts, corporations and other legal entities, including public bodies, as well as natural persons.  The terms “include,” “including” and similar terms shall be construed as if followed by the phrase “without being limited to.”  This Agreement shall not be construed more strictly against one party than against any other merely by virtue of the fact that this Agreement has been prepared primarily by counsel for one of the parties hereto, it being recognized that all of IWEST, the Agent, IREIC and Escrow Agent (and their respective counsels) have contributed substantially and materially to the preparation of this Agreement.

15.

Choice of Law .  This Agreement shall be governed by and construed in accordance with the internal laws of the State of Illinois applicable to contracts made and performed entirely within the State of Illinois, without giving effect to any rules or laws that would cause the laws of any other jurisdiction to apply.  





[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]




9








IWEST’S COUNTERPART SIGNATURE PAGE TO

ESCROW AGREEMENT



IN WITNESS WHEREOF , the parties hereto have executed this Agreement as of the day and year first written above.


IWEST :


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.



By:

Name:

Its:










AGENT’S COUNTERPART SIGNATURE PAGE TO

ESCROW AGREEMENT



IN WITNESS WHEREOF , the parties hereto have executed this Agreement as of the day and year first written above.


THE AGENT :


IWEST MERGER AGENT, LLC


By:

Name:

Its:












IREIC’S COUNTERPART SIGNATURE PAGE TO

ESCROW AGREEMENT



IN WITNESS WHEREOF , the parties hereto have executed this Agreement as of the day and year first written above.


IREIC :


INLAND REAL ESTATE INVESTMENT

CORPORATION



By:

Name:

Its:










ESCROW AGENT’S COUNTERPART SIGNATURE PAGE TO

ESCROW AGREEMENT



IN WITNESS WHEREOF , the parties hereto have executed this Agreement as of the Day and year first written above.


ESCROW AGENT :


LASALLE BANK, N.A.



By:

Name:

Its:













SCHEDULE A


IWEST Disbursement Request



LETTER OF DIRECTION


TO:

LaSalle Bank, N.A.


RE:

Escrow No. _________________________ (the “ Escrow ”)


DATED:

______________



Ladies and Gentlemen:


With respect to the above-referenced Escrow and pursuant to that certain Escrow Agreement, dated as of ___________, 2007 (the “ Escrow Agreement ”), among the undersigned, you, IWEST Merger Agent, LLC, in its capacity as agent for the Stockholders (the “ Agent ”), and Inland Real Estate Investment Corporation (“ IREIC ”), you are hereby requested to disburse to the undersigned ________________ Escrowed Shares in satisfaction of the obligation of IREIC and the Stockholders under Section(s) _______________________ of the Merger Agreement.


[Provide reasonably detailed description of factual and legal basis for claim.]


A copy of this Letter of Direction has been sent simultaneously to IREIC and the Agent in accordance with Section 8 of the Escrow Agreement.  If you have any questions or comments, or receive any objection from IREIC or the Agent to the foregoing requested disbursement, please call us as soon as possible.


Very Truly Yours,


INLAND WESTERN RETAIL REAL ESTATE TRUST,

INC.



By:

Name:

Its:




cc:

IREIC

Agent








EXHIBIT A


ESCROW AGENT

SCHEDULE OF FEES


Acceptance Fee:

$                 500.00*


Annual Administration Fee:

$              2,500.00*


Wire Transfers

$                   20.00 each

Check Preparation and Mailing

$                   25.00 each

1099 Preparation and Reporting

$                5.00 each ($250 annual minimum if any 1099 reports required for account)

THE ACCEPTANCE AND FIRST YEAR’S ANNUAL ADMINISTRATION FEES ARE DUE UPON EXECUTION OF THE ESCROW AGREEMENT.

*Should the Escrow Account remain open for less than a full year after an initial twelve month period, the Annual Administration Fee will be prorated on a six-month basis.

Any investment transaction not in a money market fund or a LaSalle Enhanced Liquidity Management account will incur a $150.00 per transaction fee. The parties to the agreement understand and agree that the Escrow Agent may receive certain revenue on certain mutual fund investments.  These revenues take one of two forms:

Shareholder Servicing Payments: Escrow Agent may receive Shareholder Servicing Payments as compensation for providing certain services for the benefit of the Money Market Fund Company.  Shareholder Services typically provided by LaSalle include the maintenance of shareholder ownership records, distributing prospectuses and other shareholder information materials to investors and handling proxy-voting materials. Typically Shareholder Servicing payments are paid under a Money Market Fund’s 12b-1 distribution plan and impact the investment performance of the Fund by the amount of the fee. The shareholder servicing fee payable from any money market fund is detailed in the Fund’s prospectus that will be provided to you.   

Revenue Sharing Payments: Escrow Agent may receive revenue sharing payments from a Money Market Fund Company. These payments represent a reallocation to Escrow Agent of a portion of the compensation payable to the fund company in connection with your account’s money market fund investment. Revenue Sharing payments constitute a form of fee sharing between the fund company and Escrow Agent and do not, as a general rule, result in any additional charge or expense in connection with a money market fund investment, are not paid under a 12b-1 plan, and do not impact the investment performance of the Fund.  The amount of any revenue share, if any, payable to Escrow Agent with respect to your account’s investments is available upon request.

All out-of-pocket expenses will be billed at the Escrow Agent’s cost.  Out-of-pocket expenses include, but are not limited to, professional services (e.g. legal or accounting), travel expenses, telephone and facsimile transmission costs, postage (including express mail and overnight delivery charges), and copying charges.







EXHIBIT 10.532

EXECUTION COPY

INSTITUTIONAL INVESTOR RELATIONSHIPS SERVICES AGREEMENT

This Institutional Investor Relationships Services Agreement (this “Agreement”), executed on November 15, 2007 and effective as of May 3, 2006 (the “Effective Date”), is entered into by and between INLAND INSTUTIONAL CAPITAL PARTNERS CORPORATION, an Illinois corporation (“Service Provider”), and INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC., an Illinois corporation (the “Business Manager”).

RECITALS

WHEREAS, Service Provider is in the business of providing certain equity capital relationship services, including without limitation, the services described and set forth in Exhibit A hereto (collectively, the “Services”); and

WHEREAS, the Business Manager is desirous of retaining Service Provider to perform the Services for the Business Manager in connection with the Real Estate Business (as defined herein) for the benefit of REIT (as defined herein) and/or its Affiliates (as defined herein), and Service Provider is willing to perform the Services, subject to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and obligations set forth below, the parties hereto, intending to be legally bound, agree to the foregoing and as follows:

ARTICLE I
DEFINITIONS

“ Affiliate ” shall mean, except as otherwise provided herein, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, that Person.  For the purposes of this definition, “control” (including, with correlative meaning, the terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of that Person through the ownership of voting securities, by contract or otherwise.  With respect to the Business Manager, any entity representing a joint venture or similar arrangement in which the Business Manager, or an entity controlled by the Business Manager, is the general partner or managing member shall be deemed to be an “Affiliate” of the Business Manager.

 “ Business Management Agreement ” shall mean that certain Advisory Agreement, dated as of September 18, 2003, as amended from time to time, between the Business Manager and REIT.

“ Person ” shall mean an individual, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“ Real Estate Business ” shall mean (i) any business activities conducted by REIT so long as REIT remains qualified as a “real estate investment trust” under Section 856 the Internal Revenue Code of 1986, as amended, and (ii) any business that is consistent with and limited to the description of the business of REIT contained in the prospectus forming a part of the Registration Statement on Form S-11



1




(No. 333-122743), as amended, filed by REIT with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended.

“ REIT ” shall mean Inland Western Retail Real Estate Trust, Inc., a Maryland corporation.

ARTICLE II

PERFORMANCE OF SERVICES


2.1

Service Provider agrees to perform the Services for the Business Manager in connection with the Real Estate Business of the REIT and/or its or their Affiliates.  Service Provider shall perform and provide the Services in a professional manner and in accordance with all laws, statutes, ordinances, codes, rules and regulations applicable to the Services.  Service Provider, at Business Manager’s cost, may employ, contract with or use the service of any third party in connection with the performance of the Services as the Service Provider deems reasonably necessary or desirable, including independent, outside counsel.

2.2

The Business Manager and Service Provider acknowledge that the

Services to be provided by Service Provider hereunder are to be provided on a non-exclusive basis such that Business Manager shall be permitted to employ other parties to perform any one or more of the Services and that Service Provider shall be permitted to perform any one or more of the Services to other parties.

ARTICLE III

TERM AND TERMINATION


3.1

Subject to the termination provisions set forth in this Article III , this Agreement shall continue for an initial period of four (4) years from the Effective Date (“Initial Services Term) and shall be automatically renewed for consecutive three (3) year terms thereafter (each an “Additional Services Term”) unless earlier terminated as hereafter provided.

3.2

At any time during the Initial Services Term or at any time during an Additional Services Term, the Business Manager may terminate this Agreement for cause ( i.e ., a material default by Service Provider hereunder) upon ten (10) days’ prior written notice to Service Provider; provided, however, that prior to exercising its rights under this Section 3.2 , the Business Manager shall notify Service Provider of any default, and Service Provider shall have thirty (30) days after receipt of the notice to cure the default to the Business Manager’s reasonable satisfaction.  As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for the Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement, including any accrued Advisory Fee, and in addition, Business Manager shall continue and promptly pay to Service Provider future Client Relation success fees, as set forth in Section 2 of Exhibit A, as funds are called for under applicable venture agreements, through and including the final fund draw by the venture. The terms of the immediately proceeding sentence shall indefinitely survive any expiration or earlier termination of this Agreement.

3.3

At any time during the Initial Services Term or during an Additional Services Term, the Business Manager shall have the right to terminate this Agreement, without cause, by providing not less than one hundred eighty (180) days’ prior written notice to Service Provider of any election to terminate and specifying the effective date of such termination. As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for the Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement, including any accrued Advisory Fee, and in addition, Business Manager shall continue and promptly pay to Service Provider future Client Relation success fees, as set forth in Section 2 of Exhibit A, as funds are called for under applicable venture agreements, through and including the final fund draw by the venture. The



2




terms of the immediately proceeding sentence shall indefinitely survive any expiration or earlier termination of this Agreement.

3.4

Provided that Service Provider is not providing or is terminating such Services to all other clients of Service Provider, and no affiliate of Service Provider is providing or is undertaking to provide such Services, Service Provider, at any time during the Initial Services Term or during an Additional Services Term, may elect to limit one or more of the Services it is providing to the Business Manager upon not less than thirty (30) days’ prior written notice to the Business Manager, specifying the effective date such Services shall no longer be performed and describing in reasonable detail the Services to be terminated.  As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for the Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement, including any accrued Advisory Fee, and in addition, Business Manager shall continue and promptly pay to Service Provider future Client Relation success fees, as set forth in Section 2 of Exhibit A, as funds are called for under applicable venture agreements, through and including the final fund draw by the venture. The terms of the immediately proceeding sentence shall indefinitely survive any expiration or earlier termination of this Agreement.

3.5

If at any time during the Initial Services Term or any Additional Services Term the REIT has had a Change of Control, as hereinafter defined, Service Provider shall have the right to terminate this Agreement, without cause, upon not less than thirty (30) days written notice to Business Manager. At any time during the Initial Services Term or any Additional Services Term, and the REIT has not had a Change of Control, Service Provider shall have the right to terminate this Agreement, without cause, by providing not less than one hundred eighty (180) days’ prior written notice to the Business Manager, specifying the effective date of such termination. The foregoing notwithstanding, Service Provider, upon ten (10) days’ prior written notice to the Business Manager, may terminate this Agreement, or decline to provide a particular Service hereunder upon the occurrence of any of the following events:

(a)

The Business Manager fails, in the absence of a bona fide dispute with respect to any payment, to make payment for Services on its due date; provided, however, the Business Manager may cure the breach up to three (3) times per calendar year by making payment within ten (10) days of the Business Manager’s receipt of written notice that it failed to make the payment when due;

(b)

The Business Manager requests that Service Provider provide Services that in the Service Provider’s opinion would violate any applicable law or the rules of any regulatory body with jurisdiction and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid opinion;

(c)

The Business Manager requests that Service Provider take any action  that in the Service Provider’s opinion would result in the commission of a fraud upon any person or party and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid opinion;

(d)

The Business Manager requests that Service Provider take any action that, upon the advice of counsel to Service Provider, could subject Service Provider to liability or material damages in civil litigation and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid advice of counsel; or

(e)

The Business Manager requests that Service Provider provide Services that upon advice of counsel to Service Provider would cause Service Provider or any of its employees to be



3




in violation of its professional code of ethics or other ethical standards the Service Provider or any of its employees is subject to and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s counsel’s advice.  

As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for the Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement, including any accrued Advisory Fee, and in addition, Business Manager shall continue and promptly pay to Service Provider future Client Relation success fees, as set forth in Section 2 of Exhibit A, as funds are called for under applicable venture agreements, through and including the final fund draw by the venture. The terms of the immediately proceeding sentence shall indefinitely survive any expiration or earlier termination of this Agreement.

3.6

Upon any termination of this Agreement or cessation of Services arising under Sections 3.2 or 3.4 of this Agreement, during the Initial Services Term or any Additional Services Term, Service Provider shall provide the Business Manager with a reasonable opportunity to transition any terminated Services to any replacement provider(s) designated by the Business Manager (“Replacement Provider”), which period shall not be more than sixty (60) days from the date of termination of this Agreement or specified terminated Services (the “Transition Period”).  During the Transition Period, Service Provider shall use reasonable efforts to avoid causing any unnecessary interruption of the terminated Services so as to provide a smooth transition of such Services (the “Transition”).  All services related to Transition shall be deemed Services and subject to the charges and fees set forth in Exhibit A attached hereto.

3.7

For the purposes hereof, the term “Change of Control” shall mean the occurrence of any one or more of the following:


(a)

Any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the REIT to any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended; provided, however, that any sale, lease, exchange or transfer to (including, without limitation, any merger or other business combination with or into) any of the following shall not constitute a Change of Control:  (i) any affiliate controlled by the REIT, (ii) Inland Real Estate Corporation, (iii) Inland American Real Estate Trust, Inc., (iv) The Inland Group, Inc., or (v) any affiliate controlled by any of the entities listed in clauses (i) through (iv) above (all of the entities described in clauses (i) through (v) above are hereinafter sometimes referred to as the “Inland Companies”;


(b)

The approval by the holders of the outstanding shares of the REIT of any plan or proposal for the liquidation or dissolution of the REIT; or


(c)

Any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (other than any one or more of the Inland Companies) shall become the owner, directly or indirectly, beneficially or of record, of shares of the REIT representing more than twenty-five percent (25%) of the aggregate ordinary voting power represented by the issued and outstanding common shares of the REIT.


ARTICLE IV

INTERNAL CONTROL PROCEDURES




4




4.1

As a public entity, REIT is required to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as may be amended from time to time (“Section 404”).  Notwithstanding anything to the contrary contained in this Agreement (including, without limitation, Article III and Section 8.4 hereof), if the Business Manager shall determine that, to provide services to and for the benefit of the Business Manager and REIT, Service Provider must comply with the requirements of Section 404, then the Business Manager and Service Provider shall develop and implement an internal control plan or other processes and procedures (or amend and revise any existing internal control plan, processes and procedures) to comply with the requirements (collectively, the “Internal Control Plan”).  Once developed and implemented, Service Provider shall use its reasonable best efforts to have its internal controls comply in all respects with the requirements of Section 404.  The cost and expense of development and initial implementation of any Internal Control Plan shall be borne by all clients of Service Provider that require Service Provider to comply with Section 404.  Upon determination that an Internal Control Plan must be developed and implemented, Service Provider, the Business Manager and all other clients of Service Provider requiring Service Provider to comply with Section 404 shall, in good faith, negotiate an equitable allocation of the costs and expenses of the development and implementation of the Internal Control Plan between and among the parties.  The foregoing provisions regarding payment and allocation of the costs and expenses of development and implementation of any Internal Control Plan shall not apply to any Internal Control Plan developed and implemented, or in the process of being developed and implemented, on or prior to the date of this Agreement.



ARTICLE V

PAYMENT


5.1

Service Provider shall invoice the Business Manager quarterly (or any other basis as reasonably agreed to by the Business Manager) for any Services performed during the immediately preceding calendar quarter (or any other period agreed to by the Business Manager).  Payment shall be due thirty (30) days after the date of the Business Manager’s receipt of the same and shall be as provided in Section 2 of Exhibit A attached hereto.  The compensation to be paid by the Business Manager under this Article V and Section 2 of Exhibit A attached hereto shall constitute full and complete payment for any and all services rendered and performed by Service Provider under and pursuant to this Agreement, which compensation includes any and all labor, costs and expenses incurred or to be incurred by Service Provider in connection with its performance of the Services.  


ARTICLE VI

RIGHT TO AUDIT


6.1

Service Provider shall keep and make available for the examination and audit of or by the Business Manager, or the Business Manager’s authorized employees, agents or representatives during normal business hours, and upon reasonable prior notice, at the Business Manager’s cost, all data, materials and information, including but not limited to records of all receipts, costs and disbursements made by Service Provider with respect to the Services and all Operating Expenses (as defined in Exhibit A attached hereto), all books, accounts, memoranda, files and all or any other documents indicating, documenting, verifying or substantiating the cost and appropriateness of any and all costs, expenditures and receipts relating to the Services and/or Operating Expenses.  Service Provider shall allow the Business Manager (and any of the Business Manager’s employees, representatives, accountants and auditors) reasonable access to personnel, representatives and employees of Service Provider and all books and records and other business records and files of Service Provider that are reasonably required by the Business Manager for audit and tax matters.



5





ARTICLE VII
CONFIDENTIALITY

7.1

During the term of this Agreement, the parties may communicate to each other certain confidential information to enable Service Provider to perform the services hereunder, and/or Service Provider may develop confidential information for the Business Manager.  Each party agrees:

(a)

to treat, and to cause its employees, agents, subcontractors and representatives, if any, to treat as secret and confidential, all confidential information; and

(b)

except as necessary in the performance of the Services, not to disclose any confidential information or make available any reports, recommendations and/or conclusions which Service Provider may make for the Business Manager to any person, firm or corporation without first obtaining the Business Manager’s written approval.

7.2

If any party learns that disclosure of confidential information is sought in or by a court or governmental body of competent jurisdiction or through other means, the party shall:

(a)

give prompt notice to the other party prior to making the disclosure and allow the other party, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, confidential information;

(b)

reasonably cooperate with the other party in its efforts to prevent, or obtain a protective order for disclosure; and

(c)

disclose the minimum amount of information required to be disclosed.

ARTICLE VIII
MISCELLANEOUS

8.1

Binding Effect .  This Agreement shall be binding upon, and inure to the benefit of, the successors and assigns, if any, of each party hereto.

8.2

Governing Law; Jurisdiction .  This Agreement shall be subject to and governed by the internal laws of the State of Illinois without regard to principles of choice of law.  The parties hereto each agree that all disputes arising hereunder shall be tried in the federal and state courts located in Cook County or DuPage County, State of Illinois, and each party hereby agrees to submit to the exclusive jurisdiction of those courts.

8.3

Waiver .  Either party’s failure to exercise any right under this Agreement shall neither constitute a waiver of any other terms or conditions of this Agreement with respect to any other or subsequent breach, nor a waiver by that party of its right at any time thereafter to require exact and strict compliance with the terms of this Agreement.

8.4

Independent Contractors .  The parties acknowledge and agree that they are dealing with each other hereunder as independent contractors.  Nothing contained in the Agreement shall be interpreted as constituting either party to be the joint venturer or partner of the other party or as conferring upon either party the power or authority to bind the other party in any transaction with third parties.

8.5

Equitable Relief and Monetary Damages .  Each party hereto recognizes and acknowledges that a breach by the other party to this Agreement will cause irreparable damage to the non-breaching party that cannot



6




be readily remedied in monetary damages in an action at law.  In the event of any default or breach by either party, the non-breaching party shall be entitled to seek immediate injunctive relief to prevent irreparable harm, loss or dilution in addition to any other remedies available.  Nothing herein shall limit a non-breaching party’s right to seek monetary damages with respect to a breach.

8.6

Entire Agreement .  This Agreement, including the exhibits hereto, constitutes the entire agreement between the parties and contains all of the terms and conditions of the agreement between the parties with respect to the subject matter hereof.  This Agreement supersedes any and all other agreements, whether oral or written, between the parties hereto, including any Affiliates of Service Provider, with respect to the subject matter hereof.  No change or modification of this Agreement shall be valid unless the same shall be in writing and signed by the parties hereto.

8.7

Severability .  If any provisions of this Agreement, or the application of any such provisions to parties hereto, shall be held by a court of competent jurisdiction to be unlawful or unenforceable, the remaining provisions of this Agreement shall nevertheless be valid, enforceable and shall remain in full force and effect, and shall not be affected, impaired or invalidated in any manner.

8.8

Headings .  The headings in this Agreement are inserted for convenience only and are not to be considered in the interpretation or construction of the provisions hereof.

8.9

Notices .  All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given or delivered:

(a)

when delivered personally or by commercial messenger;

(b)

one (1) business day following deposit with a recognized overnight courier service, provided the deposit occurs prior to the deadline imposed by the overnight courier service for overnight delivery; or

(c)

when transmitted, if sent by facsimile copy, provided confirmation of receipt is received by sender and such notice is sent by an additional method provided hereunder;

in each case above provided the notice or other communication is addressed to the intended recipient thereof as set forth below:

If to Service Provider, to:

Inland Institutional Capital Partners Corporation

2901 Butterfield Road

Oak Brook, IL  60523

Attention:

George Pandaleon

Facsimile:       (630) 218-2247

 

 

If to the Business Manager, to :

Inland Western Retail Real Estate Advisory Services, Inc.

2901 Butterfield Road

Oak Brook, IL  60523

Attention:

Roberta S. Matlin

Facsimile:       (630) 218-4955


A party’s address for notice may be changed from time to time by notice given to the other party in the manner herein provided for giving notice.



7




8.10

Further Assurance .  Each party to this Agreement agrees to execute and deliver any and all documents, and to perform any and all further acts that may be reasonably necessary to carry out the provisions of this Agreement and the transactions contemplated hereby.

8.11

Counterparts .  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

8.12

Assignment .  The Business Manager shall not assign this Agreement without the prior express written consent of the Service Provider; provided, however, if the REIT shall acquire or consolidate its business with the Business Manager, this Agreement shall be and be deemed assigned by the Business Manager to the REIT with the REIT assuming all of the obligations of Business Manager under the terms of this Agreement effective the date of such acquisition or consolidation.  Service Provider shall not assign this Agreement without the prior express written consent of the Business Manager.



8




IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

THE BUSINESS MANAGER:

 

SERVICE PROVIDER:

 

 

 

INLAND WESTERN RETAIL REAL ESTATE  

 

INLAND INSTITUTIONAL CAPITAL PARTNERS CORPORATION  

ADVISOR Y SERVICES, INC.,   an Illinois corporation

 

an Illinois corporation

 

 

 

 

 

 

By:

 

 

By:

 

Name:

 

 

Name:

 

Its:

 

 

Its:

 






























[Signature Page to Institutional Investor Relationships Services Agreement]




9







EXHIBIT A


1.

     SERVICES


The goal of Inland Institutional Capital Partners Corporation (“I-CAP” or Service Provider”) will be to assist Inland Western Retail Real Estate Advisory Services, Inc.’s (the “Business Manager”) with the formation of institutional investor relationships to supply equity capital to expand Assets Under Management. Our role will be to provide strategic counsel on the firm’s market position with institutional investors, assist your management team with the refinement of Inland Western Retail Real Estate Trust, Inc.’s (“Inland Western” or “REIT”) investment product design, qualify investor candidates and arrange equity commitments.


Program Objectives


The primary goal of our program will be to (i) advise the Inland Western management team regarding its current market position and the design of its institutional investor concept for retail properties, and (ii) secure institutional investor commitments by:


1.

Assisting the Inland Western management team with the refinement of its overall strategy for expanding its institutional investor relationships.


2.

Evaluating Inland Western’s current market position in the institutional investment community and the firm’s affiliation with investors such as NYSTRS, Utah Retirement System, Minto Builders, and AIG Global Real Estate to provide recommendations on the general approach to future institutional investors.


3.

Assisting Inland Western with the refinement and presentation of its investment strategy for institutional investors.


4.

Targeting institutional investors capable of serving as strategic equity partners to Inland Western.


5.

Educating a select group of sophisticated institutional investors regarding Inland Western’s real estate philosophy, investment strategy and growth plans.


6.

Introducing the Inland Western team directly to the senior institutional real estate investment decision-makers.


7.

Counseling the Inland Western team on specific investor presentations.


8.

Arranging and attending meetings with institutional real estate investors.


9.

De-briefing investors following the Inland Western presentations.


10.

Assisting with the structure of the relationship between Inland Western and the institutional investors.


11.

Negotiating and closing specific institutional investor commitments.









Program Approach


Fundamentally, our approach is to serve as an extension of your organization, providing guidance and counsel as required by the Inland Western team. Our activities will initially concentrate on Inland Western’s overall investment and operating strategy for presentation to the institutional investor community. Then we will test market the Inland Western strategy with a select group of sophisticated institutional investors. As the most appropriate investor candidates are identified, we will precisely tailor the one-on-one presentations for each qualified investor to facilitate future equity commitments to Inland Western.


We recommend the following approach to institutional investors:


1. Program Design : As a first step, we will work jointly with the Inland Western management team to refine the product design for institutional investors, which may take the form of a strategic partnership or investor 'club'. During a series of meetings we will work together to evaluate formats for the institutional investor program, which will form the basis of the Inland Western presentation to future investors.


2. Analysis of Competitive Position and Organizational Structure – I-CAP will review the current organizational structure of Inland Western and provide a comparison to retail real estate industry peers that are active with institutional partners. I-CAP will make specific recommendations relating to processes and organization to ensure Inland Western is well positioned for future institutional investors.


3. Target Investors : We will jointly review certain institutional investors we believe are well qualified to form a relationship with Inland Western. These investors will be targeted from the community of institutional investors that are well suited to enabling Inland Western to expand its investment programs.


4. Investor Marketing Presentation: We will work jointly with the Inland Western team to prepare presentations for institutional investors that communicate the fundamental opportunity with retail property and other Inland Western strategies. I-CAP will work closely with the Inland Western team members to ensure that marketing materials and other investor documents are prepared to meet the highest industry standards and reflect the firm’s competitive advantages, corporate strategy and overall brand of The Inland Real Estate Group of Companies.


5. Investor Interviews: We will interview a select group of institutional investors to evaluate their ability to commit equity to Inland Western. Following each investor interview, Inland Western will receive a debrief summarizing the results of our contact with the investor and the next steps to prepare for the investor presentation.


6. One-on-One Meetings : For the most appropriate institutional investors, we will assist in the preparation of specific investor presentations and join the Inland Western team for meetings with each interested investor.

7.

N egotiations : We will advise the Inland Western team on negotiations with specific investors, and work toward the closing of specific investor commitments.








8.

Consultant Advocacy: Our program will be oriented to those large investors that typically commit to real estate strategies without relying on the services of pension real estate consultants. In the event the target investor clients utilize the services of a consultant during the commitment process, we will provide guidance to the Inland Western team as may be required to ensure the formation of the investor relationship.


9.

Continuing Representation: As a result of our on-going communication with the institutional real estate community, I-CAP meets frequently with institutional investors who may be interested in a future relationship with Inland Western. We will keep you apprised in the event we become aware of investor interest outside the initial target group.


Project Initiation


This Agreement shall serve as a “Master” document.  As I-Cap is assigned projects by Inland Western,

Schedule A, attached hereto, will be amended to include each initiative.  All billings will be identified with a particular project listed on Schedule A. Inland Western shall only be responsible for any fees to I-Cap with respect to the particular projects listed on Schedule A, each of which can be terminated after six months of engagement with thirty (30) days prior notice.  If Inland Western shall terminate I-Cap with respect to a project, no further fees under Section 2 below shall be due.


Program Timing


We anticipate an initial phase of 120 days of advisory activity. During the first 30 days of the program, we will focus on refining the Inland Western investment strategy and initial qualification of the target investor candidates. We will also commence preliminary due diligence on Inland Western properties which are representative of future investments to be undertaken within the scope of the program. The second 30 days will be concentrated on interviewing the most appropriate institutional investors, followed by approximately 60 days of one on one meetings focused on securing the institutional investor commitments.


The second phase of the program will be ongoing in nature, and will be focused on closing the venture(s) and ensuring their ongoing success and expansion.  I-Cap will participate in periodic meetings between Inland Western and the institutional investor(s), maintain continuous contact with all of the parties to the venture(s), support Inland Western’s development of financial reporting and analysis necessary to operate the venture(s), and work with Inland Western’s management team to pursue opportunities to expand the relationships for the benefit of the shareholders.  


2.

COMPENSATION


I-CAP is to earn an Advisory Fee, as defined below, and a Client Relation Fee, as defined below.


Advisory Fee


The fee for advisory services relating to Inland Western’s corporate strategy, program design, analysis of market position, investor targeting/qualification, and ongoing support will be $250 per hour for Principals, and $100 per hour for Associates (“Advisory Fee”), plus expenses. Project expenses will pertain to travel, overnight document delivery, and out-of-pocket items and are generally in the range of 10% of the advisory fee. The Advisory Fee will be accrued during each quarter, and I-Cap will provide invoices quarterly which will be payable within 30 days of receipt.  Project expenses will be reimbursed








within 30 days of receipt. Additional advisory activities beyond the initial 120 day program relating to activities such as ongoing investor negotiations and consultant advocacy will be accrued quarterly as incurred.  The Advisory Fee will be offset by any Client Relations Fee (see below).   The parties acknowledge that these hourly billing rates are currently, and will remain, substantially below hourly billing rates for comparable services available in the open market.


Client Relations Fee


As an “offset” to any Client Relations Fee due hereunder, Inland Western shall credit (subtract) or offset any Advisory Fees paid or due with respect to the applicable venture. Inland Western will compensate I-CAP based upon the schedule below, for Investor Commitments, as defined below, provided to Inland Western during the applicable venture Investment Period, as defined below (the “Client Relations Fee”).  These fees will be paid to I-CAP as investor funds are invested in the venture, and will be billed quarterly in arrears. Investor Commitments shall be the amount of equity capital actually invested by outside investors in the entities listed on Schedule A. Investment Period shall be the period/time during which investments are actually made in the Inland Western affiliated entities listed on Schedule A.


Relationships with new Inland Group Investors

        35 Basis Points

Relationships with existing Inland Group Investors

        25 Basis Points


The parties acknowledge that these Client Relations Fees are currently, and will remain, substantially below the fees for comparable services available in the open market.


Should this agreement be terminated by either party, I-CAP will submit to Inland Western, within 60 days after the end of the contract period, a schedule of investors who have been contacted on behalf of Inland Western, along with a schedule of committed but un-invested capital, for which future “success fees” will become due upon funding.


Should the marketing effort fail to produce a partnership acceptable to Inland Western, any accrued and unpaid Advisory Fees will be due and payable to I-CAP.


There may be other fees payable to third parties, which will be approved in advance by Inland Western.

The Advisory Fees, costs, expenses and disbursements to be charged by I-CAP shall reflect the actual time (on an hourly basis, in increments of one-half of one hour), expenses and disbursements spent by the I-CAP.  From time to time upon the Business Manager’s request, I-CAP shall provide a list of all employees of I-CAP providing any of the services under this Agreement.  Additionally, the aforementioned billing rates shall be subject to change by I-CAP on an annual basis (as of January 1 of each calendar year), provided, however, that the billing rates charged by I-CAP hereunder shall be no greater than the billing rates charged to any other client of I-CAP.  Each employee of I-CAP shall keep and maintain, and make available to the Business Manager upon request, a record (“Timesheets”) of all the Business Manager transactions on which each such employees work, which record shall set forth the following:  (i) the specific matter worked on; (ii) the actual amount of time spent on the matter for the








applicable calendar month and for the transaction/matter on a cumulative basis; (iv) the hourly billing rates applicable to the employee; and (v) a general description of the nature of the work and services performed.  Upon request by the Business Manager, each invoice for Service rendered by I-CAP shall include a copy of each employee’s Timesheets supporting the amount requested for payment in the invoice.









SCHEDULE A

State of Florida (Morgan Stanley) Joint Venture


Mirvac Net Lease Joint Venture


Six Pines Portfolio Joint Venture


NNN Retail Portfolio Joint Venture


Flatley Portfolio Joint Venture

.






Exhibit 10.533

INSURANCE AND RISK MANAGEMENT SERVICES AGREEMENT

This Insurance and Risk Management Services Agreement (this “Agreement”), dated as of January 1, 2004 (the “Effective Date”), is entered into by and between INLAND RISK AND INSURANCE MANAGEMENT SERVICES, INC., an Illinois corporation (“Service Provider”) and INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC., an Illinois corporation (the “Business Manager”).

RECITALS

WHEREAS, Service Provider is in the business of providing certain insurance and risk management services, including without limitation, the insurance and risk management services described and set forth in Exhibit A hereto (collectively, the “Services”); and

WHEREAS, the Business Manager is desirous of retaining Service Provider to perform the Services for the Business Manager in connection with the Real Estate Business (as defined herein) for the benefit of REIT (as defined herein) and/or its Affiliates (as defined herein), and Service Provider is willing to perform the Services, subject to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and obligations set forth below, the parties hereto, intending to be legally bound, agree to the foregoing and as follows:

ARTICLE I
DEFINITIONS

“Affiliate” shall mean, except as otherwise provided herein, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meaning, the terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of that Person through the ownership of voting securities, by contract or otherwise. With respect to the Business Manager, any entity representing a joint venture or similar arrangement in which the Business Manager, or an entity controlled by the Business Manager, is the general partner or managing member shall be deemed to be an “Affiliate” of the Business Manager.

“Business Management Agreement” shall mean that certain Advisory Agreement, dated as of September 18, 2003, as amended from time to time, between the Business Manager and REIT.

“Person” shall mean an individual, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Real Estate Business” shall mean (i) any business activities conducted by REIT so long as REIT remains qualified as a “real estate investment trust” under Section 856 the Internal Revenue Code of 1986, as amended, and (ii) any business that is consistent with and limited to the description of the business of REIT contained in the prospectus forming a part of the Registration Statement on Form S-11 (No. 333-122743), as amended, filed by REIT with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended.

“REIT” shall mean Inland Western Retail Real Estate Trust, Inc., a Maryland corporation.



1


ARTICLE II
PERFORMANCE OF SERVICES

2.1 Service Provider agrees to perform the Services for the Business Manager in connection with the Real Estate Business of the REIT and/or its or their Affiliates. Service Provider shall perform and provide the Services in a professional manner and in accordance with all laws, statutes, ordinances, codes, rules and regulations applicable to the Services. Service Provider, at Business Manager’s cost, may employ, contract with or use the service of any third party in connection with the performance of the Services as the Service Provider deems reasonably necessary or desirable, including independent, outside counsel.

2.2 The Business Manager and Service Provider acknowledge that the relationship created hereby is on an exclusive basis as to Business Manager such that during the Initial Services Term and any Additional Services Term (except during any period that Service Provider is in default hereunder), (x) the Business Manager shall be required to retain only the Service Provider to perform all of the Services or any individual Service, (y) the Business Manager shall not be permitted to retain third parties to perform for the Business Manager services the same as or similar to the Services or any individual Service, but that in any event Service Provider shall be permitted to perform the Services or any individual Service for any other parties.

ARTICLE III
TERM AND TERMINATION

3.1 Subject to the termination provisions set forth in this Article III , this Agreement shall continue for an initial period of four (4) years from the Effective Date (“Initial Services Term) and shall be automatically renewed for consecutive three (3) year terms thereafter (each an “Additional Services Term”) unless earlier terminated as hereafter provided.

3.2 At any time during the Initial Services Term or at any time during an Additional Services Term, the Business Manager may terminate this Agreement for cause ( i.e ., a material default by Service Provider hereunder) upon ten (10) days’ prior written notice to Service Provider; provided, however, that prior to exercising its rights under this Section 3.2, the Business Manager shall notify Service Provider of any default, and Service Provider shall have thirty (30) days after receipt of the notice to cure the default to the Business Manager’s reasonable satisfaction. As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for the Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.

3.3 At any time during the Initial Services Term or during an Additional Services Term, the Business Manager shall have the right to terminate this Agreement, without cause, by providing not less than sixty (60) days’ prior written notice to Service Provider of any election to so terminate and specifying the effective date of such termination; provided, however, in such event, Service Provider shall be entitled to and shall be paid a termination fee equal to the product of: (a) the average monthly compensation, set forth on Exhibit A, for the six (6) months immediately preceding the month in which the Service Provider is served the termination notice from the Business Manager, multiplied by (b) six (6) (“Termination Fee”). The Termination Fee shall be paid on the effective date of such termination with a credit to Business Manager for compensation paid to Service Provider for the period from the date of Service Provider’s receipt of the termination notice to and including the effective date of such termination.

3.4 Provided that Service Provider is not providing or is terminating such Services to all other clients of Service Provider, and no affiliate of Service Provider is providing or is undertaking to provide such Services, Service Provider, at any time during the Initial Services Term or during an Additional



2


Services Term, may elect to limit one or more of the Services it is providing to the Business Manager upon not less than sixty (60) days’ prior written notice to the Business Manager, specifying the effective date such Services shall no longer be performed and describing in reasonable detail the Services to be terminated. As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.

3.5 If at any time during the Initial Services Term or any Additional Services Term the REIT has had a Change of Control, as hereinafter defined, Service Provider shall have the right to terminate this Agreement, without cause, upon written notice to Business Manager. At any time during the Initial Services Term or any Additional Services Term, and the REIT has not had a Change of Control, Service Provider shall have the right to terminate this Agreement, without cause, by providing not less than one hundred eighty (180) days’ prior written notice to the Business Manager, specifying the effective date of such termination. The foregoing notwithstanding, Service Provider, upon ten (10) days’ prior written notice to the Business Manager, may terminate this Agreement, or decline to provide a particular Service hereunder upon the occurrence of any of the following events:

(a) The Business Manager fails, in the absence of a bona fide dispute with respect to any payment, to make payment for Services on its due date; provided, however, the Business Manager may cure the breach up to three (3) times per calendar year by making payment within ten (10) days of the Business Manager’s receipt of written notice that it failed to make the payment when due;

(b) The Business Manager requests that Service Provider provide Services that in the Service Provider’s opinion would violate any applicable law or the rules of any regulatory body with jurisdiction and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid opinion;

(c) The Business Manager requests that Service Provider take any action that in the Service Provider’s opinion would result in the commission of a fraud upon any person or party and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid opinion;

(d) The Business Manager requests that Service Provider take any action that, upon the advice of counsel to Service Provider, could subject Service Provider to liability or material damages in civil litigation and the Business Manager does not promptly withdraw the request upon Service Provider s notice to the Business Manager of Service Provider’s aforesaid advice of counsel; or

(e) The Business Manager requests that Service Provider provide Services that upon advice of counsel to Service Provider would cause Service Provider or any of its employees to be in violation of its professional code of ethics or other ethical standards the Service Provider or any of its employees is subject to and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s counsel’s advice.

As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.

3.6 Upon any termination of this Agreement or cessation of Services arising under Sections 3.2 or 3.4 of this Agreement, during the Initial Services Term or any Additional Services Term, Service Provider shall provide the Business Manager with a reasonable opportunity to transition any terminated Services to any replacement provider(s) designated by the Business Manager (“Replacement Provider”), which period shall not be more than sixty (60) days from the date of termination of this Agreement or specified terminated Services (the “Transition Period”). During the Transition Period, Service Provider shall use reasonable efforts to avoid causing any unnecessary interruption of the terminated Services so as to



3


provide a smooth transition of such Services (the “Transition”). All services related to Transition shall be deemed Services and subject to the charges and fees set forth in Exhibit A attached hereto.

3.7 For the purposes hereof, the term “Change of Control” shall mean the occurrence of any one or more of the following:

(a)

Any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the REIT to any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended; provided, however, that any sale, lease, exchange or transfer to (including, without limitation, any merger or other business combination with or into) any of the following shall not constitute a Change of Control: (i) any affiliate controlled by the REIT, (ii) Inland Real Estate Corporation, (iii) Inland American Real Estate Trust, Inc., (iv) The Inland Group, Inc., or (v) any affiliate controlled by any of the entities listed in clauses (i) through (iv) above (all of the entities described in clauses (i) through (v) above are hereinafter sometimes referred to as the “Inland Companies”;

(b)

The approval by the holders of the outstanding shares of the REIT of any plan or proposal for the liquidation or dissolution of the REIT; or

(c)

Any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (other than any one or more of the Inland Companies) shall become the owner, directly or indirectly, beneficially or of record, of shares of the REIT representing more than twenty-five percent (25%) of the aggregate ordinary voting power represented by the issued and outstanding common shares of the REIT.

ARTICLE IV
INTERNAL CONTROL PROCEDURES

As a public entity, REIT is required to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as may be amended from time to time (“Section 404”). Notwithstanding anything to the contrary contained in this Agreement (including, without limitation, Article III and Section 8.4 hereof), if the Business Manager shall determine that, to provide services to and for the benefit of the Business Manager and REIT, Service Provider must comply with the requirements of Section 404, then the Business Manager and Service Provider shall develop and implement an internal control plan or other processes and procedures (or amend and revise any existing internal control plan, processes and procedures) to comply with the requirements (collectively, the “Internal Control Plan”). Once developed and implemented, Service Provider shall use its reasonable best efforts to have its internal controls comply in all respects with the requirements of Section 404. The cost and expense of development and initial implementation of any Internal Control Plan shall be borne by all clients of Service Provider that require Service Provider to comply with Section 404. Upon determination that an Internal Control Plan must be developed and implemented, Service Provider, the Business Manager and all other clients of Service Provider requiring Service Provider to comply with Section 404 shall, in good faith, negotiate an equitable allocation of the costs and expenses of the development and implementation of the Internal Control Plan between and among the parties. The foregoing provisions regarding payment and allocation of the costs and expenses of development and implementation of any Internal Control Plan shall not apply to any Internal Control Plan developed and implemented, or in the process of being developed and implemented, on or prior to the date of this Agreement.

ARTICLE V
PAYMENT

Service Provider shall invoice the Business Manager monthly (or any other basis as reasonably agreed to by the Business Manager) for any Services performed during the immediately preceding



4


calendar month (or any other period agreed to by the Business Manager). Payment shall be due thirty (30) days after the date of the Business Manager’s receipt of the same and shall be as provided in Section 2 of Exhibit A attached hereto. The compensation to be paid by the Business Manager under this Article V and Section 2 of Exhibit A attached hereto shall constitute full and complete payment for any and all services rendered and performed by Service Provider under and pursuant to this Agreement, which compensation includes any and all labor, costs and expenses incurred or to be incurred by Service Provider in connection with its performance of the Services.

ARTICLE VI
RIGHT TO AUDIT

Service Provider shall keep and make available for the examination and audit of or by the Business Manager, or the Business Manager’s authorized employees, agents or representatives during normal business hours, and upon reasonable prior notice, at the Business Manager’s cost, all data, materials and information, including but not limited to records of all receipts, costs and disbursements made by Service Provider with respect to the Services and all Operating Expenses (as defined in Exhibit A attached hereto), all books, accounts, memoranda, files and all or any other documents indicating, documenting, verifying or substantiating the cost and appropriateness of any and all costs, expenditures and receipts relating to the Services and/or Operating Expenses. Service Provider shall allow the Business Manager (and any of the Business Manager’s employees, representatives, accountants and auditors) reasonable access to personnel, representatives and employees of Service Provider and all books and records and other business records and files of Service Provider that are reasonably required by the Business Manager for audit and tax matters.

ARTICLE VII
CONFIDENTIALITY

7.1 During the term of this Agreement, the parties may communicate to each other certain confidential information to enable Service Provider to perform the services hereunder, and/or Service Provider may develop confidential information for the Business Manager. Each party agrees:

(a) to treat, and to cause its employees, agents, subcontractors and representatives, if any, to treat as secret and confidential, all confidential information; and

(b) except as necessary in the performance of the Services, not to disclose any confidential information or make available any reports, recommendations and/or conclusions which Service Provider may make for the Business Manager to any person, firm or corporation without first obtaining the Business Manager’s written approval.

7.2 If any party learns that disclosure of confidential information is sought in or by a court or governmental body of competent jurisdiction or through other means, the party shall:

(a) give prompt notice to the other party prior to making the disclosure and allow the other party, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, confidential information;

(b) reasonably cooperate with the other party in its efforts to prevent, or obtain a protective order for disclosure; and

(c) disclose the minimum amount of information required to be disclosed.



5


ARTICLE VIII
MISCELLANEOUS

8.1 Binding Effect. This Agreement shall be binding upon, and inure to the benefit of, the successors and assigns, if any, of each party hereto.

8.2 Governing Law; Jurisdiction . This Agreement shall be subject to and governed by the internal laws of the State of Illinois without regard to principles of choice of law. The parties hereto each agree that all disputes arising hereunder shall be tried in the federal and state courts located in Cook County or DuPage County, State of Illinois, and each party hereby agrees to submit to the exclusive jurisdiction of those courts.

8.3 Waiver . Either party’s failure to exercise any right under this Agreement shall neither constitute a waiver of any other terms or conditions of this Agreement with respect to any other or subsequent breach, nor a waiver by that party of its right at any time thereafter to require exact and strict compliance with the terms of this Agreement.

8.4 Independent Contractors . The parties acknowledge and agree that they are dealing with each other hereunder as independent contractors. Nothing contained in the Agreement shall be interpreted as constituting either party to be the joint venturer or partner of the other party or as conferring upon either party the power or authority to bind the other party in any transaction with third parties.

8.5 Equitable Relief and Monetary Damages . Each party hereto recognizes and acknowledges that a breach by the other party to this Agreement will cause irreparable damage to the non-breaching party that cannot be readily remedied in monetary damages in an action at law. In the event of any default or breach by either party, the non-breaching party shall be entitled to seek immediate injunctive relief to prevent irreparable harm, loss or dilution in addition to any other remedies available. Nothing herein shall limit a non-breaching party’s right to seek monetary damages with respect to a breach.

8.6 Entire Agreement . This Agreement, including the exhibits hereto, constitutes the entire agreement between the parties and contains all of the terms and conditions of the agreement between the parties with respect to the subject matter hereof. This Agreement supersedes any and all other agreements, whether oral or written, between the parties hereto, including any Affiliates of Service Provider, with respect to the subject matter hereof. No change or modification of this Agreement shall be valid unless the same shall be in writing and signed by the parties hereto.

8.7 Severability . If any provisions of this Agreement, or the application of any such provisions to parties hereto, shall be held by a court of competent jurisdiction to be unlawful or unenforceable, the remaining provisions of this Agreement shall nevertheless be valid, enforceable and shall remain in full force and effect, and shall not be affected, impaired or invalidated in any manner.

8.8 Headings . The headings in this Agreement are inserted for convenience only and are not to be considered in the interpretation or construction of the provisions hereof.

8.9 Notices . All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given or delivered:

(a) when delivered personally or by commercial messenger;

(b) one (1) business day following deposit with a recognized overnight courier service, provided the deposit occurs prior to the deadline imposed by the overnight courier service for overnight delivery; or

(c) when transmitted, if sent by facsimile copy, provided confirmation of receipt is received by sender and such notice is sent by an additional method provided hereunder;



6


in each case above provided the notice or other communication is addressed to the intended recipient thereof as set forth below:

 

If to Service Provider, to:

 

Inland Risk and Insurance Management Services, Inc.

 

 

2901 Butterfield Road

 

 

Oak Brook, IL 60523

 

 

Attention: Dolores H. Friedman

 

 

Facsimile: (630) 645-4383


If to the Business Manager, to:

 

Inland Western Retail Real Estate Advisory Services, Inc.

 

 

2901 Butterfield Road

 

 

Oak Brook, IL 60523

 

 

Attention: Roberta S. Matlin

 

 

Facsimile: (630) 218-4955

A party’s address for notice may be changed from time to time by notice given to the other parry in the manner herein provided for giving notice.

8.10 Further Assurance . Each party to this Agreement agrees to execute and deliver any and all documents, and to perform any and all further acts that may be reasonably necessary to carry out the provisions of this Agreement and the transactions contemplated hereby.

8.11 Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

8.12 Assignment . The Business Manager shall not assign this Agreement without the prior express written consent of the Service Provider; provided, however, if the REIT shall acquire or consolidate its business with the Business Manager, this Agreement shall be and be deemed assigned by the Business Manager to the REIT with the REIT assuming all of the obligations of Business Manager under the terms of this Agreement effective the date of such acquisition or consolidation. Service Provider shall not assign this Agreement without the prior express written consent of the Business Manager.

8.13 Furtherance of Prior Agreement. This Agreement is made in furtherance of that certain Services Agreement dated as of January 1, 2004 among the Business Manager, the Service Provider and others (“Prior Agreement”) to more fully set forth the duties and obligations of the parties hereto contemplated under the Prior Agreement. Accordingly, this Agreement shall supersede the Prior Agreement in all respects in connection agreements of the parties hereto made in this Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

THE BUSINESS MANAGER:

 

SERVICE PROVIDER:

 

 

 

INLAND WESTERN RETAIL REAL ESTATE
ADVISORY SERVICES, INC., an Illinois
corporation

 

INLAND RISK AND INSURANCE MANAGEMENT
SERVICES, INC., an Illinois corporation

By: 


/s/ Brenda Gail Gujral

 

By: 


/s/ Shoba Rajahally

Name: 

Brenda Gail Gujral

 

Name: 

Shoba Rajahally

Its: 

Vice President

 

Its: 

Vice President



7







8


EXHIBIT A

1. Services : The services to be provided under this Agreement shall be provided on an on-going, continuous basis unless otherwise requested by the Business Manager. Service Provider agrees to provide to the Business Manager insurance and risk management services, including, but not limited to, the following:

·

Assisting and providing ways to mitigate, minimize, control, and transfer risk through the prudent use of risk management, insurance programs and recommendations of safety and loss control techniques

·

Assisting management of the various entities in the identification, evaluation and control of risk

·

Selecting and managing of insurance brokers and service products

·

Preparing underwriting data for effective competitive marketing of insurance programs (Insurance Programs consist of, but are not limited to the following types: property/casualty, excess liability, contingent liability, umbrella, business interruption, boiler & machinery, flood, earthquake, environmental, terrorism, director & officer liability, worker’s compensation, health, life, disability, various types of bonds, employment practices liability, errors & omission)

·

Negotiating and placing insurance and related services

·

Serving as liaison for insurance broker and management for monitoring insurance premium invoices for accuracy

·

Managing and settling of loss control and insurance claims

·

Consulting and coordinating insurance requirements for financing of properties

·

Third party insurance consulting for real estate venture capital loans

·

Reviewing and monitoring insurance for various Inland held mortgages

·

Reviewing and monitoring sub-contractor certificates of insurance

·

Consulting regarding insurance verbiage requirements for leases and contracts

2. Compensation : Service Provider shall be paid for all services rendered under this Agreement as follows: the only compensation, costs, expenses and disbursements to be charged by Service Provider to the Business Manager for the Services provided hereunder shall be the Business Manager’s Pro Rate Share (hereinafter defined) of all Net Operating Costs (hereinafter defined). For the purposes hereof, the “Business Manager’s Pro Rata Share” shall be a fraction, the numerator of which shall be the aggregate dollar amount of any and all insurance premiums relating to insurance policies (including renewals) placed by Service Provider for the Business Manager during the applicable calendar year, and the denominator of which shall be the aggregate dollar amount of any and all insurance premiums relating to insurance policies (including renewals) placed by Service Provider for all of its clients (including the Business Manager) during the applicable calendar year. With each servicing invoice, Service Provider shall include an itemized list of all of Service Provider’s clients and the amount of insurance premiums, on an aggregate basis, relating to insurance policies (including renewals) placed by Service Provider for all of its clients (including the Business Manager) during the applicable calendar year. For the purposes hereof, the term “Net Operating Costs” shall mean the positive difference, if any, between:



A-9


(a) any and all actual, out-of-pocket costs and expenses incurred by Service Provider during the applicable calendar year in connection with the performance and rendering of services that are the same as or substantially similar to the Services to all of Service Provider’s clients (including the Business Manager), which costs and expenses may include, without limitation or duplication:

·

the salaries, employee benefits and bonuses of its employees;

·

copy costs;

·

administrative overhead;

·

rent for office space; and

·

costs of materials and supplies, minus:

(b) the actual amount of commissions payable to (or shared by) Service Provider with any third party brokers relating to any the insurance policies (including renewals).

Notwithstanding anything contained in this Agreement to the contrary, in no event shall the amount fees, charges, costs, expenses or other compensation charged by Service Provider to all of its clients (including the Business Manager) for any and all services (including the Services) provided by Service Provider exceed the actual Net Operating Costs incurred by Service Provider in providing the services. Service Provider represents that, to its knowledge, the rates and other charges payable by the Business Manager under this Agreement do not and shall not exceed the market rate for similar services provided to companies of size, nature and business similar to the Business Manager or REIT. If the Business Manager determines that any of the rates and/or other amounts charged by Service Provider under this Agreement shall exceed the market rate for similar services provided to companies of size, nature and business similar to the Business Manager or REIT, then the Business Manager and Service Provider shall negotiate in good faith to adjust the rates and other amounts to market.





A-10


EXHIBIT 10.534

EXECUTION COPY

AMENDMENT TO
INSURANCE AND RISK MANAGEMENT SERVICES AGREEMENT

This Amendment to that certain Insurance and Risk Management Services Agreement dated as of January 1, 2004 ("Services Agreement") made between INLAND RISK AND INSURANCE MANAGEMENT SERVICES, INC.("Service Provider"), an Illinois corporation, and  INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC. ("Business Manager"), an Illinois corporation, is made as of November 15, 2007 by the parties to the Services Agreement.

In consideration of the agreements to be made herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

1.

Section 2.2 of the Services Agreement is hereby deleted in its entirety and in lieu thereof the following is inserted:

"2.2  The Business Manager and Service Provider acknowledge that the Services to be provided by Service Provider hereunder are to be provided on a non-exclusive basis such that Business Manager shall be permitted to employ other parties to perform any one or more of the Services and that Service Provider shall be permitted to perform any one or more of the Services to other parties."

2.

Section 3.3 of the Services Agreement is hereby deleted in its entirety and in lieu thereof the following is inserted:

"3.3 At any time during the Initial Services Term or during an Additional Services Term, the Business Manager shall have the right to terminate this Agreement, without cause, by providing not less than one hundred eighty (180) days’ prior written notice to Service Provider of any election to terminate and specifying the effective date of such termination."

3.

Section 3.4 of the Services Agreement is hereby amended by deleting the words "sixty (60)" set forth therein and in lieu thereof inserting the words "thirty (30)".

4.

Section 3.5 of the Services Agreement is hereby amended by deleting the first sentence thereof in its entirety and in lieu thereof the following is inserted:

"If at any time during the Initial Services Term or any Additional Services Term the REIT has had a Change of Control, as hereinafter defined, Service Provider shall have the right to terminate this Agreement, without cause, upon not less than thirty (30) days prior written notice to Business Manager."

In all other respects the Services Agreement remains in full force and effect.



1



INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC.

By:

Its:  

        

INLAND RISK AND INSURANCE MANAGEMENT SERVICES, INC.

By:

Its:  

        


 


























[Signature Page to Amendment to Insurance and Risk Management Services Agreement]

Endnotes





2





EXHIBIT 10.535


LANDLORD’S  AGREEMENT



THIS LANDLORD’S AGREEMENT (this “ Agreement ”) is made and entered into this 15 th day of November, 2007 by and among INLAND 2905 & 2907 BUTTERFIELD ROAD, L.L.C. , a Delaware limited liability company (“ Landlord ”) and INLAND WESTERN RETAIL REAL ESTATE TRUST, INC. , a Maryland corporation (“ Subtenant ”).


R E C I T A L S


Landlord is the owner in fee of that certain real property located at 2905 and 2907 Butterfield Road, Oak Brook, Illinois (the “ Property ”). By lease agreement dated May 12, 2005 (the “ Prime Lease ”) by and between Landlord and Inland Real Estate Investment Corporation, a Delaware corporation (“ Tenant ”), Landlord leased the Property to Tenant, and Tenant leased the Property from Landlord.  


Tenant and Subtenant have entered into a sublease (the “ Sublease ”) on ______ ___, 2007 for that portion of the Property commonly known as Suites 120, 200 and 300 of the 2907  Butterfield Road Building and consisting of 36,740 rentable square feet (the “ Premises ”).  


Landlord and Subtenant desire, pursuant to the provisions set forth in this Agreement, to ensure that Subtenant retains possession of the Premises for the entire term of the Sublease pursuant to the terms of the Sublease.


NOW, THEREFORE, for good, lawful and valuable consideration, including the mutual undertakings of the parties hereto, the receipt and sufficiency of which are acknowledged by each of the parties hereto, it is covenanted and agreed as follows:


1.

Landlord’s Acknowledgment of the Sublease .  Landlord hereby acknowledges and agrees that Subtenant is a Permitted Transferee as defined in Section 20.1 of the Prime Lease and that the subletting of the Premises by Tenant to Subtenant is in compliance with the Prime Lease.  


2.

  Non-Disturbance .  Landlord shall not, in the exercise of any of the right arising or which may arise out of the Prime Lease or of any instrument modifying or amending the same or entered into in substitution or replacement thereof, disturb or deprive Subtenant in, or of, its possession or its right to possession of the Premises or of any right or privilege granted to or inuring to the benefit of Subtenant under the Sublease, provided the Sublease is then in full force and effect and Subtenant is not in default under the Sublease, and provided that any such right or privilege under the Sublease is no greater or different than any right or privilege provided to Tenant under the Prime Lease.


3.

Recognition and Attornment .  In the event of the termination of the Prime Lease by exercise of any remedy provided for therein, including re-entry, notice, surrender, summary proceedings or other action or proceeding or otherwise, or, in the event the Prime Lease shall terminate or expire for any reason before any of the dates provided in the Sublease for the termination of the initial or renewal terms of the Sublease, and if the Sublease shall, immediately prior to such surrender, termination or expiration, be in full force and effect and Subtenant shall not be in default under the Sublease, then, and in any of said events, Subtenant shall not be made a party in any action or proceeding to remove or evict the Tenant nor shall the Subtenant be evicted or removed or its possession or right of possession be disturbed or in anyway interfered with.  In such event: (a) the Sublease shall continue in full force and effect as a



1





direct lease from Landlord to Subtenant under the terms and provisions of the Sublease for the balance of the term thereof remaining, including any extensions therein provided; (b) Landlord shall continue to recognize the estate and rights of Subtenant created under the

Sublease; and (c) the terms of the Sublease, and Subtenant’s sub-leasehold estate in the Premises shall not then or thereafter be terminated, disturbed or adversely affected, except in accordance with the terms and provisions of the Sublease.  Subtenant shall and hereby agrees to attorn to Landlord under such circumstances.  


4.

Notice .  All notices which may or are required to be sent under this Agreement shall be in writing and shall be deemed to have been given (i) when hand delivered, (ii) if by nationally recognized overnight delivery service (which provides a receipt of delivery), postage prepaid, or the next business day following deposit of such notice with such carrier, or (iii) when sent by telecopier (with a copy by either the method described in clause (i) or (ii) of this paragraph, to the addresses first above set forth with required copies to the following:


Subtenant:

2907 Butterfield Road

Oak Brook, Illinois 60523

Attn:  Michael O. Hanlon


With a copy to:  Duane Morris LLP

227 West Monroe, Suite 3400

Chicago, Illinois 60606

Attn:  David Kaufman, Esq.


Landlord:

2901 Butterfield Road

Oak Brook, Illinois 60523

Attn:  Paul Wheeler


With a copy to:  Robert H. Baum

c/o The Inland Real Estate Group, Inc.

2901 Butterfield Road

Oak Brook, Illinois 60523


5.

Modifications .  No modification, amendment, waiver or release of any provision of this Agreement or of any right, obligation, claim or cause of action arising thereunder shall be valid or binding for any purpose whatsoever unless in writing and duly executed by the party against whom the same is sought to be asserted.


6.

Successors .  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors, assigns and sublessees and any subsequent owner of the Property.


IN WITNESS WHEREOF , the parties have executed this Agreement as of the date first above written.


LANDLORD:


INLAND 2905 & 2907 BUTTERFIELD ROAD, L.L.C. , a Delaware limited liability company


By:

Name:



2





Title:

        



SUBTENANT:


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a Maryland corporation


By:

Name:

Title: ________________________________



3



EXHIBIT 10.537


EXECUTION COPY


LICENSE AGREEMENT


This License Agreement (“Agreement”), by and between The Inland Real Estate Group, Inc., an Illinois corporation with its principal place of business at 2901 Butterfield Road, Oak Brook, Illinois 60523 (“Licensor”), and Inland Northwest Management Corp., a Delaware corporation, with its principal place of business at 2901 Butterfield Road, Oak Brook, Illinois 60523 (“Licensee”), is effective, nunc pro tunc , as of November 10, 2003 (the “Effective Date”), and executed as of November 15, 2007.


WITNESSETH:


WHEREAS, Licensor, through its business and that of its predecessor-in-interest, has adopted and used or caused to be used in United States commerce in connection with certain services in the field of real estate the trade name “Inland” which is registered in the United States Patent and Trademark Office (“USPTO”) as U.S. Registration No. 2,786,134 (the “Trade Name”); and


WHEREAS, Licensee desires to use the Trade Name in connection with the business it is engaged in, as more fully described below; and


WHEREAS, Licensor is willing to grant to Licensee a non-exclusive, non-transferable, revocable, royalty-free right to use the Trade Name subject to, and Licensee is willing to use the Trade Name in accordance with all of the terms and conditions set forth herein.


NOW, THEREFORE, in exchange for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in consideration of the mutual covenants set forth herein, the parties agree as follows:


I.

GRANT OF LICENSE


A.

Licensor grants to Licensee a non-exclusive, revocable, non-transferable, royalty-free right to use the Trade Name solely in connection with management services for Inland Western Retail Real Estate Trust, Inc. (the “Services”).  Use of the Trade Name by Licensee shall comply with the terms and conditions of this Agreement.


B.

Licensor hereby reserves any and all rights not expressly and explicitly granted in this Agreement, including, but not limited to, Licensor’s sole right to authorize or license use of the Trade Name or any other trademarks, designs, domain names, trade names, names or designations which are the same, similar to or incorporate the Trade Name, to any third party for any use whatsoever. Without limiting the rights reserved in the first sentence of this paragraph, Licensor hereby reserves any and all rights to use, authorize use or license use of the Trade Name or any other trademarks, designs, domain names, trade names, names or designations which are the same, similar to or incorporate the Trade Name in any geographic territory and in any language.


II.

OWNERSHIP OF THE TRADE NAME


A.

Licensee recognizes the great value of the goodwill associated with the Trade Name and (i) acknowledges that Licensor owns exclusive right, title and interest in and to the Trade




Page 1 of 11




Name, and any and all goodwill pertaining thereto (including, without limitation, any trademark applications and/or registrations therefor); (ii) agrees that it will do nothing inconsistent with such ownership including, but not limited to, directly or indirectly challenging the validity of, or otherwise impairing, any intellectual property rights of Licensor in and to the Trade Name, or Licensor’s ownership thereof, nor may it assist others in doing so, and (iii) agrees that all use of the Trade Name by Licensee shall inure solely to the benefit of Licensor.  Licensee agrees that nothing in this Agreement shall give Licensee any right, title or interest in the Trade Name other than the right to use the Trade Name in accordance with this Agreement.  Licensee agrees not to seek registration of the Trade Name, or any trademarks, designs, domain names, trade names, names or designations similar thereto or which are any abbreviation thereof, with any domestic or foreign governmental or quasi-governmental authority or as part of an Internet domain name. The provisions of this paragraph shall survive the expiration or termination of this Agreement.


B.

Licensor may file trademark applications to protect the Trade Name, but Licensor is not required to do so, nor is Licensor required to renew or maintain registrations for the Trade Name.  Licensee agrees to assist Licensor, at Licensor’s request, in the procurement and maintenance of any protection of Licensor’s rights in the Trade Name including, without limitation, in the prosecution of trademark applications for the Trade Name in Licensor’s name.


III.

USE OF THE TRADE NAME


A.

 In connection with its permitted use of the Trade Name, Licensee shall not in any manner represent that it has any ownership interest in the Trade Name, and Licensee specifically acknowledges that its permitted use of the Trade Name shall not create in the Licensee any right, title or interest in the Trade Name.


B.

Without detracting from the generality of the foregoing, it is agreed and understood by Licensee that Licensee does not have permission to:  1) sublicense the Trade Name, or 2) transfer, sell or assign any right granted by this Agreement, or 3) modify the Trade Name in any manner whatsoever.  Licensee further acknowledges and agrees that it does not have the right to use the Trade Name in connection with products and services other than as expressly permitted herein.


C.

Licensee acknowledges the importance to Licensor of its reputation and goodwill and to the public of maintaining high, uniform standards of quality in the services provided in connection with the Trade Name. Licensee therefore agrees to maintain a high standard of quality in connection with the Services and its use of the Trade Name in connection therewith commensurate with or better than the high standard maintained by Licensor in connection with its business prior to the effective date, and agrees to perform the Services so as not to impair Licensor’s reputation or goodwill in connection with the Trade Name. To ensure Licensor the ability to protect the goodwill associated with the Trade Name and the validity and integrity of the Trade Name, and to prevent any deception to the public, Licensee shall operate its business in accordance with the standards and requirements of quality, which from time to time are prescribed by Licensor, and shall use the Trade Name in a manner consistent with any format prescribed by Licensor for any and all media, including without limitation all signage, marketing materials, press releases and on the Internet.  If there are any modifications in the Standard Usage Guidelines, they will be delivered to Licensee in writing. Licensee agrees that such standards shall include but not be limited to strict compliance with all applicable statutes, laws, ordinances, rules, regulations and orders of public authorities in effect from time to time and that such laws shall include but not be limited to fair housing laws, antitrust laws, licensing laws, environmental laws, securities laws and consumer laws. Licensee further agrees that such standards shall include the obligation to conduct its business in accordance with the highest ethical standards applicable in its industry. In the event of any




Page 2 of 11




failure by Licensee to operate its business in accordance with the standards and requirements set forth herein or as prescribed by Licensor from time to time, or in the event that Licensee engages in any conduct or failure to act that in the sole judgment of  Licensor adversely impacts on the name, reputation, goodwill or business of Licensor, such conduct or failure to act shall constitute a material breach of this Agreement.  If such material breach has not been cured within thirty (30) days following receipt of notice from Licensor, this Agreement shall be terminated.


D.

To determine whether Licensee is complying with this Agreement, Licensor shall have the right to periodically monitor Licensee’s use of the Trade Name.  Upon request by Licensor, Licensee shall provide Licensor with representative samples of each such use prior to the time the Trade Name is published, including but not limited to the use on all signage, marketing materials, press releases and on the Internet.   If Licensor determines that Licensee is using the Trade Name improperly, and/or in a way that does not meet the standards referred to in Article III. C. above, or requirements set forth herein and/or to which Licensor may require adherence to from time to time, Licensor shall notify Licensee, and Licensee shall remedy the improper use within thirty (30) days following receipt of such notice from Licensor. In addition, if Licensor determines that Licensee is engaging in conduct or activities that dilute or damage the value of the goodwill associated with the Trade Name, in each case, Licensor shall provide notice of the conduct or activities to Licensee, and Licensee shall immediately cease the conduct or activities and shall take all actions requested by Licensor to mitigate or remedy any dilution or damage. Use of the Trade Name  in connection with an infringement of any of Licensor’s or a third party’s rights, including but not limited to rights under trademark, patent, trade secret or copyright laws, shall constitute a material breach of this Agreement. If such material breach has not been cured within thirty (30) days following receipt of notice from Licensor, this Agreement shall be terminated.


E.

Licensee shall ensure that trademark, service mark, and any and all other proprietary rights notices that are appropriate to protect the Trade Name is conspicuously placed on all items bearing the Trade Name used by Licensee in accordance with the Standard Usage Guidelines.  In the event that Licensee learns of or has reason to believe that a third party is infringing or threatens to infringe the Trade Name (the “Infringement”), it shall immediately notify Licensor, and Licensor may take such steps as it believes appropriate (in its sole discretion) to terminate or otherwise address the Infringement.  Licensee agrees to cooperate with Licensor and to provide  support to Licensor in such efforts.  If Licensee chooses to appoint counsel on its own, it shall be at Licensee’s sole expense. Licensee shall not take any action to prosecute or settle any such Infringement without Licensor’s written consent.


IV.

LEGEND; DISCLAIMER


Upon Licensor’s request, Licensee shall include 1) a trademark legend satisfactory to Licensor in accordance with the Standard Usage Guidelines indicating that the Trade Name is owned by Licensor and are being used under license and/or 2) a disclaimer that Licensee and not Licensor has produced the materials and is responsible for the content thereof whenever the Trade Name may be used, including but not limited to on signage, marketing materials, letterhead, business cards, flags, checks, documents, promotional items,  press releases or on the Internet. Further, Licensee agrees to display a trademark registration symbol (i.e., “®”) immediately after the Trade Name at least once in any piece of printed or visual material in which they appear (and generally  in its first appearance in such material), normally along side the Trade Name.  If the Trade Name appears in any printed or visual material (other than letterhead, envelopes, or business cards) in which another trademark, design, domain name, trade name, name or designation not belonging to Licensor also appears, the words “A registered mark of The Inland Real Estate Group, Inc.” (or such other legend as may be designated by Licensor) shall appear along with the registration symbol next to the Trade Name.





Page 3 of 11




V.

TERMS AND TERMINATION


A.

The initial term (the “Initial Term”) of this Agreement shall commence as of the Effective Date and, unless terminated earlier as provided  below, automatically shall expire and terminate on the fifth anniversary of the Effective Date (as may be renewed and extended as hereinafter provided, the “Expiration Date”). Notwithstanding the foregoing, the term of this Agreement automatically shall be renewed and extended for consecutive five year periods after the initial Expiration Date (each of which periods (a) shall commence as of the day immediately succeeding the then scheduled Expiration Date, and (b) hereinafter shall be referred to herein as a “Renewal Term”), unless either party hereto elects not to renew and extend the term of this Agreement by delivering notice of such election to the other on or before the ninetieth (90 th ) day preceding the then scheduled expiration of the Initial Term or applicable Renewal Term, as the case may be.


B.

Notwithstanding Subparagraph A hereof, Licensor may terminate this Agreement at its sole discretion with or without cause upon thirty (30) days prior written notice, and Licensee may terminate this Agreement at its sole discretion with or without cause upon thirty (30)  days prior written notice.


C.

Notwithstanding Subparagraphs A and B above, if Licensee makes any assignment of assets or business for the benefit of creditors, if a trustee or receiver is appointed to administer or conduct Licensee's business or affairs, if Licensee is adjudged in any legal proceeding to be either a voluntary or involuntary bankrupt, if Licensee fails to comply with any provision of this Agreement, or if Licensee changes its name in whole or in part, Licensor may terminate this Agreement immediately without notice.


D.

Upon the termination or expiration of this Agreement, the License granted hereunder shall immediately and automatically terminate, and Licensee agrees to immediately discontinue any and all use of the Trade Name and to deliver up to Licensor, or its duly authorized representatives, all signage, marketing materials, letterhead, business cards, flags, checks, documents promotional items, press releases, Internet usage and any and all other papers or materials upon which the Trade Name appears, and furthermore will at no time adopt or use, without Licensor's prior written consent, any word, phrase, colors, symbol, logos, marks or other designations which are similar to or likely to be confusing with the Trade Name.


VI.

OBLIGATIONS ON TERMINATION


Any termination of this Agreement shall not impair any other accrued rights or remedies of either Licensor or Licensee.  Upon termination of this Agreement, Licensee shall immediately cease and desist from using the Trade Name, in accordance with the terms set forth herein. Licensee acknowledges and agrees that no indemnities or compensation of any kind shall be due to Licensee as a result of the termination or expiration of this Agreement.  In particular, Licensee waives any claim it may have or acquire against Licensor for any expenses incurred by it in preparing for and operating under this Agreement including, but not limited to, the engagement of any employees or contractors, the rental, purchase, furnishing or remodeling of any facilities and/or the rental, purchase or other acquisition of equipment. Nothing herein shall be construed to relieve Licensee of any obligations with respect to activities undertaken in connection with Licensee’s operation and performance under this Agreement prior to the date of such expiration or termination including, but not limited to, Licensee’s defense and indemnity obligations, and such obligations shall survive any such termination or expiration.  Notwithstanding the above, the provisions of Articles  IB, II, IV, V, VI, VII, VIII, IX, X, XI, XII, XIII, XIV, XVI, and XX shall survive any termination of this Agreement.




Page 4 of 11





VII.

REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSEE


Licensee has requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The execution and delivery by Licensee of this Agreement has been duly authorized by all necessary corporate actions on the part of the Licensee.  This Agreement has been duly and validly executed and delivered by Licensee and, assuming the due authorization, execution and delivery hereof by Licensor, constitutes or will constitute, as applicable, a legal, valid and binding obligation of Licensee, enforceable against Licensee in accordance with its terms, except as enforcement may be limited by:  


(a)

bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally; and


(b)

general equitable principles.


Licensee represents and warrants to Licensor that the licenses granted by this Agreement do not and shall not result in a breach of or constitute a default or violation under any agreement to which Licensee is subject or by which Licensee is bound.  


Licensee shall immediately notify Licensor if Licensee becomes aware of any event, circumstance, transaction or occurrence that would make any of the representations or warranties of Licensee contained in this Agreement not true in any respect.  


Licensee shall immediately deliver to Licensor any and all written notices and/or written communications delivered to or received from:


(a)

any person or entity challenging or questioning the validity, ownership, use, enforceability, registerability or licensing of the Trade Name;


(b)

any person or entity challenging or questioning the validity of this Agreement or the licenses and rights granted under and pursuant to this Agreement; or


(c)

any governmental authority in regards to the validity, ownership, use, enforceability, registerability and/or licensing of the Trade Name.  


Licensee shall not take any actions that would reasonably be expected to affect the registered status or ownership, or create confusion regarding the ownership, of the Trade Name by Licensor.  


Licensee shall use its best efforts, and shall cooperate with Licensor, to correct any market confusion related to the use of the Trade Name and any other marks licensed by Licensor to other Affiliates of Licensor.


VIII.

REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSOR


Licensor has the requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The execution and delivery by Licensor of this Agreement has been duly authorized by all necessary corporate actions on the part of the Licensor.  This Agreement has been duly and validly executed and delivered by Licensor and, assuming the due authorization, execution




Page 5 of 11




and delivery hereof by Licensee, constitutes or will constitute, as applicable, a legal, valid and binding obligation of Licensor, enforceable against Licensor in accordance with its terms, except as enforcement may be limited by:


(a)

bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally; and


(b)

general equitable principles.


Except as set forth above, Licensor makes no representations or warranties, either express or implied, arising by law or otherwise including, but not limited to, implied warranties of non-infringement of third-party rights by the Trade Name or fitness for a particular purpose.  In no event will Licensor have any obligation or liability resulting from tort, or loss of revenue or profit, or for incidental or consequential damages.


IX.

CONFIDENTIAL INFORMATION AND DISCLOSURE


Unless required by law, and except to assert its rights hereunder or for disclosure to its own employees, attorneys, financial advisors on a “need to know” basis, both parties agree not to disclose the terms of this Agreement or matters relating thereto without the prior written consent of the other party which consent shall not be unreasonably withheld.


X.

INDEMNIFICATION


Licensee agrees to indemnify, defend and hold Licensor and its officers, directors, employees and agents, its parent, affiliates, partially or wholly-owned subsidiaries, successors and assigns harmless from and against any and all liability, losses, damages, claims, liens, expenses or causes of action, including, but not limited to, legal fees and expenses that may be incurred by Licensor, arising directly or indirectly out of or in connection with Licensee’s use of the Trade Name or any act or omission to act by Licensee relating to this Agreement, including but not limited to Licensee’s use of the Trade Name and/or content on Licensee’s website(s) linked to, presented in conjunction with or relating to the Trade Name.  Licensor shall provide Licensee with prompt written notice of any claim for which indemnification is sought and shall have the right to participate in the defense of any such claim.


XI.

BINDING EFFECT


This Agreement shall be binding upon, and inure to the benefit of, the successors and assigns, if any, of each party hereto.


XII.

GOVERNING LAW; JURISDICTION


This Agreement shall be subject to and governed by the internal laws of the State of Illinois and the United States of America, including, but not limited to, the Lanham Act (15 U.S.C. §1051 et seq.), without regard to principles of choice of law.  The Parties each agree that all disputes arising hereunder shall be tried in the federal and state courts located in Cook County, State of Illinois, and each party hereby agrees to submit to the exclusive jurisdiction of such courts.


XIII.

COSTS AND ATTORNEYS’ FEES





Page 6 of 11




As consideration for Licensor granting the license to Licensee, in the event of any litigation or arbitration between the parties hereto with respect to this Agreement, Licensor shall be entitled to payment by Licensee of all its attorneys’ fees and other costs and expenses incurred in resolving such dispute in addition to such other relief to which Licensor may be entitled in law or equity.


XIV.

WAIVER


Either party’s failure to exercise any right under this Agreement shall not constitute a waiver of any other terms or conditions of this Agreement with respect to any other or subsequent breach, nor a waiver by such party of its right at any time thereafter to require exact and strict compliance with the terms of this Agreement.


XV.

INDEPENDENT CONTRACTORS


The parties acknowledge and agree that they are dealing with each other hereunder as independent contractors. Nothing contained in the Agreement shall be interpreted as constituting either party the joint venturer or partner of the other party or as conferring upon either party the power or authority to bind the other party in any transaction with third parties.


XVI.

EQUITABLE RELIEF


Licensee recognizes and acknowledges that a breach by Licensee of this Agreement will cause Licensor irreparable damage which cannot be readily remedied in monetary damages in an action at law, and may, in addition thereto, constitute an infringement of the Trade Name.  In the event of any default or breach by Licensee, Licensor shall be entitled to immediate injunctive relief to prevent such irreparable harm, loss or dilution in addition to any other remedies available. Nothing herein shall limit Licensor’s right to seek monetary damages with respect to a breach.


XVII.

ENTIRE AGREEMENT


This Agreement, including the exhibits and attachments hereto, each of which are hereto incorporated by reference herein, constitutes the entire agreement between the parties and contains all of the terms and conditions of the agreement between the parties with respect to the subject matter hereof.  This Agreement supersedes any and all other agreements, whether oral or written, between the parties hereto with respect to the subject matter hereof.  No change or modification of this Agreement shall be valid unless the same shall be in writing and signed by the parties hereto.


XVIII.

  SEVERABILITY


If any provisions of this Agreement, or the application of any such provisions to parties hereto, shall be held by a court of competent jurisdiction to be unlawful or unenforceable, the remaining provisions of this Agreement shall nevertheless be valid, enforceable and shall remain in full force and effect, and shall not be affected, impaired or invalidated in any manner.


XIX.

HEADINGS


The headings in this Agreement are inserted for convenience only and are not to be considered in the interpretation or construction of the provisions hereof.


XX.

NOTICES




Page 7 of 11





All notices, requests or demands to be given under this Agreement from one party to the other  (collectively, “Notices”) shall be in writing and shall be given by personal delivery or by overnight courier service for next Business Day delivery (or Saturday delivery, if desired) at the other party’s address set forth below.  Notices given by personal delivery (i.e. by the sending party or a messenger) shall be deemed given on the date of delivery and Notices given by overnight courier shall be deemed given upon deposit with the overnight courier service. If any party’s address is a business, receipt by a receptionist, or by any person in the employ of such party, shall be deemed actual receipt by the party of Notices. The term, Business Day, means any day other than Saturday, Sunday or any other day on which state banks are required or are authorized to be closed in Chicago, Illinois.    Notices may be issued by an attorney for a party and in such case  such Notices shall be deemed given by such party. The parties’ addresses are as follows:


LICENSOR:

LICENSEE:

The Inland Real Estate Group, Inc.

Inland Northwest Management Corp.

2901 Butterfield Road

2901 Butterfield Road

Oak Brook, Illinois 60523

Oak Brook, Illinois 60523

Attn: Robert H. Baum, General Counsel

Attn:  Thomas P. McGuinness, President


A party’s addresses for notice may be changed from time to time by notice given to the other party in the manner herein provided for giving notice.


XXI.

FURTHER ASSURANCE


Each party to this Agreement agrees to execute and deliver any and all documents, and to perform any and all further acts, that may be reasonably necessary to carry out the provisions of this Agreement and the transactions contemplated hereby.


XXII.

COUNTERPARTS


This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.


XXIII.

  SURVIVAL


The provisions of Articles IB, II, IV, V, VI, VII, VIII, IX, X, XI, XII, XIII, XIV, XVI, and XX will survive any termination of this Agreement.


XXIV.

ASSIGNMENT


Licensor may, in its sole discretion, assign this Agreement to another person or entity. Licensee shall be entitled to assign this Agreement to another person or entity only upon the prior written consent of Licensor, which consent may be withheld in Licensor’s sole discretion.






Page 8 of 11




WHEREAS, the parties have caused this Agreement to be duly executed as of the date set forth above.



THE INLAND REAL ESTATE GROUP, INC., an Illinois corporation



By: ________________________________

Name: _____________________________

Title: ______________________________


INLAND NORTHWEST MANAGEMENT CORP., a Delaware corporation



By: ________________________________

Name: ______________________________

Title: ______________________________































[Signature Page to License Agreement]




Page 9 of 11




EXHIBIT 99.15


EXECUTION COPY


LICENSE AGREEMENT


This License Agreement (“Agreement”), by and between The Inland Real Estate Group, Inc., an Illinois corporation with its principal place of business at 2901 Butterfield Road, Oak Brook, Illinois 60523 (“Licensor”), and Inland Southwest Management Corp., a Delaware corporation, with its principal place of business at 2901 Butterfield Road, Oak Brook, Illinois 60523 (“Licensee”), is effective, nunc pro tunc , as of November 10, 2003 (the “Effective Date”), and executed as of November 15, 2007.


WITNESSETH:


WHEREAS, Licensor, through its business and that of its predecessor-in-interest, has adopted and used or caused to be used in United States commerce in connection with certain services in the field of real estate the trade name “Inland” which is registered in the United States Patent and Trademark Office (“USPTO”) as U.S. Registration No. 2,786,134 (the “Trade Name”); and


WHEREAS, Licensee desires to use the Trade Name in connection with the business it is engaged in, as more fully described below; and


WHEREAS, Licensor is willing to grant to Licensee a non-exclusive, non-transferable, revocable, royalty-free right to use the Trade Name subject to, and Licensee is willing to use the Trade Name in accordance with all of the terms and conditions set forth herein.


NOW, THEREFORE, in exchange for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in consideration of the mutual covenants set forth herein, the parties agree as follows:


I.

GRANT OF LICENSE


A.

Licensor grants to Licensee a non-exclusive, revocable, non-transferable, royalty-free right to use the Trade Name solely in connection with management services for Inland Western Retail Real Estate Trust, Inc. (the “Services”).  Use of the Trade Name by Licensee shall comply with the terms and conditions of this Agreement.


B.

Licensor hereby reserves any and all rights not expressly and explicitly granted in this Agreement, including, but not limited to, Licensor’s sole right to authorize or license use of the Trade Name or any other trademarks, designs, domain names, trade names, names or designations which are the same, similar to or incorporate the Trade Name, to any third party for any use whatsoever. Without limiting the rights reserved in the first sentence of this paragraph, Licensor hereby reserves any and all rights to use, authorize use or license use of the




Page 1 of 11




Trade Name or any other trademarks, designs, domain names, trade names, names or designations which are the same, similar to or incorporate the Trade Name in any geographic territory and in any language.


II.

OWNERSHIP OF THE TRADE NAME


A.

Licensee recognizes the great value of the goodwill associated with the Trade Name and (i) acknowledges that Licensor owns exclusive right, title and interest in and to the Trade Name, and any and all goodwill pertaining thereto (including, without limitation, any trademark applications and/or registrations therefor); (ii) agrees that it will do nothing inconsistent with such ownership including, but not limited to, directly or indirectly challenging the validity of, or otherwise impairing, any intellectual property rights of Licensor in and to the Trade Name, or Licensor’s ownership thereof, nor may it assist others in doing so, and (iii) agrees that all use of the Trade Name by Licensee shall inure solely to the benefit of Licensor.  Licensee agrees that nothing in this Agreement shall give Licensee any right, title or interest in the Trade Name other than the right to use the Trade Name in accordance with this Agreement.  Licensee agrees not to seek registration of the Trade Name, or any trademarks, designs, domain names, trade names, names or designations similar thereto or which are any abbreviation thereof, with any domestic or foreign governmental or quasi-governmental authority or as part of an Internet domain name. The provisions of this paragraph shall survive the expiration or termination of this Agreement.


B.

Licensor may file trademark applications to protect the Trade Name, but Licensor is not required to do so, nor is Licensor required to renew or maintain registrations for the Trade Name.  Licensee agrees to assist Licensor, at Licensor’s request, in the procurement and maintenance of any protection of Licensor’s rights in the Trade Name including, without limitation, in the prosecution of trademark applications for the Trade Name in Licensor’s name.


III.

USE OF THE TRADE NAME


A.

 In connection with its permitted use of the Trade Name, Licensee shall not in any manner represent that it has any ownership interest in the Trade Name, and Licensee specifically acknowledges that its permitted use of the Trade Name shall not create in the Licensee any right, title or interest in the Trade Name.


B.

Without detracting from the generality of the foregoing, it is agreed and understood by Licensee that Licensee does not have permission to:  1) sublicense the Trade Name, or 2) transfer, sell or assign any right granted by this Agreement, or 3) modify the Trade Name in any manner whatsoever.  Licensee further acknowledges and agrees that it does not have the right to use the Trade Name in connection with products and services other than as expressly permitted herein.


C.

Licensee acknowledges the importance to Licensor of its reputation and goodwill and to the public of maintaining high, uniform standards of quality in the services provided in connection with the Trade Name. Licensee therefore agrees to maintain a high




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standard of quality in connection with the Services and its use of the Trade Name in connection therewith commensurate with or better than the high standard maintained by Licensor in connection with its business prior to the effective date, and agrees to perform the Services so as not to impair Licensor’s reputation or goodwill in connection with the Trade Name. To ensure Licensor the ability to protect the goodwill associated with the Trade Name and the validity and integrity of the Trade Name, and to prevent any deception to the public, Licensee shall operate its business in accordance with the standards and requirements of quality, which from time to time are prescribed by Licensor, and shall use the Trade Name in a manner consistent with any format prescribed by Licensor for any and all media, including without limitation all signage, marketing materials, press releases and on the Internet.  If there are any modifications in the Standard Usage Guidelines, they will be delivered to Licensee in writing. Licensee agrees that such standards shall include but not be limited to strict compliance with all applicable statutes, laws, ordinances, rules, regulations and orders of public authorities in effect from time to time and that such laws shall include but not be limited to fair housing laws, antitrust laws, licensing laws, environmental laws, securities laws and consumer laws. Licensee further agrees that such standards shall include the obligation to conduct its business in accordance with the highest ethical standards applicable in its industry. In the event of any failure by Licensee to operate its business in accordance with the standards and requirements set forth herein or as prescribed by Licensor from time to time, or in the event that Licensee engages in any conduct or failure to act that in the sole judgment of  Licensor adversely impacts on the name, reputation, goodwill or business of Licensor, such conduct or failure to act shall constitute a material breach of this Agreement.  If such material breach has not been cured within thirty (30) days following receipt of notice from Licensor, this Agreement shall be terminated.


D.

To determine whether Licensee is complying with this Agreement, Licensor shall have the right to periodically monitor Licensee’s use of the Trade Name.  Upon request by Licensor, Licensee shall provide Licensor with representative samples of each such use prior to the time the Trade Name is published, including but not limited to the use on all signage, marketing materials, press releases and on the Internet.   If Licensor determines that Licensee is using the Trade Name improperly, and/or in a way that does not meet the standards referred to in Article III. C. above, or requirements set forth herein and/or to which Licensor may require adherence to from time to time, Licensor shall notify Licensee, and Licensee shall remedy the improper use within thirty (30) days following receipt of such notice from Licensor. In addition, if Licensor determines that Licensee is engaging in conduct or activities that dilute or damage the value of the goodwill associated with the Trade Name, in each case, Licensor shall provide notice of the conduct or activities to Licensee, and Licensee shall immediately cease the conduct or activities and shall take all actions requested by Licensor to mitigate or remedy any dilution or damage. Use of the Trade Name  in connection with an infringement of any of Licensor’s or a third party’s rights, including but not limited to rights under trademark, patent, trade secret or copyright laws, shall constitute a material breach of this Agreement. If such material breach has not been cured within thirty (30) days following receipt of notice from Licensor, this Agreement shall be terminated.


E.

Licensee shall ensure that trademark, service mark, and any and all other proprietary rights notices that are appropriate to protect the Trade Name is conspicuously placed




Page 3 of 11




on all items bearing the Trade Name used by Licensee in accordance with the Standard Usage Guidelines.  In the event that Licensee learns of or has reason to believe that a third party is infringing or threatens to infringe the Trade Name (the “Infringement”), it shall immediately notify Licensor, and Licensor may take such steps as it believes appropriate (in its sole discretion) to terminate or otherwise address the Infringement.  Licensee agrees to cooperate with Licensor and to provide  support to Licensor in such efforts.  If Licensee chooses to appoint counsel on its own, it shall be at Licensee’s sole expense. Licensee shall not take any action to prosecute or settle any such Infringement without Licensor’s written consent.


IV.

LEGEND; DISCLAIMER


Upon Licensor’s request, Licensee shall include 1) a trademark legend satisfactory to Licensor in accordance with the Standard Usage Guidelines indicating that the Trade Name is owned by Licensor and are being used under license and/or 2) a disclaimer that Licensee and not Licensor has produced the materials and is responsible for the content thereof whenever the Trade Name may be used, including but not limited to on signage, marketing materials, letterhead, business cards, flags, checks, documents, promotional items,  press releases or on the Internet. Further, Licensee agrees to display a trademark registration symbol (i.e., “®”) immediately after the Trade Name at least once in any piece of printed or visual material in which they appear (and generally  in its first appearance in such material), normally along side the Trade Name.  If the Trade Name appears in any printed or visual material (other than letterhead, envelopes, or business cards) in which another trademark, design, domain name, trade name, name or designation not belonging to Licensor also appears, the words “A registered mark of The Inland Real Estate Group, Inc.” (or such other legend as may be designated by Licensor) shall appear along with the registration symbol next to the Trade Name.


V.

TERMS AND TERMINATION


A.

The initial term (the “Initial Term”) of this Agreement shall commence as of the Effective Date and, unless terminated earlier as provided  below, automatically shall expire and terminate on the fifth anniversary of the Effective Date (as may be renewed and extended as hereinafter provided, the “Expiration Date”). Notwithstanding the foregoing, the term of this Agreement automatically shall be renewed and extended for consecutive five year periods after the initial Expiration Date (each of which periods (a) shall commence as of the day immediately succeeding the then scheduled Expiration Date, and (b) hereinafter shall be referred to herein as a “Renewal Term”), unless either party hereto elects not to renew and extend the term of this Agreement by delivering notice of such election to the other on or before the ninetieth (90 th ) day preceding the then scheduled expiration of the Initial Term or applicable Renewal Term, as the case may be.


B.

Notwithstanding Subparagraph A hereof, Licensor may terminate this Agreement at its sole discretion with or without cause upon thirty (30) days prior written notice, and Licensee may terminate this Agreement at its sole discretion with or without cause upon thirty (30)  days prior written notice.





Page 4 of 11




C.

Notwithstanding Subparagraphs A and B above, if Licensee makes any assignment of assets or business for the benefit of creditors, if a trustee or receiver is appointed to administer or conduct Licensee's business or affairs, if Licensee is adjudged in any legal proceeding to be either a voluntary or involuntary bankrupt, if Licensee fails to comply with any provision of this Agreement, or if Licensee changes its name in whole or in part, Licensor may terminate this Agreement immediately without notice.


D.

Upon the termination or expiration of this Agreement, the License granted hereunder shall immediately and automatically terminate, and Licensee agrees to immediately discontinue any and all use of the Trade Name and to deliver up to Licensor, or its duly authorized representatives, all signage, marketing materials, letterhead, business cards, flags, checks, documents promotional items, press releases, Internet usage and any and all other papers or materials upon which the Trade Name appears, and furthermore will at no time adopt or use, without Licensor's prior written consent, any word, phrase, colors, symbol, logos, marks or other designations which are similar to or likely to be confusing with the Trade Name.


VI.

OBLIGATIONS ON TERMINATION


Any termination of this Agreement shall not impair any other accrued rights or remedies of either Licensor or Licensee.  Upon termination of this Agreement, Licensee shall immediately cease and desist from using the Trade Name, in accordance with the terms set forth herein. Licensee acknowledges and agrees that no indemnities or compensation of any kind shall be due to Licensee as a result of the termination or expiration of this Agreement.  In particular, Licensee waives any claim it may have or acquire against Licensor for any expenses incurred by it in preparing for and operating under this Agreement including, but not limited to, the engagement of any employees or contractors, the rental, purchase, furnishing or remodeling of any facilities and/or the rental, purchase or other acquisition of equipment. Nothing herein shall be construed to relieve Licensee of any obligations with respect to activities undertaken in connection with Licensee’s operation and performance under this Agreement prior to the date of such expiration or termination including, but not limited to, Licensee’s defense and indemnity obligations, and such obligations shall survive any such termination or expiration.  Notwithstanding the above, the provisions of Articles  IB, II, IV, V, VI, VII, VIII, IX, X, XI, XII, XIII, XIV, XVI, and XX shall survive any termination of this Agreement.


VII.

REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSEE


Licensee has requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The execution and delivery by Licensee of this Agreement has been duly authorized by all necessary corporate actions on the part of the Licensee.  This Agreement has been duly and validly executed and delivered by Licensee and, assuming the due authorization, execution and delivery hereof by Licensor, constitutes or will constitute, as applicable, a legal, valid and binding obligation of Licensee, enforceable against Licensee in accordance with its terms, except as enforcement may be limited by:  





Page 5 of 11




(a)

bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally; and


(b)

general equitable principles.


Licensee represents and warrants to Licensor that the licenses granted by this Agreement do not and shall not result in a breach of or constitute a default or violation under any agreement to which Licensee is subject or by which Licensee is bound.  


Licensee shall immediately notify Licensor if Licensee becomes aware of any event, circumstance, transaction or occurrence that would make any of the representations or warranties of Licensee contained in this Agreement not true in any respect.  


Licensee shall immediately deliver to Licensor any and all written notices and/or written communications delivered to or received from:


(a)

any person or entity challenging or questioning the validity, ownership, use, enforceability, registerability or licensing of the Trade Name;


(b)

any person or entity challenging or questioning the validity of this Agreement or the licenses and rights granted under and pursuant to this Agreement; or


(c)

any governmental authority in regards to the validity, ownership, use, enforceability, registerability and/or licensing of the Trade Name.  


Licensee shall not take any actions that would reasonably be expected to affect the registered status or ownership, or create confusion regarding the ownership, of the Trade Name by Licensor.  


Licensee shall use its best efforts, and shall cooperate with Licensor, to correct any market confusion related to the use of the Trade Name and any other marks licensed by Licensor to other Affiliates of Licensor.


VIII.

REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSOR


Licensor has the requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The execution and delivery by Licensor of this Agreement has been duly authorized by all necessary corporate actions on the part of the Licensor.  This Agreement has been duly and validly executed and delivered by Licensor and, assuming the due authorization, execution and delivery hereof by Licensee, constitutes or will constitute, as applicable, a legal, valid and binding obligation of Licensor, enforceable against Licensor in accordance with its terms, except as enforcement may be limited by:





Page 6 of 11




(a)

bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally; and


(b)

general equitable principles.


Except as set forth above, Licensor makes no representations or warranties, either express or implied, arising by law or otherwise including, but not limited to, implied warranties of non-infringement of third-party rights by the Trade Name or fitness for a particular purpose.  In no event will Licensor have any obligation or liability resulting from tort, or loss of revenue or profit, or for incidental or consequential damages.


IX.

CONFIDENTIAL INFORMATION AND DISCLOSURE


Unless required by law, and except to assert its rights hereunder or for disclosure to its own employees, attorneys, financial advisors on a “need to know” basis, both parties agree not to disclose the terms of this Agreement or matters relating thereto without the prior written consent of the other party which consent shall not be unreasonably withheld.


X.

INDEMNIFICATION


Licensee agrees to indemnify, defend and hold Licensor and its officers, directors, employees and agents, its parent, affiliates, partially or wholly-owned subsidiaries, successors and assigns harmless from and against any and all liability, losses, damages, claims, liens, expenses or causes of action, including, but not limited to, legal fees and expenses that may be incurred by Licensor, arising directly or indirectly out of or in connection with Licensee’s use of the Trade Name or any act or omission to act by Licensee relating to this Agreement, including but not limited to Licensee’s use of the Trade Name and/or content on Licensee’s website(s) linked to, presented in conjunction with or relating to the Trade Name.  Licensor shall provide Licensee with prompt written notice of any claim for which indemnification is sought and shall have the right to participate in the defense of any such claim.


XI.

BINDING EFFECT


This Agreement shall be binding upon, and inure to the benefit of, the successors and assigns, if any, of each party hereto.


XII.

GOVERNING LAW; JURISDICTION


This Agreement shall be subject to and governed by the internal laws of the State of Illinois and the United States of America, including, but not limited to, the Lanham Act (15 U.S.C. §1051 et seq.), without regard to principles of choice of law.  The Parties each agree that all disputes arising hereunder shall be tried in the federal and state courts located in Cook County, State of Illinois, and each party hereby agrees to submit to the exclusive jurisdiction of such courts.





Page 7 of 11




XIII.

COSTS AND ATTORNEYS’ FEES


As consideration for Licensor granting the license to Licensee, in the event of any litigation or arbitration between the parties hereto with respect to this Agreement, Licensor shall be entitled to payment by Licensee of all its attorneys’ fees and other costs and expenses incurred in resolving such dispute in addition to such other relief to which Licensor may be entitled in law or equity.


XIV.

WAIVER


Either party’s failure to exercise any right under this Agreement shall not constitute a waiver of any other terms or conditions of this Agreement with respect to any other or subsequent breach, nor a waiver by such party of its right at any time thereafter to require exact and strict compliance with the terms of this Agreement.


XV.

INDEPENDENT CONTRACTORS


The parties acknowledge and agree that they are dealing with each other hereunder as independent contractors. Nothing contained in the Agreement shall be interpreted as constituting either party the joint venturer or partner of the other party or as conferring upon either party the power or authority to bind the other party in any transaction with third parties.


XVI.

EQUITABLE RELIEF


Licensee recognizes and acknowledges that a breach by Licensee of this Agreement will cause Licensor irreparable damage which cannot be readily remedied in monetary damages in an action at law, and may, in addition thereto, constitute an infringement of the Trade Name.  In the event of any default or breach by Licensee, Licensor shall be entitled to immediate injunctive relief to prevent such irreparable harm, loss or dilution in addition to any other remedies available. Nothing herein shall limit Licensor’s right to seek monetary damages with respect to a breach.


XVII.

ENTIRE AGREEMENT


This Agreement, including the exhibits and attachments hereto, each of which are hereto incorporated by reference herein, constitutes the entire agreement between the parties and contains all of the terms and conditions of the agreement between the parties with respect to the subject matter hereof.  This Agreement supersedes any and all other agreements, whether oral or written, between the parties hereto with respect to the subject matter hereof.  No change or modification of this Agreement shall be valid unless the same shall be in writing and signed by the parties hereto.





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XVIII.

  SEVERABILITY


If any provisions of this Agreement, or the application of any such provisions to parties hereto, shall be held by a court of competent jurisdiction to be unlawful or unenforceable, the remaining provisions of this Agreement shall nevertheless be valid, enforceable and shall remain in full force and effect, and shall not be affected, impaired or invalidated in any manner.


XIX.

HEADINGS


The headings in this Agreement are inserted for convenience only and are not to be considered in the interpretation or construction of the provisions hereof.


XX.

NOTICES


All notices, requests or demands to be given under this Agreement from one party to the other  (collectively, “Notices”) shall be in writing and shall be given by personal delivery or by overnight courier service for next Business Day delivery (or Saturday delivery, if desired) at the other party’s address set forth below.  Notices given by personal delivery (i.e. by the sending party or a messenger) shall be deemed given on the date of delivery and Notices given by overnight courier shall be deemed given upon deposit with the overnight courier service. If any party’s address is a business, receipt by a receptionist, or by any person in the employ of such party, shall be deemed actual receipt by the party of Notices. The term, Business Day, means any day other than Saturday, Sunday or any other day on which state banks are required or are authorized to be closed in Chicago, Illinois.    Notices may be issued by an attorney for a party and in such case  such Notices shall be deemed given by such party. The parties’ addresses are as follows:


LICENSOR:

LICENSEE:

The Inland Real Estate Group, Inc.

Inland Southwest Management Corp.

2901 Butterfield Road

2901 Butterfield Road

Oak Brook, Illinois 60523

Oak Brook, Illinois 60523

Attn: Robert H. Baum, General Counsel

Attn:  Thomas P. McGuinness, President


A party’s addresses for notice may be changed from time to time by notice given to the other party in the manner herein provided for giving notice.


XXI.

FURTHER ASSURANCE


Each party to this Agreement agrees to execute and deliver any and all documents, and to perform any and all further acts, that may be reasonably necessary to carry out the provisions of this Agreement and the transactions contemplated hereby.





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XXII.

COUNTERPARTS


This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.


XXIII.

  SURVIVAL


The provisions of Articles IB, II, IV, V, VI, VII, VIII, IX, X, XI, XII, XIII, XIV, XVI, and XX will survive any termination of this Agreement.


XXIV.

ASSIGNMENT


Licensor may, in its sole discretion, assign this Agreement to another person or entity. Licensee shall be entitled to assign this Agreement to another person or entity only upon the prior written consent of Licensor, which consent may be withheld in Licensor’s sole discretion.





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WHEREAS, the parties have caused this Agreement to be duly executed as of the date set forth above.



THE INLAND REAL ESTATE GROUP, INC., an Illinois corporation



By: ________________________________

Name: _____________________________

Title: ______________________________


INLAND SOUTHWEST MANAGEMENT CORP., a Delaware corporation



By: ________________________________

Name: ______________________________

Title: ______________________________
































[Signature Page to License Agreement]





Page 11 of 11






EXHIBIT 10.536



EXECUTION COPY


LEGAL SERVICES AGREEMENT


This Legal Services Agreement (this “Agreement”), dated as of November 15, 2007 (the “Effective Date”), is entered into by and between The Inland Real Estate Group, Inc. an Illinois corporation (“Service Provider”) and Inland Western Retail Real Estate Trust, Inc., a Maryland corporation (the “Client”).


RECITALS


WHEREAS, the Law Department of Service Provider provides certain legal services, including without limitation, the legal services described and set forth in Exhibit A attached hereto, (the “Services”) to Affiliates (as defined herein) of the Service Provider and real estate investment trusts and other entities sponsored by Affiliates of Service Provider; and,


WHEREAS, the Client is desirous of retaining Service Provider to have Service Provider’s Law Department perform the Services for the Client in connection with the Client’s real estate business for the benefit of the Client and/or its Affiliates, and Service Provider is willing to have its Law Department perform the Services, subject to the terms and conditions set forth in this Agreement.


NOW, THEREFORE, in consideration of the mutual promises and obligations set forth below, the parties hereto, intending to be legally bound, agree to the foregoing and as follows:


ARTICLE I DEFINITIONS


“ Affiliate ” shall mean, except as otherwise provided herein, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, that Person.  For the purposes of this definition, “control” (including, with correlative meaning, the terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of that Person through the ownership of voting securities, by contract or otherwise.  With respect to the Client, any entity representing a joint venture or similar arrangement in which the Client, or an entity controlled by the Client, is the general partner, managing member, beneficiary or a trustee shall be deemed to be an “affiliate” of the Client.


“ Business Management Agreement ” shall mean that certain Advisory Agreement, dated as of September 18, 2003, as amended from time to time, between Inland Western Advisory Services, Inc. and the Client.

“ Person ” shall mean an individual, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization.


ARTICLE II

PERFORMANCE OF SERVICES




1






2.1

Service Provider agrees to perform the Services for the Client in connection with its real estate business for the benefit of Client and/or its or their Affiliates.  Service Provider shall perform and provide the Services in a professional manner and in accordance with all laws, statutes, ordinances, codes, rules and regulations applicable to the Services.  Service Provider may employ, contract with or use the service of any third party in connection with the performance of the Services as the Service Provider deems reasonably necessary or desirable, including independent, outside counsel.


2.2

 The Client and Service Provider acknowledge that the relationship created hereby is on a non-exclusive basis, and that (x) the Client shall not be required to retain Service Provider to perform the Services or any individual Service, (y) the Client shall be permitted to retain third parties to perform for the Client services which are the same as or similar to the Services or any individual Service, and (z) Service Provider shall be permitted to perform the Services for other parties.  Notwithstanding the foregoing or anything else contained in this Agreement to the contrary, Client agrees that Service Provider’s failure to perform and provide any of the Services shall not constitute a default under the terms and provisions of this Agreement if any failure is due solely to any of the following:


(a)

Service Provider has a reasonable basis, in Service Provider’s opinion, for concluding that the performance of the Service could subject Service Provider to liability or material damages in civil litigation; or


(b)

Service Provider has an insufficient number of qualified personnel to provide the Services, provided that Service Provider shall use commercially reasonable efforts to eliminate and minimize the duration of the shortage of qualified personnel; or,


(c)

Service Provider has a reasonable basis, in Service Provider’s opinion, for concluding that the performance of the Service could cause Service Provider or any of its employees to be in violation of its professional code of ethics or other ethical standards the Service Provider or any of its employees is subject to.  


ARTICLE III

TERM AND TERMINATION


3.1

Subject to the termination provisions set forth in this Article III, this Agreement shall continue for an initial period of four (4) years from the Effective Date (“Initial Services Term”) and shall be automatically renewed for consecutive three (3) year terms thereafter (each an “Additional Services Term”) unless earlier terminated as hereafter provided.


3.2

 At any time during the Initial Services Term or at any time during an Additional Services Term, Client may terminate this Agreement for cause ( i.e ., a material default by Service Provider hereunder) upon ten (10) days’ prior written notice to Service Provider; provided, however, that prior to exercising its rights under this Section 3.2, Client shall notify Service Provider of any default, and Service Provider shall have thirty (30) days after receipt of the notice to cure the default to the Client’s reasonable satisfaction. As full compensation to which Service Provider shall be entitled, Client shall promptly make payment to Service Provider as provided in Article V below for the Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.




2






3.3

At any time during any Additional Services Term, the Client shall have the right to terminate this Agreement, without cause, by providing not less than 180 days’ prior written notice to Service Provider of any election to so terminate and specifying the effective date of such termination. As full compensation to which Service Provider shall be entitled, Client shall promptly make payment to Service Provider as provided in Article V below for the Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.


3.4

At any time during the Initial Services Term or during an Additional Services Term, Service Provider may elect to limit one or more of the Services it is providing to Client upon not less than thirty (30) days’ prior written notice to Client, specifying the effective date such Services shall no longer be performed and describing in reasonable detail the Services to be terminated. As full compensation to which Service Provider shall be entitled, Client shall promptly make payment to Service Provider as provided in Article V below for the Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.


3.5

At any time after the first anniversary of the Effective Date, Service Provider shall have the right to terminate this Agreement by providing not less than sixty (60) days’ prior written notice to Client, specifying the effective date of such termination. The foregoing notwithstanding, (x) Service Provider, upon ten (10) days’ prior written notice to Client, may terminate this Agreement, or decline to provide a particular Service hereunder upon the occurrence of any of the following events:


(i)

The Client fails, in the absence of a bona fide dispute with respect to any payment, to make payment for Services on its due date; provided, however, Client may cure the breach up to three (3) times per calendar year by making payment within ten (10) days of the Client’s receipt of written notice that it failed to make the payment when due;


(ii)

The Client requests that Service Provider provide Services that in the Service Provider’s opinion would violate any applicable law or the rules of any regulatory body with jurisdiction and the Client does not promptly withdraw the request upon Service Provider’s notice to Client of Service Provider’s aforesaid opinion;


(iii)

The Client requests that Service Provider take any action  that in the Service Provider’s opinion would result in the commission of a fraud upon any person or party and the Client does not promptly withdraw the request upon Service Provider’s notice to Client of Service Provider’s aforesaid opinion;


(iv)

The Client requests that Service Provider take any action that, upon the advice of counsel to Service Provider, could subject Service Provider to liability or material damages in civil litigation and the Client does not promptly withdraw the request upon Service Provider’s notice to Client of Service Provider’s aforesaid advice of counsel; or


(v)

The Client requests that Service Provider provide Services that in the Service Provider’s opinion would cause Service Provider or any of its employees to be in violation of its professional code of ethics or other ethical standards the Service




3





Provider or any of its employees is subject to and the Client does not promptly withdraw the request upon Service Provider’s notice to Client of Service Provider’s aforesaid opinion;  


and (y) if at any time during the Initial Services Term or any Additional Services Term the Client has had a Change of Control, as hereinafter defined, Service Provider shall have the right to terminate this Agreement, without cause, upon written notice to the Client.  


 As full compensation to which Service Provider shall be entitled, Client shall promptly make payment to Service Provider as provided in Article V below for Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.


3.6

Upon any termination of this Agreement or cessation of Services during the term of the Agreement, Service Provider shall provide Client with a reasonable opportunity to transition any terminated Services to any replacement provider(s) designated by the Client (“Replacement Provider”), which period shall not be more than sixty (60) days from the date of termination of this Agreement or specified terminated Services (the “Transition Period”).  During the Transition Period, Service Provider shall use reasonable efforts to avoid causing any unnecessary interruption of the terminated Services so as to provide a smooth transition of such Services (the “Transition”).  All services related to Transition shall be deemed Services and subject to the charges and fees set forth in Exhibit A attached hereto.


3.7

For the purposes hereof, the term, “Change of Control” shall mean the occurrence of any one or more of the following:


(a)

Any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Client to any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended; provided, however, that any sale, lease, exchange or transfer to (including, without limitation, any merger or other business combination with or into) any of the following shall not constitute a Change of Control:  (i) any affiliate controlled by the Client, (ii) Inland Real Estate Corporation, (iii) Inland American Real Estate Trust, Inc., (iv) The Inland Group, Inc., or (v) any affiliate controlled by any of the entities listed in clauses (i) through (iv) above (all of the entities described in clauses (i) through (v) above are hereinafter sometimes referred to as the “Inland Companies”;


(b)

The approval by the holders of the outstanding shares of the Client of any plan or proposal for the liquidation or dissolution of the Client; or


(c)

Any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (other than any one or more of the Inland Companies) shall become the owner, directly or indirectly, beneficially or of record, of shares of the Client representing more than twenty-five percent (25%) of the aggregate ordinary voting power represented by the issued and outstanding common shares of the Client.


ARTICLE IV

INTERNAL CONTROL PROCEDURES


4.1

As a public entity, Client is required to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as may be amended from time to time (“Section 404”).  Notwithstanding anything to the contrary contained in this Agreement, if the Client shall determine that to provide services to and for the benefit of the Client, Service Provider must comply with the requirements of Section 404, then the Client and Service Provider shall develop and implement an internal control plan or other processes and procedures (or amend and revise any existing internal control plan, processes and procedures) to comply with the requirements (collectively, the “Internal Control Plan”).  Once developed and implemented, Service Provider shall use its reasonable best efforts to have its internal controls comply in all respects with the requirements of Section 404.  The cost and expense of development and initial implementation of any Internal Control Plan shall be borne by all clients of Service Provider that require Service Provider to comply with Section 404.  Upon determination that an Internal Control Plan must be developed and implemented, Service Provider, the Client and all other clients of Service Provider requiring Service Provider to comply with Section 404 shall, in good faith, negotiate an equitable allocation of the costs and expenses of the development and implementation of the Internal Control Plan between and among the parties.  The foregoing provisions regarding payment and allocation of the costs and expenses of development and implementation of any Internal Control Plan shall not apply to any Internal Control Plan developed and implemented, or in the process of being developed and implemented, on or prior to the date of this Agreement.


ARTICLE V

PAYMENT


5.1

Service Provider shall invoice the Client monthly (or on any other basis as reasonably agreed to by the Client) for any Services performed during the immediately preceding calendar month (or any other period agreed to by the Client).  Payment shall be due thirty (30) days after the date of the Client’s receipt of the same and shall be as provided in Section 2 of Exhibit A attached hereto.  The compensation to be paid by the Client under this Article V and Section 2 of Exhibit A attached hereto shall constitute full and complete payment for any and all services rendered and performed by Service Provider under and pursuant to this Agreement, which compensation includes any and all labor, costs and expenses incurred or to be incurred by Service Provider in connection with its performance of the Services.


ARTICLE VI

RIGHT TO AUDIT


6.1

Service Provider shall keep and, for not more than two times annually, make available for the examination and audit of or by the Client, or the Client’s authorized employees, agents or representatives during normal business hours at the Client’s cost, all data, materials and information, including but not limited to records of all receipts, costs and disbursements made by Service Provider with respect to the Services, all charges, costs and expenses of Service Provider related to the provision of the Services, as more particularly set forth and limited in Exhibit A attached hereto, all books, accounts, memoranda, files and all or any other documents indicating, documenting, verifying or substantiating the cost and appropriateness of any and all charges, costs, expenditures and receipts relating to the Services. Service Provider shall allow the Client (and any of the Client’s employees, representatives, accountants and auditors), upon reasonable prior notice, reasonable access to personnel, representatives and employees of Service Provider’s Law Department and all books and records and other business records and files of Service Provider’s Law Department that are reasonably required by the Client for audit and tax matters.


ARTICLE VII




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CONFIDENTIALITY


7.1

During the term of this Agreement, the parties may communicate to each other certain confidential information to enable Service Provider to perform the services hereunder, and/or Service Provider may develop confidential information for the Client.  Each party agrees:


a.

to treat, and to cause its employees, agents, subcontractors and representatives, if any, to treat as privileged and confidential, all confidential information; and


b.

except as necessary in the performance of the Service, not to disclose any privileged and confidential information or make available any reports, recommendations and/or conclusions which Service Provider may make for the Client to any person, firm or corporation without first obtaining the Client’s written approval.


7.2

If any party learns that disclosure of privileged and confidential information is sought in or by a court or governmental body of competent jurisdiction or through other means, the party shall:


a.

give prompt notice to the other party prior to making the disclosure and allow the other party, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, privileged and confidential information;


b.

reasonably cooperate with the other party in its efforts to prevent, or obtain a protective order for disclosure; and


c.

disclose the minimum amount of information required to be disclosed.


ARTICLE VIII

MISCELLANEOUS


8.1

Binding Effect .  This Agreement shall be binding upon, and inure to the benefit of, the successors and assigns, if any, of each party hereto.


8.2

Governing Law; Jurisdiction .  This Agreement shall be subject to and governed by the internal laws of the State of Illinois without regard to principles of choice of law.


8.3

Waiver .  Either party’s failure to exercise any right under this Agreement shall neither constitute a waiver of any other terms or conditions of this Agreement with respect to any other or subsequent breach, nor a waiver by that party of its right at any time thereafter to require exact and strict compliance with the terms of this Agreement.


8.4

Independent Contractors .  The parties acknowledge and agree that they are dealing with each other hereunder as independent contractors.  Nothing contained in the Agreement shall be interpreted as constituting either party to be the joint venturer or partner of the other party or as conferring upon either party the power or authority to bind the other party in any transaction with third parties.


8.5

Arbitration.

All disputes under this Agreement shall be resolved exclusively by binding arbitration, and each party hereto hereby waives any right it may otherwise have to resolve any dispute




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under this Agreement by any other means than binding arbitration. As a minimum set of rules in any arbitration the parties shall act in accordance with the terms of Exhibit B attached hereto and made a part hereof.


8.6

Entire Agreement .  This Agreement, including the exhibits hereto, constitutes the entire agreement between the parties and contains all of the terms and conditions of the agreement between the parties with respect to the subject matter hereof.  This Agreement supersedes any and all other agreements, whether oral or written, between the parties hereto, including any Affiliates of Service Provider, with respect to the subject matter hereof.  No change or modification of this Agreement shall be valid unless the same shall be in writing and signed by the parties hereto.


8.7

Severability .  If any provisions of this Agreement, or the application of any such provisions to parties hereto, are determined by arbitration to be unlawful or unenforceable, the remaining provisions of this Agreement shall nevertheless be valid, enforceable and shall remain in full force and effect, and shall not be affected, impaired or invalidated in any manner.


8.8

Headings .  The headings in this Agreement are inserted for convenience only and are not to be considered in the interpretation or construction of the provisions hereof.


8.9

Notices .  All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given or delivered:


a.

when delivered personally or by commercial messenger;


b.

one (1) business day following deposit with a recognized overnight courier service, provided the deposit occurs prior to the deadline imposed by the overnight courier service for overnight delivery; or


c.

when transmitted, if sent by facsimile copy, provided confirmation of receipt is received by sender and such notice is sent by an additional method provided hereunder;


in each case above provided the notice or other communication is addressed to the intended recipient thereof as set forth below:



If to Service Provider, to:

The Inland Real Estate Group, Inc.

2901 Butterfield Road

Oak Brook, IL  60523

Attention:

Robert H. Baum, General Counsel Facsimile:       (630) 218-8034



 

If to the Client, to :

Inland Western Retail Real Estate Trust, Inc.

2901 Butterfield Road

Oak Brook, IL  60523

Attention:

Steven P. Grimes, CFO




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Facsimile:       (630) 218-4955


A party’s address for notice may be changed from time to time by notice given to the other party in the manner herein provided for giving notice.


8.9

Further Assurance .  Each party to this Agreement agrees to execute and deliver any and all documents, and to perform any and all further acts that may be reasonably necessary to carry out the provisions of this Agreement and the transactions contemplated hereby.


8.10

Counterparts .  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.


8.11

Assignment .  The Client may assign this Agreement to any of its direct or indirect, wholly-owned Affiliates.  Service Provider shall not assign this Agreement without the express written consent of the Client.



[SIGNATURE PAGE FOLLOWS]






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WHEREFORE, the parties hereto have caused this Agreement to be duly executed as of the date first above written.



CLIENT:

SERVICE PROVIDER:


Inland Western Retail Real Estate Trust, Inc.,

The Inland Real Estate Group, Inc.,

a Maryland corporation

an Illinois corporation



By: ______________________________

By: ______________________________

Name: ___________________________

Name: ___________________________

Its: ______________________________

Its: ______________________________





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EXHIBIT A


1.

Services .  The services to be provided under this Agreement shall be provided as and when requested in writing by the Client shall include, but not limited to, the following:


a.

drafting, reviewing and negotiating letters of intent, contracts, leases, loan documents and other agreements (and amendments to any of the foregoing) relating to prospective acquisitions, dispositions, financings, joint ventures, leases and other real estate transactions;


b.

performing due diligence (i.e., reviews of leases, title, survey, services contracts and agreements, tenant estoppel certificates, etc.) with respect to prospective acquisitions, dispositions, financings, joint ventures, leases and other real estate transactions;


c.

administering and monitoring legal proceedings of the Client and its Affiliates, including, without limitation, tenant evictions, tenant claims and tenant bankruptcies;


d.

preparing closing binders for each transaction; and


e.

rendering legal opinions for financings and other real estate transactions, as and when appropriate.


f.

the selection, retention and directing of outside counsel.


The foregoing notwithstanding, Service Provider shall not be obligated to supervise outside counsel retained by Client.


2.

Compensation :  Service Provider shall be paid for legal services rendered under this Agreement on the basis of actual time spent by the attorneys and paralegals of the Service Provider, at the hourly billing rate of Service Provider’s Law Department then in effect, in increments of one-tenth of one hour.  From time to time upon the Client’s request, Service Provider shall provide a list of all attorneys and paralegals in the Service Provider’s Law Department providing any of the Services under this Agreement.  The Service Provider’s billing rates shall be subject to change by Service Provider on an annual basis (as of January 1 of each calendar year), provided, however, that the billing rates charged by Service Provider hereunder shall be no greater than the billing rates charged to any other client of Service Provider and shall be no greater than ninety percent (90%) of the billing rate of attorneys of similar experience and position employed by nationally recognized law firms located in Chicago, Illinois performing similar services. Each attorney and paralegal (including outside counsel attorneys and paralegals) shall keep and maintain, and Service Provider shall make available to the Client upon request,




9





a record (“Timesheets”) of all of the Client transactions on which any attorneys and paralegals work. The Timesheets and/or the Timesheets program shall set forth the following:


a.

the specific matter worked on;


b.

the Client entity for which the Services are being performed;


c.

the actual amount of time spent on the matter for the applicable calendar month and for the transaction/matter on a cumulative basis; and


d.

a general description of the nature of the work and services performed.


Each invoice for Services rendered by Service Provider shall include a copy of each attorney’s and paralegal’s Timesheets supporting the amount requested for payment in the invoice.  The Client also shall reimburse Service Provider for reasonable, actual, out-of-pocket costs, expenses and charges incurred by Service Provider with respect to the rendering of Services under this Agreement, including, without limitation, title and survey costs and expenses; third party mailing, courier and other delivery costs and charges; travel expenses; and the fees and costs charged by outside counsel retained by Service Provider in connection with the Services rendered to Client.


Unless agreed to by the Client prior to the incurrence thereof, the Client shall not be separately charged for any other items, costs or expenses incurred, or disbursements made, by Service Provider, including, without limitation, any of the following:


i.

the time or salaries of any administrative assistants, secretaries, office assistants, interns and other personnel of the Service Provider (except to the extent of overtime compensation where overtime is required, which overtime compensation shall be reimbursed to Service Provider by Client);


ii.

travel time (except to the extent that an attorney or paralegal actually shall provide Services during that time);


iii.

local telephone calls or facsimile or e-mail charges;


iv.

copy costs (excluding high volume copying jobs or third party copying services which costs shall be paid for by Client);


v.

administrative overhead;


vi.

rent;


vii.

costs of materials and supplies; (viii) employee benefits, salaries and/or bonuses; and/or


viii.

internal courier and delivery charges of employees of Service Provider; provided, however, Service Provider shall be reimbursed for out-of-town travel costs, including without limitation, hotel, food and transportation costs.




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EXHIBIT B

ARBITRATION RULES


The place of the arbitration shall be Chicago, Illinois.  The arbitration must be held in the English language in accordance with the Streamlined Arbitration Rules and Procedures of JAMS in effect on the date hereof, except as modified by this Agreement.  The arbitration shall be governed by the Illinois Code of Civil Procedure.

The arbitration will be held before a single arbitrator selected by the Client and the Service Provider.  If the parties cannot agree on an arbitrator within fourteen (14) days of the delivery of an Arbitration Demand, hereinafter defined, JAMS will appoint such arbitrator.  The arbitrator will be knowledgeable regarding commercial transactions similar in nature to the transactions contemplated by this Agreement.

Any party initiating arbitration (the “ Arbitration Claimant ”) will give to the other party (the “ Arbitration Respondent ”) notice of its intention to arbitrate (the “ Arbitration Demand ”).  The Arbitration Demand will contain a notice regarding the nature of the claim.  The Arbitration Respondent will file an answering statement (the “ Arbitration Answer ”) within fourteen (14) days after the Arbitration Demand.  The Arbitration Answer will contain a statement setting forth in reasonable detail the Arbitration Respondent’s responses and defenses to the claim set forth in the Arbitration Demand (“Arbitrated Claim”).  If the Arbitration Respondent asserts a counterclaim, (i) the Arbitration Respondent shall send it with the Arbitration Answer and such counterclaim must include a statement setting forth in reasonable detail the nature of the counterclaim, the amount involved, if any, and the remedy sought, and (ii) the Arbitration Claimant will file a reply statement (the “ Arbitration Reply ”) as soon as is reasonably practicable, but in no event later than fourteen (14) days, after the counterclaim.  The Arbitration Reply will contain a statement setting forth in reasonable detail the Arbitration Claimant’s responses and defenses to the counterclaim.  If no Arbitration Answer or Arbitration Reply is given within the stated time, the claim or the counterclaim will be assumed to be denied.  Failure to file an Arbitration Answer or Arbitration Reply will not operate to delay the arbitration.

Unless the parties agree otherwise, the arbitrator may order depositions only for good cause and each party may make such document requests and other discovery (other than depositions) as permitted in accordance with the Streamlined Arbitration Rules and Procedures of JAMS in effect on the date hereof.

The arbitration hearings will be conducted over a period not to exceed thirty (30) days commencing as of the date of the first hearing.  The arbitrator shall make a final decision on the Arbitrated Claim within thirty (30) days of the final hearing.  The arbitrator may make such orders with regard to scheduling, allocation of hearing time, or otherwise as he or she deems appropriate to achieve compliance with these time limitations.  The parties have included the foregoing provisions limiting the scope and extent of the arbitration with the intention of providing for prompt, economic and fair resolution of any dispute submitted to arbitration.

The Arbitration Claimant, on the one hand, and the Arbitration Respondent, on the other, will, as an initial matter, equally bear the costs and fees of the arbitration, if applicable, but the arbitrator shall award such costs in inverse proportion as the Arbitration Claimant, on the one hand, and the Arbitration Respondent, on the other, may prevail on the matters resolved by the arbitrator (based on the variance of their respective proposed Arbitration Demand, Arbitration Answer and/or Arbitration Reply, as applicable, from the determination of the arbitrator), which proportionate allocations shall be determined by the arbitrator at the time the determination of the arbitrator is rendered on the merits of the matters submitted.







The arbitrator shall enter a written award specifying the basis for his or her decision, including findings of fact and conclusions of law, the basis for the damages award and a breakdown of the damages awarded, and the basis for any other remedy.  Any party dissatisfied with the award may invoke the JAMS Optional Arbitration Appeal Procedure (based on the rules therefor in effect at the time of this Agreement).  Such JAMS Optional Arbitration Appeal shall be limited to whether there are any erroneous conclusions of law, or any findings of fact not supported by substantial evidence.  The appellate arbitral panel may vacate, modify, correct, or affirm the award in whole or in any part.  The award (as modified, corrected, or affirmed by the appellate arbitral panel, or if no such JAMS appeal is taken, as originally rendered by the arbitrator) will be considered as a final and binding resolution of the disagreement.

Any arbitration proceeding will be conducted on a confidential basis, and any confidential material disclosed during any such proceeding will be kept confidential by the parties to such proceeding and by the arbitrator.

The arbitrator’s discretion to fashion remedies hereunder will be no broader or narrower than the legal and equitable remedies available to a court before which such Arbitrated Claim may have been brought but for the provisions of this Exhibit B.

The arbitral award will be the exclusive remedy of the parties for all claims, counterclaims, issues or accountings presented or pleaded to the arbitrator.  The award will include interest from the date of the Arbitrated Claim until the award is fully paid, computed at the then-prevailing U.S. prime rate, plus five percent (5%).  Any additional costs, fees or expenses incurred in enforcing the arbitral award (or successfully resisting it) will be borne by the party against which enforcement is sought if such award is successfully enforced (or borne by the party seeking to enforce such award if the resisting party successfully resists its enforcement).  Any party may enforce an arbitral award in any court of competent jurisdiction.







EXHIBIT 10.539


EXECUTION COPY


LICENSE AGREEMENT


This License Agreement (“Agreement”), by and between The Inland Real Estate Group, Inc., an Illinois corporation with its principal place of business at 2901 Butterfield Road, Oak Brook, Illinois 60523 (“Licensor”), and Inland Western Management Corp., a Delaware corporation, with its principal place of business at 2901 Butterfield Road, Oak Brook, Illinois 60523 (“Licensee”), is effective, nunc pro tunc , as of January 30, 2003 (the “Effective Date”) , and executed as of November 15, 2007 .


WITNESSETH:


WHEREAS, Licensor, through its business and that of its predecessor-in-interest, has adopted and used or caused to be used in United States commerce in connection with certain services in the field of real estate the trade name “Inland” which is registered in the United States Patent and Trademark Office (“USPTO”) as U.S. Registration No. 2,786,134 (the “Trade Name”); and


WHEREAS, Licensee desires to use the Trade Name in connection with the business it is engaged in, as more fully described below; and


WHEREAS, Licensor is willing to grant to Licensee a non-exclusive, non-transferable, revocable, royalty-free right to use the Trade Name subject to, and Licensee is willing to use the Trade Name in accordance with all of the terms and conditions set forth herein.


NOW, THEREFORE, in exchange for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in consideration of the mutual covenants set forth herein, the parties agree as follows:


I.

GRANT OF LICENSE


A.

Licensor grants to Licensee a non-exclusive, revocable, non-transferable, royalty-free right to use the Trade Name solely in connection with management services for Inland Western Retail Real Estate Trust, Inc. (the “Services”).  Use of the Trade Name by Licensee shall comply with the terms and conditions of this Agreement.


B.

Licensor hereby reserves any and all rights not expressly and explicitly granted in this Agreement, including, but not limited to, Licensor’s sole right to authorize or license use of the Trade Name or any other trademarks, designs, domain names, trade names, names or designations which are the same, similar to or incorporate the Trade Name, to any third party for any use whatsoever. Without limiting the rights reserved in the first sentence of this paragraph, Licensor hereby reserves any and all rights to use, authorize use or license use of the Trade Name or any other trademarks, designs, domain names, trade names, names or designations which are the same, similar to or incorporate the Trade Name in any geographic territory and in any language.


II.

OWNERSHIP OF THE TRADE NAME


A.

Licensee recognizes the great value of the goodwill associated with the Trade Name and (i) acknowledges that Licensor owns exclusive right, title and interest in and to the Trade




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Name, and any and all goodwill pertaining thereto (including, without limitation, any trademark applications and/or registrations therefor); (ii) agrees that it will do nothing inconsistent with such ownership including, but not limited to, directly or indirectly challenging the validity of, or otherwise impairing, any intellectual property rights of Licensor in and to the Trade Name, or Licensor’s ownership thereof, nor may it assist others in doing so, and (iii) agrees that all use of the Trade Name by Licensee shall inure solely to the benefit of Licensor.  Licensee agrees that nothing in this Agreement shall give Licensee any right, title or interest in the Trade Name other than the right to use the Trade Name in accordance with this Agreement.  Licensee agrees not to seek registration of the Trade Name, or any trademarks, designs, domain names, trade names, names or designations similar thereto or which are any abbreviation thereof, with any domestic or foreign governmental or quasi-governmental authority or as part of an Internet domain name. The provisions of this paragraph shall survive the expiration or termination of this Agreement.


B.

Licensor may file trademark applications to protect the Trade Name, but Licensor is not required to do so, nor is Licensor required to renew or maintain registrations for the Trade Name.  Licensee agrees to assist Licensor, at Licensor’s request, in the procurement and maintenance of any protection of Licensor’s rights in the Trade Name including, without limitation, in the prosecution of trademark applications for the Trade Name in Licensor’s name.


III.

USE OF THE TRADE NAME


A.

 In connection with its permitted use of the Trade Name, Licensee shall not in any manner represent that it has any ownership interest in the Trade Name, and Licensee specifically acknowledges that its permitted use of the Trade Name shall not create in the Licensee any right, title or interest in the Trade Name.


B.

Without detracting from the generality of the foregoing, it is agreed and understood by Licensee that Licensee does not have permission to:  1) sublicense the Trade Name, or 2) transfer, sell or assign any right granted by this Agreement, or 3) modify the Trade Name in any manner whatsoever.  Licensee further acknowledges and agrees that it does not have the right to use the Trade Name in connection with products and services other than as expressly permitted herein.


C.

Licensee acknowledges the importance to Licensor of its reputation and goodwill and to the public of maintaining high, uniform standards of quality in the services provided in connection with the Trade Name. Licensee therefore agrees to maintain a high standard of quality in connection with the Services and its use of the Trade Name in connection therewith commensurate with or better than the high standard maintained by Licensor in connection with its business prior to the effective date, and agrees to perform the Services so as not to impair Licensor’s reputation or goodwill in connection with the Trade Name. To ensure Licensor the ability to protect the goodwill associated with the Trade Name and the validity and integrity of the Trade Name, and to prevent any deception to the public, Licensee shall operate its business in accordance with the standards and requirements of quality, which from time to time are prescribed by Licensor, and shall use the Trade Name in a manner consistent with any format prescribed by Licensor for any and all media, including without limitation all signage, marketing materials, press releases and on the Internet.  If there are any modifications in the Standard Usage Guidelines, they will be delivered to Licensee in writing. Licensee agrees that such standards shall include but not be limited to strict compliance with all applicable statutes, laws, ordinances, rules, regulations and orders of public authorities in effect from time to time and that such laws shall include but not be limited to fair housing laws, antitrust laws, licensing laws, environmental laws, securities laws and consumer laws. Licensee further agrees that such standards shall include the obligation to conduct its business in accordance with the highest ethical standards applicable in its industry. In the event of any




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failure by Licensee to operate its business in accordance with the standards and requirements set forth herein or as prescribed by Licensor from time to time, or in the event that Licensee engages in any conduct or failure to act that in the sole judgment of  Licensor adversely impacts on the name, reputation, goodwill or business of Licensor, such conduct or failure to act shall constitute a material breach of this Agreement.  If such material breach has not been cured within thirty (30) days following receipt of notice from Licensor, this Agreement shall be terminated.


D.

To determine whether Licensee is complying with this Agreement, Licensor shall have the right to periodically monitor Licensee’s use of the Trade Name.  Upon request by Licensor, Licensee shall provide Licensor with representative samples of each such use prior to the time the Trade Name is published, including but not limited to the use on all signage, marketing materials, press releases and on the Internet.   If Licensor determines that Licensee is using the Trade Name improperly, and/or in a way that does not meet the standards referred to in Article III. C. above, or requirements set forth herein and/or to which Licensor may require adherence to from time to time, Licensor shall notify Licensee, and Licensee shall remedy the improper use within thirty (30) days following receipt of such notice from Licensor. In addition, if Licensor determines that Licensee is engaging in conduct or activities that dilute or damage the value of the goodwill associated with the Trade Name, in each case, Licensor shall provide notice of the conduct or activities to Licensee, and Licensee shall immediately cease the conduct or activities and shall take all actions requested by Licensor to mitigate or remedy any dilution or damage. Use of the Trade Name  in connection with an infringement of any of Licensor’s or a third party’s rights, including but not limited to rights under trademark, patent, trade secret or copyright laws, shall constitute a material breach of this Agreement. If such material breach has not been cured within thirty (30) days following receipt of notice from Licensor, this Agreement shall be terminated.


E.

Licensee shall ensure that trademark, service mark, and any and all other proprietary rights notices that are appropriate to protect the Trade Name is conspicuously placed on all items bearing the Trade Name used by Licensee in accordance with the Standard Usage Guidelines.  In the event that Licensee learns of or has reason to believe that a third party is infringing or threatens to infringe the Trade Name (the “Infringement”), it shall immediately notify Licensor, and Licensor may take such steps as it believes appropriate (in its sole discretion) to terminate or otherwise address the Infringement.  Licensee agrees to cooperate with Licensor and to provide  support to Licensor in such efforts.  If Licensee chooses to appoint counsel on its own, it shall be at Licensee’s sole expense. Licensee shall not take any action to prosecute or settle any such Infringement without Licensor’s written consent.


IV.

LEGEND; DISCLAIMER


Upon Licensor’s request, Licensee shall include 1) a trademark legend satisfactory to Licensor in accordance with the Standard Usage Guidelines indicating that the Trade Name is owned by Licensor and are being used under license and/or 2) a disclaimer that Licensee and not Licensor has produced the materials and is responsible for the content thereof whenever the Trade Name may be used, including but not limited to on signage, marketing materials, letterhead, business cards, flags, checks, documents, promotional items,  press releases or on the Internet. Further, Licensee agrees to display a trademark registration symbol (i.e., “®”) immediately after the Trade Name at least once in any piece of printed or visual material in which they appear (and generally  in its first appearance in such material), normally along side the Trade Name.  If the Trade Name appears in any printed or visual material (other than letterhead, envelopes, or business cards) in which another trademark, design, domain name, trade name, name or designation not belonging to Licensor also appears, the words “A registered mark of The Inland Real Estate Group, Inc.” (or such other legend as may be designated by Licensor) shall appear along with the registration symbol next to the Trade Name.





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V.

TERMS AND TERMINATION


A.

The initial term (the “Initial Term”) of this Agreement shall commence as of the Effective Date and, unless terminated earlier as provided  below, automatically shall expire and terminate on the fifth anniversary of the Effective Date (as may be renewed and extended as hereinafter provided, the “Expiration Date”). Notwithstanding the foregoing, the term of this Agreement automatically shall be renewed and extended for consecutive five year periods after the initial Expiration Date (each of which periods (a) shall commence as of the day immediately succeeding the then scheduled Expiration Date, and (b) hereinafter shall be referred to herein as a “Renewal Term”), unless either party hereto elects not to renew and extend the term of this Agreement by delivering notice of such election to the other on or before the ninetieth (90 th ) day preceding the then scheduled expiration of the Initial Term or applicable Renewal Term, as the case may be.


B.

Notwithstanding Subparagraph A hereof, Licensor may terminate this Agreement at its sole discretion with or without cause upon thirty (30) days prior written notice, and Licensee may terminate this Agreement at its sole discretion with or without cause upon thirty (30)  days prior written notice.


C.

Notwithstanding Subparagraphs A and B above, if Licensee makes any assignment of assets or business for the benefit of creditors, if a trustee or receiver is appointed to administer or conduct Licensee's business or affairs, if Licensee is adjudged in any legal proceeding to be either a voluntary or involuntary bankrupt, if Licensee fails to comply with any provision of this Agreement, or if Licensee changes its name in whole or in part, Licensor may terminate this Agreement immediately without notice.


D.

Upon the termination or expiration of this Agreement, the License granted hereunder shall immediately and automatically terminate, and Licensee agrees to immediately discontinue any and all use of the Trade Name and to deliver up to Licensor, or its duly authorized representatives, all signage, marketing materials, letterhead, business cards, flags, checks, documents promotional items, press releases, Internet usage and any and all other papers or materials upon which the Trade Name appears, and furthermore will at no time adopt or use, without Licensor's prior written consent, any word, phrase, colors, symbol, logos, marks or other designations which are similar to or likely to be confusing with the Trade Name.


VI.

OBLIGATIONS ON TERMINATION


Any termination of this Agreement shall not impair any other accrued rights or remedies of either Licensor or Licensee.  Upon termination of this Agreement, Licensee shall immediately cease and desist from using the Trade Name, in accordance with the terms set forth herein. Licensee acknowledges and agrees that no indemnities or compensation of any kind shall be due to Licensee as a result of the termination or expiration of this Agreement.  In particular, Licensee waives any claim it may have or acquire against Licensor for any expenses incurred by it in preparing for and operating under this Agreement including, but not limited to, the engagement of any employees or contractors, the rental, purchase, furnishing or remodeling of any facilities and/or the rental, purchase or other acquisition of equipment. Nothing herein shall be construed to relieve Licensee of any obligations with respect to activities undertaken in connection with Licensee’s operation and performance under this Agreement prior to the date of such expiration or termination including, but not limited to, Licensee’s defense and indemnity obligations, and such obligations shall survive any such termination or expiration.  Notwithstanding the above, the provisions of Articles  IB, II, IV, V, VI, VII, VIII, IX, X, XI, XII, XIII, XIV, XVI, and XX shall survive any termination of this Agreement.




Page 4 of 11





VII.

REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSEE


Licensee has requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The execution and delivery by Licensee of this Agreement has been duly authorized by all necessary corporate actions on the part of the Licensee.  This Agreement has been duly and validly executed and delivered by Licensee and, assuming the due authorization, execution and delivery hereof by Licensor, constitutes or will constitute, as applicable, a legal, valid and binding obligation of Licensee, enforceable against Licensee in accordance with its terms, except as enforcement may be limited by:  


(a)

bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally; and


(b)

general equitable principles.


Licensee represents and warrants to Licensor that the licenses granted by this Agreement do not and shall not result in a breach of or constitute a default or violation under any agreement to which Licensee is subject or by which Licensee is bound.  


Licensee shall immediately notify Licensor if Licensee becomes aware of any event, circumstance, transaction or occurrence that would make any of the representations or warranties of Licensee contained in this Agreement not true in any respect.  


Licensee shall immediately deliver to Licensor any and all written notices and/or written communications delivered to or received from:


(a)

any person or entity challenging or questioning the validity, ownership, use, enforceability, registerability or licensing of the Trade Name;


(b)

any person or entity challenging or questioning the validity of this Agreement or the licenses and rights granted under and pursuant to this Agreement; or


(c)

any governmental authority in regards to the validity, ownership, use, enforceability, registerability and/or licensing of the Trade Name.  


Licensee shall not take any actions that would reasonably be expected to affect the registered status or ownership, or create confusion regarding the ownership, of the Trade Name by Licensor.  


Licensee shall use its best efforts, and shall cooperate with Licensor, to correct any market confusion related to the use of the Trade Name and any other marks licensed by Licensor to other Affiliates of Licensor.


VIII.

REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSOR


Licensor has the requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The execution and delivery by Licensor of this Agreement has been duly authorized by all necessary corporate actions on the part of the Licensor.  This Agreement has been duly and validly executed and delivered by Licensor and, assuming the due authorization, execution




Page 5 of 11




and delivery hereof by Licensee, constitutes or will constitute, as applicable, a legal, valid and binding obligation of Licensor, enforceable against Licensor in accordance with its terms, except as enforcement may be limited by:


(a)

bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally; and


(b)

general equitable principles.


Except as set forth above, Licensor makes no representations or warranties, either express or implied, arising by law or otherwise including, but not limited to, implied warranties of non-infringement of third-party rights by the Trade Name or fitness for a particular purpose.  In no event will Licensor have any obligation or liability resulting from tort, or loss of revenue or profit, or for incidental or consequential damages.


IX.

CONFIDENTIAL INFORMATION AND DISCLOSURE


Unless required by law, and except to assert its rights hereunder or for disclosure to its own employees, attorneys, financial advisors on a “need to know” basis, both parties agree not to disclose the terms of this Agreement or matters relating thereto without the prior written consent of the other party which consent shall not be unreasonably withheld.


X.

INDEMNIFICATION


Licensee agrees to indemnify, defend and hold Licensor and its officers, directors, employees and agents, its parent, affiliates, partially or wholly-owned subsidiaries, successors and assigns harmless from and against any and all liability, losses, damages, claims, liens, expenses or causes of action, including, but not limited to, legal fees and expenses that may be incurred by Licensor, arising directly or indirectly out of or in connection with Licensee’s use of the Trade Name or any act or omission to act by Licensee relating to this Agreement, including but not limited to Licensee’s use of the Trade Name and/or content on Licensee’s website(s) linked to, presented in conjunction with or relating to the Trade Name.  Licensor shall provide Licensee with prompt written notice of any claim for which indemnification is sought and shall have the right to participate in the defense of any such claim.


XI.

BINDING EFFECT


This Agreement shall be binding upon, and inure to the benefit of, the successors and assigns, if any, of each party hereto.


XII.

GOVERNING LAW; JURISDICTION


This Agreement shall be subject to and governed by the internal laws of the State of Illinois and the United States of America, including, but not limited to, the Lanham Act (15 U.S.C. §1051 et seq.), without regard to principles of choice of law.  The Parties each agree that all disputes arising hereunder shall be tried in the federal and state courts located in Cook County, State of Illinois, and each party hereby agrees to submit to the exclusive jurisdiction of such courts.


XIII.

COSTS AND ATTORNEYS’ FEES





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As consideration for Licensor granting the license to Licensee, in the event of any litigation or arbitration between the parties hereto with respect to this Agreement, Licensor shall be entitled to payment by Licensee of all its attorneys’ fees and other costs and expenses incurred in resolving such dispute in addition to such other relief to which Licensor may be entitled in law or equity.


XIV.

WAIVER


Either party’s failure to exercise any right under this Agreement shall not constitute a waiver of any other terms or conditions of this Agreement with respect to any other or subsequent breach, nor a waiver by such party of its right at any time thereafter to require exact and strict compliance with the terms of this Agreement.


XV.

INDEPENDENT CONTRACTORS


The parties acknowledge and agree that they are dealing with each other hereunder as independent contractors. Nothing contained in the Agreement shall be interpreted as constituting either party the joint venturer or partner of the other party or as conferring upon either party the power or authority to bind the other party in any transaction with third parties.


XVI.

EQUITABLE RELIEF


Licensee recognizes and acknowledges that a breach by Licensee of this Agreement will cause Licensor irreparable damage which cannot be readily remedied in monetary damages in an action at law, and may, in addition thereto, constitute an infringement of the Trade Name.  In the event of any default or breach by Licensee, Licensor shall be entitled to immediate injunctive relief to prevent such irreparable harm, loss or dilution in addition to any other remedies available. Nothing herein shall limit Licensor’s right to seek monetary damages with respect to a breach.


XVII.

ENTIRE AGREEMENT


This Agreement, including the exhibits and attachments hereto, each of which are hereto incorporated by reference herein, constitutes the entire agreement between the parties and contains all of the terms and conditions of the agreement between the parties with respect to the subject matter hereof.  This Agreement supersedes any and all other agreements, whether oral or written, between the parties hereto with respect to the subject matter hereof.  No change or modification of this Agreement shall be valid unless the same shall be in writing and signed by the parties hereto.


XVIII.

  SEVERABILITY


If any provisions of this Agreement, or the application of any such provisions to parties hereto, shall be held by a court of competent jurisdiction to be unlawful or unenforceable, the remaining provisions of this Agreement shall nevertheless be valid, enforceable and shall remain in full force and effect, and shall not be affected, impaired or invalidated in any manner.


XIX.

HEADINGS


The headings in this Agreement are inserted for convenience only and are not to be considered in the interpretation or construction of the provisions hereof.


XX.

NOTICES




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All notices, requests or demands to be given under this Agreement from one party to the other  (collectively, “Notices”) shall be in writing and shall be given by personal delivery or by overnight courier service for next Business Day delivery (or Saturday delivery, if desired) at the other party’s address set forth below.  Notices given by personal delivery (i.e. by the sending party or a messenger) shall be deemed given on the date of delivery and Notices given by overnight courier shall be deemed given upon deposit with the overnight courier service. If any party’s address is a business, receipt by a receptionist, or by any person in the employ of such party, shall be deemed actual receipt by the party of Notices. The term, Business Day, means any day other than Saturday, Sunday or any other day on which state banks are required or are authorized to be closed in Chicago, Illinois.    Notices may be issued by an attorney for a party and in such case  such Notices shall be deemed given by such party. The parties’ addresses are as follows:


LICENSOR:

LICENSEE:

The Inland Real Estate Group, Inc.

Inland Western Management Corp.

2901 Butterfield Road

2901 Butterfield Road

Oak Brook, Illinois 60523

Oak Brook, Illinois 60523

Attn: Robert H. Baum, General Counsel

Attn:  Thomas P. McGuinness, President


A party’s addresses for notice may be changed from time to time by notice given to the other party in the manner herein provided for giving notice.


XXI.

FURTHER ASSURANCE


Each party to this Agreement agrees to execute and deliver any and all documents, and to perform any and all further acts, that may be reasonably necessary to carry out the provisions of this Agreement and the transactions contemplated hereby.


XXII.

COUNTERPARTS


This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.


XXIII.

  SURVIVAL


The provisions of Articles IB, II, IV, V, VI, VII, VIII, IX, X, XI, XII, XIII, XIV, XVI, and XX will survive any termination of this Agreement.


XXIV.

ASSIGNMENT


Licensor may, in its sole discretion, assign this Agreement to another person or entity. Licensee shall be entitled to assign this Agreement to another person or entity only upon the prior written consent of Licensor, which consent may be withheld in Licensor’s sole discretion.





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WHEREAS, the parties have caused this Agreement to be duly executed as of the date set forth above.



THE INLAND REAL ESTATE GROUP, INC., an Illinois corporation



By: ________________________________

Name: _____________________________

Title: ______________________________


INLAND WESTERN MANAGEMENT CORP., a Delaware corporation



By: ________________________________

Name: ______________________________

Title: ______________________________

































[Signature Page to License Agreement]




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EXHIBIT 10.540


EXECUTION COPY


LICENSE AGREEMENT MODIFICATION


This License Agreement Modification is made this 15 th day of November, 2007 by and between The Inland Real Estate Group, Inc., an Illinois corporation (“Licensor”) and Inland Western Retail Real Estate Trust, Inc., a Corporation, a Maryland corporation (“Licensee”).


RECITALS


WHEREAS, Licensor and Licensee entered into a License Agreement (the “License”) dated as of March 5, 2003 in which Licensor licensed to Licensee, on a non-exclusive basis, among other things, the logo which is attached as Exhibit A (the “Green Ball Logo”) and the name Inland Western Retail Real Estate Trust, Inc. (the “IWRRETI Name”);


WHEREAS, the Licensee has requested that it be allowed to exclusively use the Green Ball Logo and IWRRETI Name;


WHEREAS, Licensor is willing to exclusively license the Green Ball Logo and IWRRETI Name to Licensee subject to the rights of Licensor and its affiliates to use the Green Ball Logo and IWRRETI Name in general marketing and communication relating to The Inland Real Estate Group of Companies, Inc.;


NOW, THEREFORE, in consideration of the mutual promises and obligations set forth below, the parties, intending to be bound, agree to the foregoing and as follows:

Licensor and Licensee agree to modify the License to grant Licensee an exclusive license to use the Green Ball Logo and IWRRETI Name subject to the rights of Licensor and its affiliates to use the Green Ball Logo and IWRRETI Name in general marketing and communication relating to The Inland Real Estate Group of Companies, Inc.



Licensor:

The Inland Real Estate Group, Inc., an Illinois corporation



By:_____________________________

Its:_____________________________

 

Licensee:

Inland Western Retail Real Estate Trust, Inc., a Maryland corporation



By:_____________________________

Its:_____________________________




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Exhibit 10.541

LOAN SERVICES AGREEMENT

This Loan Services Agreement (this “Agreement”), dated as of January 1, 2004 (the “Effective Date”), is entered into by and between INLAND MORTGAGE SERVICING CORPORATION, an Illinois corporation (“Service Provider”) and INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC., an Illinois corporation (the “Business Manager”).

RECITALS

WHEREAS, Service Provider is in the business of providing certain loan payable services, including without limitation, the loan payable services described and set forth in Exhibit A hereto (collectively, the “Services”); and

WHEREAS, the Business Manager is desirous of retaining Service Provider to perform the Services for the Business Manager in connection with the Real Estate Business (as defined herein) for the benefit of REIT (as defined herein) and/or its Affiliates (as defined herein), and Service Provider is willing to perform the Services, subject to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and obligations set forth below, the parties hereto, intending to be legally bound, agree to the foregoing and as follows:

ARTICLE I
DEFINITIONS

“Affiliate” shall mean, except as otherwise provided herein, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meaning, the terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of that Person through the ownership of voting securities, by contract or otherwise. With respect to the Business Manager, any entity representing a joint venture or similar arrangement in which the Business Manager, or an entity controlled by the Business Manager, is the general partner or managing member shall be deemed to be an “Affiliate” of the Business Manager.

“Business Management Agreement” shall mean that certain Advisory Agreement, dated as of September 18, 2003, as amended from time to time, between the Business Manager and REIT.

“Person” shall mean an individual, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Real Estate Business” shall mean (i) any business activities conducted by REIT so long as REIT remains qualified as a “real estate investment trust” under Section 856 the Internal Revenue Code of 1986, as emended, and (ii) any business that is consistent with and limited to the description of the business of REIT contained in the prospectus forming a part of the Registration Statement on Form S-11 (No. 333-122743), as amended, filed by REIT with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended.

“REIT” shall mean Inland Western Retail Real Estate Trust, Inc., a Maryland corporation.



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ARTICLE II
PERFORMANCE OF SERVICES

2.1 Service Provider agrees to perform the Services for the Business Manager in connection with the Real Estate Business of the REIT and/or its or their Affiliates. Service Provider shall perform and provide the Services in a professional manner and in accordance with all laws, statutes, ordinances, codes, rules and regulations applicable to the Services. Service Provider, at Business Manager’s cost, may employ, contract with or use the service of any third party in connection with the performance of the Services as the Service Provider deems reasonably necessary or desirable, including independent, outside counsel.

2.2 The Business Manager and Service Provider acknowledge that the relationship created hereby is on an exclusive basis as to Business Manager such that during the Initial Services Term and any Additional Services Term (except during any period that Service Provider is in default hereunder), (x) the Business Manager shall be required to retain only the Service Provider to perform all of the Services or any individual Service, (y) the Business Manager shall not be permitted to retain third parties to perform for the Business Manager services the same as or similar to the Services or any individual Service, but that in any event Service Provider shall be permitted to perform the Services or any individual Service for any other parties.

ARTICLE III
TERM AND TERMINATION

3.1 Subject to the termination provisions set forth in this Article III , this Agreement shall continue for an initial period of four (4) years from the Effective Date (“Initial Services Term) and shall be automatically renewed for consecutive three (3) year terms thereafter (each an “Additional Services Term”) unless earlier terminated as hereafter provided.

3.2 At any time during the Initial Services Term or at any time during an Additional Services Term, the Business Manager may terminate this Agreement for cause (i.e., a material default by Service Provider hereunder) upon ten (10) days’ prior written notice to Service Provider; provided, however, that prior to exercising its rights under this Section 3.2. the Business Manager shall notify Service Provider of any default, and Service Provider shall have thirty (30) days after receipt of the notice to cure the default to the Business Manager’s reasonable satisfaction. As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for the Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.

3.3 At any time during the Initial Services Term or during an Additional Services Term, the Business Manager shall have the right to terminate this Agreement, without cause, by providing not less than sixty (60) days’ prior written notice to Service Provider of any election to so terminate and specifying the effective date of such termination; provided, however, in such event, Service Provider shall be entitled to and shall be paid a termination fee equal to the product of: (a) the average monthly compensation, set forth on Exhibit A, for the six (6) months immediately preceding the month in which the Service Provider is served the termination notice from the Business Manager, multiplied by (b) six (6) (“Termination Fee”). The Termination Fee shall be paid on the effective date of such termination with a credit to Business Manager for compensation paid to Service Provider for the period from the date of Service Provider’s receipt of the termination notice to and including the effective date of such termination.

3.4 Provided that Service Provider is not providing or is terminating such Services to all other clients of Service Provider, and no affiliate of Service Provider is providing or is undertaking to provide such Services, Service Provider, at any time during the Initial Services Term or during an Additional



2




Services Term, may elect to limit one or more of the Services it is providing to the Business Manager upon not less than sixty (60) days’ prior written notice to the Business Manager, specifying the effective date such Services shall no longer be performed and describing in reasonable detail the Services to be terminated. As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.

3.5 If at any time during the Initial Services Term or any Additional Services Term the REIT has had a Change of Control, as hereinafter defined, Service Provider shall have the right to terminate this Agreement, without cause, upon written notice to Business Manager. At any time during the Initial Services Term or any Additional Services Term, and the REIT has not had a Change of Control, Service Provider shall have the right to terminate this Agreement, without cause, by providing not less than one hundred eighty (180) days’ prior written notice to the Business Manager, specifying the effective date of such termination. The foregoing notwithstanding, Service Provider, upon ten (10) days’ prior written notice to the Business Manager, may terminate this Agreement or decline to provide a particular Service hereunder upon the occurrence of any of the following events:

(a) The Business Manager fails, in the absence of a bona fide dispute with respect to any payment, to make payment for Services on its due date; provided, however, the Business Manager may cure the breach up to three (3) times per calendar year by making payment within ten (10) days of the Business Manager’s receipt of written notice that it failed to make the payment when due;

(b) The Business Manager requests that Service Provider provide Services that in the Service Provider’s opinion would violate any applicable law or the rules of any regulatory body with jurisdiction and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid opinion;

(c) The Business Manager requests that Service Provider take any action that in the Service Provider’s opinion would result in the commission of a fraud upon any person or party and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid opinion;

(d) The Business Manager requests that Service Provider take any action that, upon the advice of counsel to Service Provider, could subject Service Provider to liability or material damages in civil litigation and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid advice of counsel; or

(e) The Business Manager requests that Service Provider provide Services that upon advice of counsel to Service Provider would cause Service Provider or any of its employees to be in violation of its professional code of ethics or other ethical standards the Service Provider or any of its employees is subject to and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s counsel’s advice.

As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.

3.6 Upon any termination of this Agreement or cessation of Services arising under Sections 3.2 or 3.4 of this Agreement, during the Initial Services Term or any Additional Services Term, Service Provider shall provide the Business Manager with a reasonable opportunity to transition any terminated Services to any replacement provider(s) designated by the Business Manager (“Replacement Provider”), which period shall not be more than sixty (60) days from the date of termination of this Agreement or specified terminated Services (the “Transition Period”). During the Transition Period, Service Provider shall use reasonable efforts to avoid causing any unnecessary interruption of the terminated Services so as to



3




provide a smooth transition of such Services (the “Transition”). All services related to Transition shall be deemed Services and subject to the charges and fees set forth in Exhibit A attached hereto.

3.7 For the purposes hereof, the term “Change of Control” shall mean the occurrence of any one or more of the following:

(a)

Any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the REIT to any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended; provided, however, that any sale, lease, exchange or transfer to (including, without limitation, any merger or other business combination with or into) any of the following shall not constitute a Change of Control: (i) any affiliate controlled by the REIT, (ii) Inland Real Estate Corporation, (iii) Inland American Real Estate Trust, Inc., (iv) The Inland Group, Inc., or (v) any affiliate controlled by any of the entities listed in clauses (i) through (iv) above (all of the entities described in clauses (i) through (v) above are hereinafter sometimes referred to as the “Inland Companies”;

(b)

The approval by the holders of the outstanding shares of the REIT of any plan or proposal for the liquidation or dissolution of the REIT; or

(c)

Any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (other than any one or more of the Inland Companies) shall become the owner, directly or indirectly, beneficially or of record, of shares of the REIT representing more than twenty-five percent (25%) of the aggregate ordinary voting power represented by the issued and outstanding common shares of the REIT.

ARTICLE IV
INTERNAL CONTROL PROCEDURES

As a public entity, REIT is required to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as may be amended from time to time (“Section 404”). Notwithstanding anything to the contrary contained in this Agreement (including, without limitation. Article III and Section 8.4 hereof), if the Business Manager shall determine that, to provide services to and for the benefit of the Business Manager and REIT, Service Provider must comply with the requirements of Section 404, then the Business Manager and Service Provider shall develop and implement an internal control plan or other processes and procedures (or amend and revise any existing internal control plan, processes and procedures) to comply with the requirements (collectively, the “Internal Control Plan”). Once developed and implemented, Service Provider shall use its reasonable best efforts to have its internal controls comply in all respects with the requirements of Section 404. The cost and expense of development and initial implementation of any Internal Control Plan shall be borne by all clients of Service Provider that require Service Provider to comply with Section 404. Upon determination that an Internal Control Plan must be developed and implemented, Service Provider, the Business Manager and all other clients of Service Provider requiring Service Provider to comply with Section 404 shall, in good faith, negotiate an equitable allocation of the costs and expenses of the development and implementation of the Internal Control Plan between and among the parties. The foregoing provisions regarding payment and allocation of the costs and expenses of development and implementation of any Internal Control Plan shall not apply to any Internal Control Plan developed and implemented, or in the process of being developed and implemented, on or prior to the date of this Agreement.

ARTICLE V
PAYMENT

Service Provider shall invoice the Business Manager monthly (or any other basis as reasonably agreed to by the Business Manager) for any Services performed during the immediately preceding



4




calendar month (or any other period agreed to by the Business Manager). Payment shall be due thirty (30) days after the date of the Business Manager’s receipt of the same and shall be as provided in Section 2 of Exhibit A attached hereto. The compensation to be paid by the Business Manager under this Article V and Section 2 of Exhibit A attached hereto shall constitute full and complete payment for any and all services rendered and performed by Service Provider under and pursuant to this Agreement, which compensation includes any and all labor, costs and expenses incurred or to be included by Service Provider in connection with its performance of the Services.

RIGHT TO AUDIT

Service Provider shall keep and make available for the examination and audit of or by the Business Manager, or the Business Manager’s authorized employees, agents or representatives during normal business hours, and upon reasonable notice, at the Business Manager’s cost, all data, materials and information, including but not limited to records of all receipts, costs and disbursements made by Service Provider with respect to the Services, all books, accounts, memoranda, files and all or any other documents indicating, documenting, verifying or substantiating the cost and appropriateness of any and all costs, expenditures and receipts relating to the Services. Service Provider shall allow the Business Manager (and any of the Business Manager’s employees, representatives, accountants and auditors) reasonable access to personnel, representatives and employees of Service Provider and all books and records and other business records and files of Service Provider that are reasonably required by the Business Manager for audit and tax matters.

ARTICLE VI
CONFIDENTIALITY

6.1 During the term of this Agreement, the parties may communicate to each other certain confidential information to enable Service Provider to perform the services hereunder, and/or Service Provider may develop confidential information for the Business Manager. Each party agrees:

(a)

to treat, and to cause its employees, agents, subcontractors and representatives, if any, to treat as secret and confidential, all confidential information; and

(b)

except as necessary in the performance of the Services, not to disclose any confidential information or make available any reports, recommendations and/or conclusions which Service Provider may make for the Business Manager to any person, firm or corporation without first obtaining the Business Manager’s written approval.

6.2 If any party learns that disclosure of confidential information is sought in or by a court or governmental body of competent jurisdiction or through other means, the party shall:

(a)

give prompt notice to the other party prior to making the disclosure and allow the other party, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, confidential information;

(b)

reasonably cooperate with the other party in its efforts to prevent, or obtain a protective order for disclosure; and

(c)

disclose the minimum amount of information required to be disclosed.

ARTICLE VII
MISCELLANEOUS

7.1 Binding Effect . This Agreement shall be binding upon, and inure to the benefit of, the successors and assigns, if any, of each party hereto. Business Manager hereby represents and warrants to



5




Service Provider that this Agreement and the terms hereof have been approved by all necessary corporate authority of the REIT and is in compliance with all regulatory requirements to which the REIT is subject.

7.2 Governing Law: Jurisdiction . This Agreement shall be subject to and governed by the internal laws of the State of Illinois without regard to principles of choice of law. The parties hereto each agree that all disputes arising hereunder shall be tried in the federal and state courts located in Cook County or DuPage County, State of Illinois, and each party hereby agrees to submit to the exclusive jurisdiction of those courts.

7.3 Waiver . Either party’s failure to exercise any right under this Agreement shall neither constitute a waiver of any other terms or conditions of this Agreement with respect to any other or subsequent breach, nor a waiver by that party of its right at any time thereafter to require exact and strict compliance with the terms of this Agreement.

7.4 Independent Contractors . The parties acknowledge and agree that they are dealing with each other hereunder as independent contractors. Nothing contained in the Agreement shall be interpreted as constituting either party to be the joint venturer or partner of the other party or as conferring upon either party the power or authority to bind the other party in any transaction with third parties.

7.5 Equitable Relief and Monetary Damages . Each party hereto recognizes and acknowledges that a breach by the other party to this Agreement will cause irreparable damage to the non-breaching party that cannot be readily remedied in monetary damages in an action at law. In the event of any default or breach by either party, the non-breaching party shall be entitled to seek immediate injunctive relief to prevent irreparable harm, loss or dilution in addition to any other remedies available. Nothing herein shall limit a non-breaching party’s right to seek monetary damages with respect to a breach.

7.6 Entire Agreement . This Agreement, including the exhibits hereto, constitutes the entire agreement between the parties and contains all of the terms and conditions of the agreement between the parties with respect to the subject matter hereof. This Agreement supersedes any and all other agreements, whether oral or written, between the parties hereto, including any Affiliates of Service Provider, with respect to the subject matter hereof. No change or modification of this Agreement shall be valid unless the same shall be in writing and signed by the parties hereto.

7.7 Severability . If any provisions of this Agreement, or the application of any such provisions to parties hereto, shall be held by a court of competent jurisdiction to be unlawful or unenforceable, the remaining provisions of this Agreement shall nevertheless be valid, enforceable and shall remain in full force and effect, and shall not be affected, impaired or invalidated in any manner.

7.8 Headings . The headings in this Agreement are inserted for convenience only and are not to be considered in the interpretation or construction of the provisions hereof.

7.9 Notices . All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given or delivered:

(a)

when delivered personally or by commercial messenger;

(b)

one (1) business day following deposit with a recognized overnight courier service, provided the deposit occurs prior to the deadline imposed by the overnight courier service for overnight delivery; or

(c)

when transmitted, if sent by facsimile copy, provided confirmation of receipt is received by sender and such notice is sent by an additional method provided hereunder;

in each case above provided the notice or other communication is addressed to the intended recipient thereof as set forth below:




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If to Service Provider, to:

Inland Mortgage Servicing Corporation
2901 Butterfield Road
Oak Brook, IL 60523
Attention: Frances C. Panico
Facsimile: (630)218-5278

 

 

If to the Business Manager, to:

Inland Western Retail Real Estate Advisory Services, Inc.
2901 Butterfield Road
Oak Brook, IL 60523
Attention: Roberta S. Matlin
Facsimile: (630) 218-4955

A party’s address for notice may be changed from time to time by notice given to the other party in the manner herein provided for giving notice.

7.10 Further Assurance . Each party to this Agreement agrees to execute and deliver any and all documents, and to perform any and all further acts that may be reasonably necessary to carry out the provisions of this Agreement and the transactions contemplated hereby.

7.11 Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

7.12 Assignment . The Business Manager shall not assign this Agreement without the prior express written consent of the Service Provider; provided, however, if the REIT shall acquire or consolidate its business with the Business Manager, this Agreement shall be and be deemed assigned by the Business Manager to the REIT with the REIT assuming all of the obligations of Business Manager under the terms of this Agreement effective the date of such acquisition or consolidation. Service Provider shall not assign this Agreement without the prior express written consent of the Business Manager.

8.13 Fidelity Insurance . Service Provider currently maintains and shall continue to maintain during the term hereof, fidelity and errors and omissions insurance in commercially reasonable amounts and with recognized insurance carriers.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

THE BUSINESS MANAGER:

 

SERVICE PROVIDER:

 

 

 

 

 

INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC, an Illinois corporation

 

INLAND MORTGAGE SERVICING CORPORATION, an Illinois corporation

By: 


/s/ Brenda Gail Gujral

 

By: 


/s/ Frances C. Panico

Name: 

Brenda Gail Gujral

 

Name: 

Frances C. Panico

Its: 

Vice President

 

Its: 

President




7




EXHIBIT A

1. Services : The Services to be provided under this Agreement shall be provided as and when requested by the Business Manager, or any authorized agent of the Business Manager. Service Provider agrees to provide the following loan payable services on the following conditions:

A.

No Service Provider Advances . Service Provider’s duties shall include remitting principal and interest payments, tax and insurance deposits, and other deposits and reserves as may be required for payment under REIT loans from funds first deposited with Service Provider as hereinafter required. Service Provider is and shall be under no obligation whatsoever to advance any of its own funds for or on behalf of REIT to any lender of REIT. Any default occurring under any REIT loans resulting from REIT not timely depositing required funds with Service Provider as hereinafter provided shall be and be deemed a default caused by REIT and not by Service Provider and Service Provider shall have no liability to REIT as a result of such default.

B.

REIT’s Deposits .

(i)

As to each loan, upon receipt of the note and other loan documents evidencing regular payments due a lender, Service Provider will notify the REIT or its designated managing agent of the required regular payments for principal and interest, tax and insurance escrow deposits, and any other payments due for the loan (“Loan Payment Schedule”). As and when Service Provider is notified of a change in required loan payments by the lender, Service Provider will promptly notify REIT of the change. As to variable interest rate loans, Service Provider shall promptly notify REIT, or its designee, of the changes.

(ii)

Not later than seven (7) business days prior to the date a loan payment is due, the REIT or its designee shall remit to Service Provider the full amount of such payment as set forth on the Loan Payment Schedule. Service Provider will be under no obligation to make any loan payment in less than the full amount due and, accordingly, REIT’s failure to provide the amount of funds due under the Loan Payment Schedule will not require Service Provider to make any partial payment or allocate principal, interest or deposits among funds received from the REIT in mitigation of any charges that may accrue to REIT for less than a full payment being made to a lender; provided, however if there are sufficient funds available in the Reserve, hereinafter defined, Service Provider will, and is hereby authorized by REIT, to withdraw from the Reserve funds necessary to effect full payment to the lender.

(iii)

Funds deposited by REIT with Service Provider for loan payments shall be deposited in one or more accounts maintained by Service Provider for the benefit of REIT in either national or state banks. Such accounts shall be interest bearing and interest earned shall be paid to the REIT upon request. Within three (3) business days after  the date hereof, REIT shall deposit with Service Provider an adequate reserve (“Reserve”) which shall be maintained as a reserve account to cover any late or short REIT deposits given to Service Provider so that Service Provider may timely make loan payments due. REIT shall promptly increase the Reserve as needed. All such accounts shall be deemed trust accounts maintained for the benefit of REIT and shall not be deemed established or maintained for the benefit of Service Provider nor shall the funds therein be or be deemed the funds of Service Provider.

C.

Loan Payments . Provided that REIT has made its required deposits or that there are sufficient funds within the Reserve, Service Provider, on behalf of REIT and from REIT funds on deposit with Service Provider, shall timely make loan payments for each loan as set forth on



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the Loan Payment Schedules. Upon request of REIT and upon receipt of the deposits therefor, Service Provider shall make any additional payments as may be required to be made to the lender, such as insurance or condemnation proceeds.

D.

Accounting Statements .

(i)

Service Provider shall keep a complete and accurate account of, and apply in accordance with the terms of the loans being serviced, all sums collected by Service Provider from the REIT or its designee on account of each loan as allocated for principal, interest tax and insurance escrow deposits and other payments or deposits.

(ii)

Service Provider shall submit to the REIT at least quarterly an accounting of the balances of the deposits held on behalf of the REIT in each account, together with a statement evidencing that all disbursements made on behalf of the REIT, and all payments required to be made hereunder, have been made, with exceptions, if any, disclosed.

(iii)

Upon the REIT’s request and following reasonable notice, Service Provider shall furnish a statement of its financial condition, and shall give the REIT or its authorized representatives opportunity at any reasonable time during business hours to examine and make copies of Service Provider’s books and records as same relate to the loans and other matters which are the subject of this Agreement.

E.

Additional Service Provider Duties . Provided the same are timely given to Service Provider, Service Provider will timely forward financial statements of the REIT, operating statements of its real properties and other reports to lenders. Service Provider shall forward to REIT requests for information received from lenders, provided, however. Service Provider shall be under no obligation to furnish any requested information except as it applies to loan payments made by Service Provider on behalf of the REIT as herein provided. Service Provider will forward to REIT other notices it may receive from lenders pertaining to loans being serviced by Service Provider, but shall have no liability for late or non-receipt of such notices by REIT. Service Provider will exercise commercially reasonable efforts to deal with assertions by lenders of non- receipt or late receipt of loan payments that are or were to be remitted to lender by Service Provider. Service Provider will not be responsible for any late payment charges or default interest payments except in the event Service Provider was negligent in timely effecting loan payments when sufficient funds from the REIT were on deposit with the Service Provider or miscalculated the amount of a payment due and paid the lender less than the amount due for a payment (unless otherwise directed by REIT).

F.

Loan Modifications/Prepayments/Final Payments . Service Provider will not be responsible for effecting modifications, amendments or other changes to loan agreements. These activities shall remain the responsibility of REIT and the REIT shall promptly notify Service Provider of any loan modifications, providing Service Provider with complete document copies thereof. Service Provider shall have no liability for loan payments not made in accordance with loan modifications not timely given to Service Provider. Upon timely receipt of funds therefor, including prepayment premiums and penalties, and accrued interest, Service Provider shall remit prepayments to lenders. REIT shall promptly inform Service Provider of any loan prepayments made by REIT not through Service Provider. As to loan payoffs and final loan payments, Service Provider will examine lender payoff statements, discuss amounts due thereunder and determination of prepayment premiums with the REIT, and use commercially reasonable efforts to resolve discrepancies therein with lenders. Service Provider will not be liable for its inability to resolve such disputes and REIT will remain liable for the payment of any disputed funds due. Service Provider will promptly remit to



9




REIT tax, insurance, reserve or other deposits returned to Service Provider by lenders whose loans have been paid off and will request the return of loan documents and required releases.

2.

Compensation : In consideration of the services rendered by Service Provider under the terms of this Agreement, Service Provider shall be entitled to a monthly fee for each month during the term of this Agreement calculated as follows: The sum of the outstanding principal balance of all of the loans being serviced by Service Provider plus the amount of accrued and unpaid interest of all of the loans being serviced by Service Provider on the last day of preceding month shall be first determined (“Compensation Base”). The first one billion dollars (£1,000,000,000) of the Compensation Base shall be multiplied by .03% and the remaining balance of the Compensation Base, if any shall be multiplied by .01%. The sum of the foregoing products shall be divided by 12 and the quotient shall be the monthly fee due. Service Provider shall make the foregoing calculations and bill REIT accordingly. The monthly fee due shall be paid by REIT to Service Provider within two (2) days after receipt of each billing. All monthly compensation shall be deemed fully earned on the first day of each month. There shall be no proration of monthly compensation in the event this Agreement is terminated on any day other than the last day of a month.





10


Exhibit 10.8

FIRST AMENDMENT TO LOAN SERVICES AGREEMENT

This First Amendment to that certain Loan Services Agreement dated as of January 1, 2004 (“Services Agreement”) made between INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC, (“Business Manager”) a Maryland corporation and INLAND MORTGAGE SERVICING CORPORATION (“Service Provider”), an Illinois corporation, is made as of May 1, 2005.

RECITAL

Business Manager and Service Provider desire to amend the Compensation paid to Service Provider by providing for a monthly per loan charge in lieu of a percentage charge.

NOW THEREFORE, in consideration of the agreements to be made herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

1. The Recital set forth above is hereby incorporated herein by reference.

2. Effective as of May 1, 2005, Paragraph 2 of Exhibit A to the Agreement is hereby deleted in its entirety and in lieu thereof the following is inserted:

“2. Compensation : In consideration of the services rendered by Service Provider under the terms of this Agreement, Service Provider shall be entitled to a monthly fee for each month during the term of this Agreement calculated as follows: $190.00 per loan serviced per month. The monthly fee due shall be paid by the REIT to Service Provider within two (2) days after receipt of each billing. All monthly compensation shall be deemed fully earned on the first day of each month. There shall be no proration of monthly compensation in the event this Agreement is terminated on any day other than the last day of a month.”

In all other respects the Services Agreement remains in full force and effect.

 

 

 

 

INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC.

 

 

 

By: 


/s/ Brenda Gail Gujral

 

 

 

Its: 

Vice President


 

 

 

INLAND MORTGAGE SERVICING CORPORATION

 

 

 

By: 


/s/ Frances C. Panico

 

 

 

Its: 

President





1


Exhibit 10.543

SECOND AMENDMENT TO LOAN SERVICES AGREEMENT

This Second Amendment to that certain Loan Services Agreement dated as of January 1, 2004 (“Services Agreement”) made between INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC., (“Business Manager”) a Maryland corporation and INLAND MORTGAGE SERVICING CORPORATION (“Service Provider”), an Illinois corporation, is made as of May 1, 2005.

RECITAL

Business Manager and Service Provider desire to amend the Compensation paid to Service Provider to reduce the monthly per loan charge.

NOW THEREFORE, in consideration of the agreements to be made herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

1. The Recital set forth above is hereby incorporated herein by reference.

2. Effective as of April 1, 2006, the following words are hereby added to the end of the first sentence of Paragraph 2 of Exhibit A to the Agreement: “; provided that if Service Provider is servicing 100 or more loans for the REIT in a month, the monthly fee for such month shall be $150 per loan serviced in such month.”

In all other respects the Services Agreement remains in full force and effect.


 

 

 

INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC.

 

 

 

By: 


/s/ Brenda Gail Gujral

 

 

 

Its: 

Vice President


 

 

 

INLAND MORTGAGE SERVICING CORPORATION

 

 

 

By: 


/s/ Frances C. Panico

 

 

 

Its: 

President





EXHIBIT 10.544

EXECUTION COPY

AMENDMENT TO LOAN SERVICES AGREEMENT

This Amendment to that certain Loan Services Agreement dated as of January 1, 2004, as amended,("Services Agreement") made between INLAND MORTGAGE SERVICING CORPORATION  ("Service Provider"), an Illinois corporation, and  INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC. ("Business Manager"), an Illinois corporation, is made as of November 15, 2007 by the parties to the Services Agreement.

In consideration of the agreements to be made herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

1.

Section 2.2 of the Services Agreement is hereby deleted in its entirety and in lieu thereof the following is inserted:

"2.2  The Business Manager and Service Provider acknowledge that the relationship created hereby is on a non-exclusive basis such that during the Initial Services Term and any Additional Services Term, the Business Manager is permitted to retain third parties to perform the same or similar Services for any loan that has not been placed with the Service Provider to service, or to have the REIT perform such services; and that Service Provider shall be permitted to perform the Services or any individual Service for any other parties. Once a loan has been placed with the Service Provider, it cannot be withdrawn unless this Agreement has been terminated as hereinafter provided."

2.

Section 3.3 of the Services Agreement is hereby deleted in its entirety and in lieu thereof the following is inserted:

"3.3 At any time during the Initial Services Term or during an Additional Services Term, the Business Manager, or the successor to the REIT if a Change of Control has occurred, shall have the right to terminate this Agreement, without cause, by providing not less than one hundred eighty (180) days’ prior written notice to Service Provider of any election to so terminate and specifying the effective date of such termination; provided, however:

(a)  In the event Business Manager is terminating this Agreement for the purpose of either (i) having the REIT service all of the loans covered by this Agreement in house or (ii) having all of the loans covered by this Agreement serviced by another loan servicer, but in either case of (i) or (ii) not in connection with a Change of Control of the REIT, then in such event, Service Provider will initiate the transfer of the loans to the entity designated by the Business Manager in the termination notice. Until the effective date of termination, the Service Provider shall continue to be paid monthly compensation in an amount equal to the total monthly compensation on the date the termination notice is served until and through the month of the effective termination date stated in the termination notice. In the event that any lender does not complete the transfer of any loan until after the effective date of termination, the Service Provider will be paid a monthly fee of $250.00 on each loan until the transfer of the loan has been completed;



1



(b)  In the event of a Change of Control of the REIT, the entity assuming control of the REIT may terminate this Agreement after the Change of Control is complete by giving the Service Provider not less than one hundred eighty (180) days’ notice of the effective date of the termination. In such event, Service Provider will initiate the transfer of the loans to the entity designated in the termination notice. Thereafter, until the effective date of termination, the Service Provider shall be paid monthly compensation in an amount equal to the total number of loans being serviced on the date the termination notice was given to the Service Provider  multiplied by $250.00 until and through the month of the effective termination date stated in the termination notice, to cover the increased costs involved in the transfer and the underwriting of the entity assuming control of the REIT. For any loans not transferred by the effective date of termination, the Service Provider will be paid a monthly fee of $250.00 on each loan until the transfer of the loan has been completed;

The terms of this Section 3.3 shall control over any conflicting terms of Section 2 of Exhibit A attached hereto."

3.

Section 3.4 of the Services Agreement is hereby amended by deleting the words "sixty (60)" set forth therein and in lieu thereof inserting the words "thirty (30)".

4.

Section 3.5 of the Services Agreement is hereby amended by deleting the first sentence thereof in its entirety and in lieu thereof the following is inserted:

"If at any time during the Initial Services Term or any Additional Services

 Term the REIT has had a Change of Control, as hereinafter defined, Service Provider shall have the right to terminate this Agreement, without cause, upon not less than thirty (30) days prior written notice to Business Manager."

In all other respects the Services Agreement remains in full force and effect.

INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC.  

By:

Its:             

INLAND MORTGAGE SERVICING CORPORATION

By:

Its:             








2




























[ Signature Page to Amendment to Loan Services Agreement]

Endnotes





3





Exhibit 10.545

MORTGAGE BROKERAGE SERVICES AGREEMENT

This Mortgage Brokerage Services Agreement (this “Agreement”), dated as of January 1, 2004 (the “Effective Date”), is entered into by and between INLAND MORTGAGE INVESTMENT CORPORATION, an Illinois corporation (“Service Provider”) and INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC., an Illinois corporation (the “Business Manager”).

RECITALS

WHEREAS, Service Provider is in the business of providing certain mortgage brokerage services, including without limitation, the mortgage brokerage services described and set forth in Exhibit A hereto (collectively, the “Services”); and

WHEREAS, the Business Manager is desirous of retaining Service Provider to perform the Services for the Business Manager in connection with the Real Estate Business (as defined herein) for the benefit of REIT (as defined herein) and/or its Affiliates (as defined herein), and Service Provider is willing to perform the Services, subject to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and obligations set forth below, the parties hereto, intending to be legally bound, agree to the foregoing and as follows:

ARTICLE I
DEFINITIONS

“Affiliate” shall mean, except as otherwise provided herein, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meaning, the terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of that Person through the ownership of voting securities, by contract or otherwise. With respect to the Business Manager, any entity representing a joint venture or similar arrangement in which the Business Manager, or an entity controlled by the Business Manager, is the general partner or managing member shall be deemed to be an “Affiliate” of the Business Manager.

“Business Management Agreement” shall mean that certain Advisory Agreement, dated as of September 18, 2003, as amended from time to time, between the Business Manager and REIT.

“Person” shall mean an individual, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Real Estate Business” shall mean (i) any business activities conducted by REIT so long as REIT remains qualified as a “real estate investment trust” under Section 856 the Internal Revenue Code of 1986, as amended, and (ii) any business that is consistent with and limited to the description of the business of REIT contained in the prospectus forming a part of the Registration Statement on Form S-11 (No. 333-122743), as amended, filed by REIT with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended.

“REIT” shall mean Inland Western Retail Real Estate Trust, Inc., a Maryland corporation.



11




ARTICLE II
PERFORMANCE OF SERVICES

2.1 Service Provider agrees to perform the Services for the Business Manager in connection with the Real Estate Business of the REIT and/or its or their Affiliates. Service Provider shall perform and provide the Services in a professional manner and in accordance with all laws, statutes, ordinances, codes, rules and regulations applicable to the Services. Service Provider, at Business Manger’s cost, may employ, contract with or use the service of any third party in connection with the performance of the Services as the Service Provider deems reasonably necessary or desirable, including independent, outside counsel.

2.2 The Business Manager and Service Provider acknowledge that the relationship created hereby is on an exclusive basis as to Business Manager such that during the Initial Services Term and any Additional Services Term (except during any period that Service Provider is in default hereunder), (x) the Business Manager shall be required to retain only the Service Provider to perform all of the Services or any individual Service, (y) the Business Manager shall not be permitted to retain third parties to perform for the Business Manager services the same as or similar to the Services or any individual Service, but that in any event Service Provider shall be permitted to perform the Services or any individual Service for any other parties.

ARTICLE III
TERM AND TERMINATION

3.1 Subject to the termination provisions set forth in this Article III , this Agreement shall continue for an initial period of four (4) years from the Effective Date (“Initial Services Term) and shall be automatically renewed for consecutive three (3) year terms thereafter (each an “Additional Services Term”) unless earlier terminated as hereafter provided.

3.2 At any time during the Initial Services Term or at any time during an Additional Services Term, the Business Manager may terminate this Agreement for cause ( i.e. , a material default by Service Provider hereunder) upon ten (10) days’ prior written notice to Service Provider; provided, however, that prior to exercising its rights under this Section 3.2, the Business Manager shall notify Service Provider of any default, and Service Provider shall have thirty (30) days after receipt of the notice to cure the default to the Business Manager’s reasonable satisfaction. As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for the Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.

3.3 At any time during the Initial Services Term or during an Additional Services Term, the Business Manager shall have the right to terminate this Agreement without cause, by providing not less than sixty (60) days’ prior written notice to Service Provider of any election to so terminate and specifying the effective date of such termination,

3.4 Provided that Service Provider is not providing or is terminating such Services to all other clients of Service Provider, and no affiliate of Service Provider is providing or is undertaking to provide such Services, Service Provider, at any time during the Initial Services Term or during an Additional Services Term, may elect to limit one or more of the Services it is providing to the Business Manager upon not less than sixty (60) days’ prior written notice to the Business Manager, specifying the effective date such Services shall no longer be performed and describing in reasonable detail the Services to be terminated. As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.



12




3.5 If at any time during the Initial Services Term or any Additional Services Term the REIT has had a Change of Control, as hereinafter defined, Service Provider shall have the right to terminate this Agreement, without cause, upon written notice to Business Manager. At any time during the Initial Services Term or any Additional Services Term, and the REIT has not had a Change of Control, Service Provider shall have the right to terminate this Agreement, without cause, by providing not less than one hundred eighty (180) days’ prior written notice to the Business Manager, specifying the effective date of such termination. The foregoing notwithstanding, Service Provider, upon ten (10) days’ prior written notice to the Business Manager, may terminate this Agreement, or decline to provide a particular Service hereunder upon the occurrence of any of the following events:

(a) The Business Manager fails, in the absence of a bona fide dispute with respect to any payment, to make payment for Services on its due date; provided, however, the Business Manager may cure the breach up to three (3) times per calendar year by making payment within ten (10) days of the Business Manager’s receipt of written notice that it failed to make the payment when due;

(b) The Business Manager requests that Service Provider provide Services that in the Service Provider’s opinion would violate any applicable law or the rules of any regulatory body with jurisdiction and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid opinion;

(c) The Business Manager requests that Service Provider take any action that in the Service Provider’s opinion would result in the commission of a fraud upon any person or party and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid opinion;

(d) The Business Manager requests that Service Provider take any action that, upon the advice of counsel to Service Provider, could subject Service Provider to liability or material damages in civil litigation and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid advice of counsel; or

(e) The Business Manager requests that Service Provider provide Services that upon advice of counsel to Service Provider would cause Service Provider or any of its employees to be in violation of its professional code of ethics or other ethical standards the Service Provider or any of its employees is subject to and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s counsel’s advice.

(f) That Business Manager requests that Service Provider provide, in Service Provider’s opinion, services outside the scope of this Agreement.

As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.

3.6 Upon any termination of this Agreement or cessation of Services arising under Sections 3.2 or 3.4 of this Agreement, during the Initial Services Term or any Additional Services Term, Service Provider shall provide the Business Manager with a reasonable opportunity to transition any terminated Services to any replacement provider(s) designated by the Business Manager (“Replacement Provider”), which period shall not be more than sixty (60) days from the date of termination of this Agreement or specified terminated Services (the “Transition Period”). During the Transition Period, Service Provider shall use reasonable efforts to avoid causing any unnecessary interruption of the terminated Services so as to provide a smooth transition of such Services (the “Transition”). All services related to Transition shall be deemed Services and subject to the charges and fees set forth in Exhibit A attached hereto.

3.7 For the purposes hereof, the term “Change of Control” shall mean the occurrence of any one or more of the following:



13




(a)

Any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the REIT to any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended; provided, however, that any sale, lease, exchange or transfer to (including, without limitation, any merger or other business combination with or into) any of the following shall not constitute a Change of Control: (i) any affiliate controlled by the REIT, (ii) Inland Real Estate Corporation, (iii) Inland American Real Estate Trust, Inc., (iv) The Inland Group, Inc., or (v) any affiliate controlled by any of the entities listed in clauses (i) through (iv) above (all of the entities described in clauses (i) through (v) above are hereinafter sometimes referred to as the “Inland Companies”;

(b)

The approval by the holders of the outstanding shares of the REIT of any plan or proposal for the liquidation or dissolution of the REIT; or

(c)

Any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (other than any one or more of the Inland Companies) shall become the owner, directly or indirectly, beneficially or of record, of shares of the REIT representing more than twenty-five percent (25%) of the aggregate ordinary voting power represented by the issued and outstanding common shares of the REIT.

ARTICLE IV
INTERNAL CONTROL PROCEDURES

As a public entity, REIT is required to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as may be amended from time to time (“Section 404”). Notwithstanding anything to the contrary contained in this Agreement (including, without limitation, Article III and Section 8.4 hereof), if the Business Manager shall determine that, to provide services to and for the benefit of the Business Manager and REIT, Service Provider must comply with the requirements of Section 404, then the Business Manager and Service Provider shall develop and implement an internal control plan or other processes and procedures (or amend and revise any existing internal control plan, processes and procedures) to comply with the requirements (collectively, the “Internal Control Plan”). Once developed and implemented, Service Provider shall use its reasonable best efforts to have its internal controls comply in all respects with the requirements of Section 404. The cost and expense of development and initial implementation of any Internal Control Plan shall be borne by all clients of Service Provider that require Service Provider to comply with Section 404. Upon determination that an Internal Control Plan must be developed and implemented, Service Provider, the Business Manager and all other clients of Service Provider requiring Service Provider to comply with Section 404 shall, in good faith, negotiate an equitable allocation of the costs and expenses of the development and implementation of the Internal Control Plan between and among the parties. The foregoing provisions regarding payment and allocation of the costs and expenses of development and implementation of any Internal Control Plan shall not apply to any Internal Control Plan developed and implemented, or in the process of being developed and implemented, on or prior to the date of this Agreement.

ARTICLE V
PAYMENT

Service Provider shall invoice the Business Manager upon placement of loans brokered by the Service Provider (or any other basis as reasonably agreed to by the Business Manager). Payment shall be due upon loan funding and shall be as provided in Section 2 of Exhibit A attached hereto. The compensation to be paid by the Business Manager under this Article V and Section 2 of Exhibit A attached hereto shall constitute full and complete payment for any and all services rendered and performed by Service Provider under and pursuant to this Agreement, which compensation includes any



14




and all labor, costs and expenses incurred or to be incurred by Service Provider in connection with its performance of the Services.

ARTICLE VI
RIGHT TO AUDIT

Service Provider shall keep and make available for the examination and audit of or by the Business Manager, or the Business Manager’s authorized employees, agents or representatives during normal business hours, and upon reasonable prior notice, at the Business Manager’s cost, all data, materials and information, including but not limited to records of all receipts, costs and disbursements made by Service Provider with respect to the Services, all books, accounts, memoranda, files and all or any other documents indicating, documenting, verifying or substantiating the cost and appropriateness of any and all costs, expenditures and receipts relating to the Services. Service Provider shall allow the Business Manager (and any of the Business Manager’s employees, representatives, accountants and auditors) reasonable access to personnel, representatives and employees of Service Provider and all books and records and other business records and files of Service Provider that are reasonably required by the Business Manager for audit and tax matters.

ARTICLE VII
CONFIDENTIALITY

7.1 During the term of this Agreement, the parties may communicate to each other certain confidential information to enable Service Provider to perform the services hereunder, and/or Service Provider may develop confidential information for the Business Manager. Each party agrees:

(a) to treat, and to cause its employees, agents, subcontractors and representatives, if any, to treat as secret and confidential, all confidential information; and

(b) except as necessary in the performance of the Services, not to disclose any confidential information or make available any reports, recommendations and/or conclusions which Service Provider may make for the Business Manager to any person, firm or corporation without first obtaining the Business Manager’s written approval.

7.2 If any party learns that disclosure of confidential information is sought in or by a court or governmental body of competent jurisdiction or through other means, the party shall:

(a) give prompt notice to the other party prior to making the disclosure and allow tile other party, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, confidential information;

(b) reasonably cooperate with the other party in its efforts to prevent, or obtain a protective order for disclosure; and

(c) disclose the minimum amount of information required to be disclosed.

ARTICLE VIII
MISCELLANEOUS

8.1 Binding Effect . This Agreement shall be binding upon, and inure to the benefit of, the successors and assigns, if any, of each party hereto.

8.2 Governing Law; Jurisdiction . This Agreement shall be subject to and governed by the internal laws of the State of Illinois without regard to principles of choice of law. The parties hereto each agree that all disputes arising hereunder shall be tried in the federal and state courts located in Cook County or



15




DuPage County, State of Illinois, and each party hereby agrees to submit to the exclusive jurisdiction of those courts.

8.3 Waiver . Either party’s failure to exercise any right under this Agreement shall neither constitute a waiver of any other terms or conditions of this Agreement with respect to any other or subsequent breach, nor a waiver by that party of its right at any time thereafter to require exact and strict compliance with the terms of this Agreement.

8.4 Independent Contractors . The parties acknowledge and agree that they are dealing with each other hereunder as independent contractors. Nothing contained in the Agreement shall be interpreted as constituting either party to be the joint venturer or partner of the other parry or as conferring upon either party the power or authority to bind the other party in any transaction with third parties.

8.5 Equitable Relief and Monetary Damages . Each party hereto recognizes and acknowledges that a breach by the other party to this Agreement will cause irreparable damage to the non-breaching party that cannot be readily remedied in monetary damages in an action at law. In the event of any default or breach by either party, the non-breaching party shall be entitled to seek immediate injunctive relief to prevent irreparable harm, loss or dilution in addition to any other remedies available. Nothing herein shall limit a non-breaching party’s right to seek monetary damages with respect to a breach.

8.6 Entire Agreement . This Agreement, including the exhibits hereto, constitutes the entire agreement between the parties and contains all of the terms and conditions of the agreement between the parties with respect to the subject matter hereof. This Agreement supersedes any and all other agreements, whether oral or written, between the parties hereto, including any Affiliates of Service Provider, with respect to the subject matter hereof. No change or modification of this Agreement shall be valid unless the same shall be in writing and signed by the parties hereto.

8.7 Severability . If any provisions of this Agreement, or the application of any such provisions to parties hereto, shall be held by a court of competent jurisdiction to be unlawful or unenforceable, the remaining provisions of this Agreement shall nevertheless be valid, enforceable and shall remain in full force and effect, and shall not be affected, impaired or invalidated in any manner.

8.8 Headings . The headings in this Agreement are inserted for convenience only and are not to be considered in the interpretation or construction of the provisions hereof.

8.9 Notices . All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given or delivered:

(a) when delivered personally or by commercial messenger;

(b) one (1) business day following deposit with a recognized overnight courier service, provided the deposit occurs prior to the deadline imposed by the overnight courier service for overnight delivery; or

(c) when transmitted, if sent by facsimile copy, provided confirmation of receipt is received by sender and such notice is sent by an additional method provided hereunder;

in each case above provided the notice or other communication is addressed to the intended recipient thereof as set forth below:


If to Service Provider, to:

Inland Mortgage Investment Corporation
2901 Butterfield Road
Oak Brook, IL 60523
Attention: Raymond E. Petersen
Facsimile: (630) 218-4961



16






 

 

If to the Business Manager, to:

Inland Western Retail Real Estate Advisory Services, Inc.
2901 Butterfield Road
Oak Brook, IL 60523
Attention: Roberta S. Matlin
Facsimile: (630) 218-4955

A party’s address for notice may be changed from time to time by notice given to the other party in the manner herein provided for giving notice.

8.10 Further Assurance . Each party to this Agreement agrees to execute and deliver any and all documents, and to perform any and all further acts that may be reasonably necessary to carry out the provisions of this Agreement and the transactions contemplated hereby.

8.11 Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

8.12 Assignment . The Business Manager shall not assign this Agreement without the prior express written consent of the Service Provider; provided, however, if the REIT shall acquire or consolidate its business with the Business Manager, this Agreement shall be and be deemed assigned by the Business Manager to the REIT with the REIT assuming all of the obligations of Business Manager under the terms of this Agreement effective the date of such acquisition or consolidation. Service Provider shall not assign this Agreement without the prior express written consent of the Business Manager.

(The balance of this page is intentionally left blank.)




17




IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.


THE BUSINESS MANAGER:

 

SERVICE PROVIDER:

 

 

 

 

 

INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC, an Illinois corporation

 

INLAND MORTGAGE INVESTMENT CORPORATION, an Illinois corporation

By: 


/s/ Brenda Gail Gujral

 

By: 


/s/ Frances C. Panico

Name: 

Brenda Gail Gujral

 

Name: 

Frances C. Panico

Its: 

Vice President

 

Its: 

Sr. Vice President




11




EXHIBIT A

1. Services : The Services to be provided under this Agreement shall be provided as and when requested by the Business Manager, or any authorized agent of the Business Manager. Service Provider agrees to provide communications and media relations services, including but not limited to, the following:

Contact all of our various lenders to obtain quotes on transactions being acquired and/or already acquired by Business Manager.

Compile all quotes obtained from various lenders into a financial quote spreadsheet and present to Business Manager for determination of lender for each specific property.

Obtain and complete applications and rate locks for Business Manager on their various properties once a lender has been determined. Rate lock various transactions for Business Manager once instructed to do so.

Provide the various lenders with due diligence documentation, third party reports, insurance certificates, arrange site inspections and answer and/or provide lender with answers to their various property questions during the financing process.

Review and negotiate loan documents on behalf of Business Manager to insure all terms and conditions of the transaction are what have been agreed to.

Prepare closing statements, review closing figures for accuracy and insure Business Manager is not being overcharged for any services rendered by Lender associated with the closing of a specific loan.

Prepare and present Business Manager and Inland Mortgage Servicing Corporation with a copy of executed loan documents and closing memorandum after financing has been completed.

Negotiate already agreed to terms and conditions of the Business Manager’s standard loan documents with various lender when future development/financing strategies are discussed and would like to be implemented by the Business Manager.

Contact new lending sources, explain our standard financing practices and parameters and negotiate new loan documents.

Follow up and make sure closure is obtained on all post closing obligations and post closing repairs on the various properties owned by the Business Manager which the Service Provider has financed.

Handle all property assumption on behalf of the Business Manager which entitles dealing with the existing servicer on that specific property, obtaining all required due diligence, obtain current insurance certificates, provide financials on guarantor and answer and/or address any questions the servicer may have on that specific loan assumption.

Work with various lender servicers to obtain release of any Letters of Credits, guarantees or monetary holdbacks associated with the various properties financed for Business Manager and provide Business Manager with evidence that all releases have been made and/or that all funds have been released.

Prepare, maintain and provide to the Business Manager a weekly financing spreadsheet which outlines all properties under application, lender name, term of loan, rate of loan,



12




anticipated closing date, a list of all unallocated properties, list of various lender rate locks and loans applied to those rate locks, etc.

2. Compensation : Service Provider shall be paid for all services rendered under this Agreement on the basis of 0.2% of the principal amount of each loan placed for the REIT and/or its Affiliates.






13


Exhibit 10.546

FIRST AMENDMENT TO MORTGAGE BROKERAGE SERVICES AGREEMENT

This First Amendment to that certain Mortgage Brokerage Services Agreement dated as of November 1, 2006 (“Services Agreement”) made between INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC., (“Business Manager”) a Maryland corporation and INLAND MORTGAGE BROKERAGE CORPORATION (“Service Provider”), an Illinois corporation, is made as of November 1, 2006.

RECITAL

Business Manager and Service Provider desire to amend the Compensation paid to Service Provider by providing for an hourly, actual cost to Service Provider, charge for post closing services requested by the Business Manager or the REIT and/or a REIT Affiliate and rendered by the Service Provider, such services including the completion of post closing obligations and other services not covered under or compensated by the percentage brokerage fee.

NOW THEREFORE, in consideration of the agreements to be made herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

1. The Recital set forth above is hereby incorporated herein by reference.

2. Effective as of November 1, 2006, a new subparagraph is added to Paragraph 1 of Exhibit A, as follows;

“Follow up and complete post closing obligations of borrowers as requested by the Business Manager, or the REIT or Affiliates of the REIT (“Post Closing Services”).”

3. Effective December 1, 2006, Paragraph 2 of Exhibit A to the Agreement is deleted in its entirety and in lieu thereof the following is inserted:

“2. Compensation : Except for Post Closing Services, Service Provider shall be paid for all services rendered under this Agreement on the basis of 0.2% of the principal amount of each loan placed for the REIT and/or its Affiliates. For Post Closing Services, Service Provider shall be paid at the rate $34.00 per hour of Post Closing Services rendered.”

In all other respects the Services Agreement remains in full force and effect


 

 

 

INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC.

 

 

 

By: 


/s/ Brenda Gail Gujral

 

 

 

Its: 

Vice President


 

 

 

INLAND MORTGAGE BROKERAGE CORPORATION

 

 

 

By: 


/s/ Gail P. Gress

 

 

 

Its: 

Vice President







EXHIBIT 10.548

EXECUTION COPY

SECOND AMENDMENT TO MORTGAGE BROKERAGE SERVICES AGREEMENT

This Second Amendment to that certain Mortgage Brokerage Services Agreement dated as of January 1, 2004, as amended ("Services Agreement"), made between INLAND MORTGAGE INVESTMENT CORPORATION ("Service Provider"), an Illinois corporation whose interest in such agreement has been assigned to Inland Mortgage Brokerage Corporation, and  INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC. ("Business Manager"), an Illinois corporation, is made as of November 15, 2007 by the parties to the Services Agreement.

In consideration of the agreements to be made herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

1.

Section 2.2 of the Services Agreement is hereby deleted in its entirety and in lieu thereof the following is inserted:

"2.2  The Business Manager and Service Provider acknowledge that the Services to be provided by Service Provider hereunder are to be provided on a non-exclusive basis such that  Business Manager shall be permitted to employ other parties to perform any one or more of the Services and that Service Provider shall be permitted to perform any one or more of the Services to other parties."

2.

Section 3.3 of the Services Agreement is hereby deleted in its entirety and in lieu thereof the following is inserted:

"3.3 At any time during the Initial Services Term or during an Additional Services Term, the Business Manager shall have the right to terminate this Agreement, without cause, by providing not less than one hundred eighty (180) days’ prior written notice to Service Provider of any election to terminate and specifying the effective date of such termination."

3.

Section 3.4 of the Services Agreement is hereby amended by deleting the words "sixty (60)" set forth therein and in lieu thereof inserting the words "thirty (30)".

4.

Section 3.5 of the Services Agreement is hereby amended by deleting the first sentence thereof in its entirety and in lieu thereof the following is inserted:

"If at any time during the Initial Services Term or any Additional Services Term the REIT has had a Change of Control, as hereinafter defined, Service Provider shall have the right to terminate this Agreement, without cause, upon not less than thirty (30) days prior written notice to Business Manager."

In all other respects the Services Agreement remains in full force and effect.



1



INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC.

By:

Its:  

        

INLAND MORTGAGE BROKERAGE CORPORATION        

By:

Its:

        









[Signature Page to Second Amendment to Mortgage Brokerage Services Agreement]

Endnotes





2





Exhibit 10.548

OFFICE AND FACILITIES MANAGEMENT SERVICES AGREEMENT

This Office and Facilities Management Services Agreement (this “Agreement”), dated as of February 10, 2005 (the “Effective Date”), is entered into by and among INLAND FACILITIES MANAGEMENT, INC., an Illinois corporation (“IFMI”), INLAND OFFICE SERVICES, INC., an Illinois corporation, Inland Real Estate Strategic Services, Inc. (“IRESSI”), an Illinois corporation (IFMI, IOS and IRESSI, individually, “Service Provider” and collectively, “Service Providers”) and INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC., an Illinois corporation (the “Business Manager”).

RECITALS

WHEREAS, Service Providers are in the business of providing certain office and facilities management services, including without limitation, the office and facilities management services described and set forth in Exhibit A hereto (collectively, the “Services”); and

WHEREAS, the Business Manager is desirous of retaining Service Providers to perform the Services for the Business Manager in connection with the Real Estate Business (as defined herein) for the benefit of REIT (as defined herein) and/or its Affiliates (as defined herein), and Service Providers are willing to perform the Services, subject to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and obligations set forth below, the parties hereto, intending to be legally bound, agree to the foregoing and as follows:

ARTICLE I
DEFINITIONS

“Affiliate” shall mean, except as otherwise provided herein, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meaning, the terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of that Person through the ownership of voting securities, by contract or otherwise. With respect to the Business Manager, any entity representing a joint venture or similar arrangement in which the Business Manager, or an entity controlled by the Business Manager, is the general partner or managing member shall be deemed to be an “Affiliate” of the Business Manager.

“Business Management Agreement” shall mean that certain Advisory Agreement, dated as of September 18, 2003, as amended from time to time, between the Business Manager and REIT.

“Person” shall mean an individual, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Real Estate Business” shall mean (i) any business activities conducted by REIT so long as REIT remains qualified as a “real estate investment trust” under Section 856 the Internal Revenue Code of 1986, as amended, and (ii) any business that is consistent with and limited to the description of the business of REIT contained in the prospectus forming a part of the Registration Statement on Form S-11 (No. 333-122743), as amended, filed by REIT with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended.


“REIT” shall mean Inland Western Retail Real Estate Trust, Inc., a Maryland corporation.







ARTICLE II
PERFORMANCE OF SERVICES

2.1 Service Providers agree to perform the Services for the Business Manager in connection with the Real Estate Business for the benefit of the REIT and/or its or their Affiliates. Service Providers shall perform and provide the Services in a professional manner and in accordance with all laws, statutes, ordinances, codes, rules and regulations applicable to the Services. Service Providers, at Business Manager’s cost, may employ, contract with or use the service of any third party in connection with the performance of the Services as the Service Providers deem reasonably necessary or desirable, including independent, outside counsel.

2.2 The Business Manager and Service Providers acknowledge that the relationship created hereby is on an exclusive basis as to Business Manager such that during the Initial Services Term and any Additional Services Term (except during any period that Service Provider is in default hereunder), (x) the Business Manager shall be required to retain only the Service Providers to perform all of the Services or any individual Service, (y) the Business Manager shall not be permitted to retain third parties to perform for the Business Manager services the same as or similar to the Services or any individual Service, but that in any event Service Providers shall be permitted to perform the Services or any individual Service for any other parties.

ARTICLE IV
TERM AND TERMINATION

3.1 Subject to the termination provisions set forth in this Article III , this Agreement shall continue for an initial period of three (3) years from the Effective Date (“Initial Services Term) and shall be automatically renewed for consecutive three (3) year terms thereafter (each an “Additional Services Term”) unless earlier terminated as hereafter provided.

3.2 At any time during the Initial Services Term or at any time during an Additional Services Term, the Business Manager may terminate this Agreement for cause (i.e., a material default by Service Providers hereunder) upon ten (10) days’ prior written notice to Service Providers; provided, however, that prior to exercising its rights under this Section 3.2, the Business Manager shall notify Service Providers of any default, and Service Providers shall have thirty (30) days after receipt of the notice to cure the default to the Business Manager’s reasonable satisfaction. As full compensation to which Service Providers shall be entitled, the Business Manager shall promptly make payment to Service Providers as provided in Article V below for the Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.

3.3 At any time during the Initial Services Term or during an Additional Services Term, the Business Manager shall have the right to terminate this Agreement, without cause, by providing not less than sixty (60) days’ prior written notice to the Service Providers of any election to so terminate and specifying the effective date of such termination; provided, however, in such event, the Service Providers shall be entitled to and shall be paid a termination fee equal to the product of: (a) the average monthly compensation, set forth on Exhibit A, for the six (6) months immediately preceding the month in which the Service Providers are served the termination notice from the Business Manager, multiplied by (b) six (6) (“Termination Fee”). The Termination Fee shall be paid on the effective date of such termination with a credit to Business Manager of compensation paid to the Service Providers for the period from the date for Service Providers’ receipt of the termination notice to and including the effective date of such termination.

3.4 Provided that a Service Provider is not providing or is terminating such Services to all other clients of Service Provider, and no affiliate of Service Provider is providing or is undertaking to provide such Services, Service Provider, at any time during the Initial Services Term or during an Additional Services Term, may elect to limit one or more of the Services it is providing to the Business Manager upon not less than sixty (60) days’ prior written notice to the Business Manager, specifying the effective date such Services shall no longer be performed and describing in reasonable detail the Services to be terminated. As full compensation to which Service Provider







shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.

3.5 If at any time during the Initial Services Term or any Additional Services Term the REIT has had a Change of Control, as hereinafter defined, a Service Provider shall have the right to terminate this Agreement, without cause, upon written notice to Business Manager. At any time during the Initial Services Term or any Additional Services Term, and the REIT has not had a Change of Control, a Service Provider shall have the right to terminate this Agreement, without cause, by providing not less than one hundred eighty (180) days’ prior written notice to the Business Manager, specifying the effective date of such termination. The foregoing notwithstanding, a Service Provider, upon ten (10) days’ prior written notice to the Business Manager, may terminate this Agreement, or decline to provide a particular Service hereunder upon the occurrence of any of the following events:

(a) The Business Manager fails, in the absence of a bona fide dispute with respect to any payment, to make payment for Services on its due date; provided, however, the Business Manager may cute the breach up to three (3) times per calendar year by making payment within ten (10) days of the Business Manager’s receipt of written notice that it failed to make the payment when due;

(b) The Business Manager requests that a Service Provider provide Services that in the Service Providers’ opinion would violate any applicable law or the rules of any regulatory body with jurisdiction and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid opinion;

(c) The Business Manager requests that a Service Provider take any action that in the Service Provider’s opinion would result in the commission of a fraud upon any person or party and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid opinion;

(d) The Business Manager requests that a Service Provider take any action that, upon the advice of counsel to Service Provider, could subject a Service Provider to liability or material damages in civil litigation and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid advice of counsel; or

(e) The Business Manager requests that a Service Provider provide Services that upon advice of counsel to a Service Provider would cause the Service Provider or any of its employees to be in violation of its professional code of ethics or other ethical standards the Service Provider or any of its employees is subject to and the Business Manager does not promptly withdraw the request upon the Service Provider’s notice to the Business Manager of Service Provider’s counsel’s advice.

As full compensation to which Service Providers shall be entitled, the Business Manager shall promptly make payment to the Service Providers as provided in Article V below for Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.

3.6 Upon any termination of this Agreement or cessation of Services arising under Sections 3.2 or 3.4 of this Agreement, during the Initial Services Term or any Additional Services Term, Service Providers shall provide the Business Manager with a reasonable opportunity to transition any terminated Services to any replacement provider(s) designated by the Business Manager (“Replacement Provider”), which period shall not be more than sixty (60) days from the date of termination of this Agreement or specified terminated Services (the “Transition Period”). During the Transition Period, Service Providers shall use reasonable efforts to avoid causing any unnecessary interruption of the terminated Services so as to provide a smooth transition of such Services (the “Transition”). All services related to Transition shall be deemed Services and subject to the charges and fees set forth in Exhibit A attached hereto.







3.7 For the purposes hereof, the term “Change of Control” shall mean the occurrence of any one or more of the following:

(a)

Any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the REIT to any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended; provided, however, that any sale, lease, exchange or transfer to (including, without limitation, any merger or other business combination with or into) any of the following shall not constitute a Change of Control: (i) any affiliate controlled by the REIT, (ii) Inland Real Estate Corporation, (iii) Inland American Real Estate Trust, Inc., (iv) The Inland Group, Inc., or (v) any affiliate controlled by any of the entities listed in clauses (i) through (iv) above (all of the entities described in clauses (i) through (v) above are hereinafter sometimes referred to as the “Inland Companies”;

(b)

 The approval by the holders of the outstanding shares of the REIT of any plan or proposal for the liquidation or dissolution of the REIT; or

(c)

Any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (other than any one or more of the Inland Companies) shall become the owner, directly or indirectly, beneficially or of record, of shares of the REIT representing more than twenty-five percent (25%) of the aggregate ordinary voting power represented by the issued and outstanding common shares of the REIT.

ARTICLE IV
INTERNAL CONTROL PROCEDURES

As a public entity, REIT is required to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as may be amended from time to time (“Section 404”). Notwithstanding anything to the contrary contained in this Agreement (including, without limitation, Article III and Section 8.4 hereof), if the Business Manager shall determine that, to provide services to and for the benefit of the Business Manager and REIT, Service Providers must comply with the requirements of Section 404, then the Business Manager and Service Providers shall develop and implement an internal control plan or other processes and procedures (or amend and revise any existing internal control plan, processes and procedures) to comply with the requirements (collectively, the “Internal Control Plan”). Once developed and implemented, Service Providers shall use their reasonable best efforts to have their internal controls comply in all respects with the requirements of Section 404. The cost and expense of development and initial implementation of any Internal Control Plan shall be borne by all clients of Service Providers that require Service Providers to comply with Section 404. Upon determination that an Internal Control Plan must be developed and implemented, Service Providers, the Business Manager and all other clients of Service Providers requiring Service Providers to comply with Section 404 shall, in good faith, negotiate an equitable allocation of the costs and expenses of the development and implementation of the Internal Control Plan between and among the parties. The foregoing provisions regarding payment and allocation of the costs and expenses of development and implementation of any Internal Control Plan shall not apply to any Internal Control Plan developed and implemented, or in the process of being developed and implemented, on or prior to the date of this Agreement.

ARTICLE V
PAYMENT

Service Providers shall invoice the Business Manager monthly (or any other basis as reasonably agreed to by the Business Manager) for any Services performed during the immediately preceding calendar month (or any other period agreed to by the Business Manager). Payment shall be due thirty (30) days after the date of the Business Manager’s receipt of the same and shall be as provided in Section 2 of Exhibit A attached hereto. The compensation to be paid by the Business Manager under this Article V and Section 2 of Exhibit A attached hereto shall constitute full and complete payment for any and all services rendered and performed by Service Providers







under and pursuant to this Agreement, which compensation includes any and all labor, costs and expenses incurred or to be incurred by Service Providers in connection with its performance of the Services.

ARTICLE VI
RIGHT TO AUDIT

Service Providers shall keep and make available for the examination and audit of or by the Business Manager, or the Business Manager’s authorized employees, agents or representatives during normal business hours, and upon reasonable prior notice, at the Business Manager’s cost, all data, materials and information, including but not limited to records of all receipts, costs and disbursements made by Service Providers with respect to the Services and all Operating Expenses (as defined in Exhibit A attached hereto), all books, accounts, memoranda, files and all or any other documents indicating, documenting, verifying or substantiating the cost and appropriateness of any and all costs, expenditures and receipts relating to the Services and/or Operating Expenses. Service Providers shall allow the Business Manager (and any of the Business Manager’s employees, representatives, accountants and auditors) reasonable access to personnel, representatives and employees of Service Providers and all books and records and other business records and files of Service Providers that are reasonably required by the Business Manager for audit and tax matters.

ARTICLE VII
CONFIDENTIALITY

7.1 During the term of this Agreement, the parties may communicate to each other certain confidential information to enable Service Providers to perform the services hereunder, and/or Service Providers may develop confidential information for the Business Manager. Each party agrees:

(a) to treat, and to cause its employees, agents, subcontractors and representatives, if any, to treat as secret and confidential, all confidential information; and

(b) except as necessary in the performance of the Services, not to disclose any confidential information or make available any reports, recommendations and/or conclusions which Service Providers may make for the Business Manager to any person, firm or corporation without first obtaining the Business Manager’s written approval.

7.2 If any party learns that disclosure of confidential information is sought in or by a court or governmental body of competent jurisdiction or through other means, the party shall:

(a) give prompt notice to the other party prior to making the disclosure and allow the other party, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, confidential information;

(b) reasonably cooperate with the other party in its efforts to prevent, or obtain a protective order for disclosure; and

(c) disclose the minimum amount of information required to be disclosed.

ARTICLE VIII
MISCELLANEOUS

8.1 Binding Effect . This Agreement shall be binding upon, and inure to the benefit of, the successors and assigns, if any, of each party hereto.

8.2 Governing Law; Jurisdiction . This Agreement shall be subject to and governed by the internal laws of the State of Illinois without regard to principles of choice of law. The parties hereto each agree that all disputes







arising hereunder shall be tried in the federal and state courts located in Cook County or DuPage County, State of Illinois, and each party hereby agrees to submit to the exclusive jurisdiction of those courts.

8.3 Waiver . Either party’s failure to exercise any right under this Agreement shall neither constitute a waiver of any other terms or conditions of this Agreement with respect to any other or subsequent breach, nor a waiver by that party of its right at any time thereafter to require exact and strict compliance with the terms of this Agreement.

8.4 Independent Contractors . The parties acknowledge and agree that they are dealing with each other hereunder as independent contractors. Nothing contained in the Agreement shall be interpreted as constituting either party to be the joint venturer or partner of the other party or as conferring upon either party the power or authority to bind the other party in any transaction with third parties.

8.5 Equitable Relief and Monetary Damages . Each party hereto recognizes and acknowledges that a breach by the other party to this Agreement will cause irreparable damage to the non-breaching party that cannot be readily remedied in monetary damages in an action at law. In the event of any default or breach by either party, the non-breaching party shall be entitled to seek immediate injunctive relief to prevent irreparable harm, loss or dilution in addition to any other remedies available. Nothing herein shall limit a non-breaching party’s right to seek monetary damages with respect to a breach.

8.6 Entire Agreement . This Agreement, including the exhibits hereto, constitutes the entire agreement between the parties and contains all of the terms and conditions of the agreement between the parties with respect to the subject matter hereof. This Agreement supersedes any and all other agreements, whether oral or written, between the parties hereto, including any Affiliates of Service Providers, with respect to the subject matter hereof. No change or modification of this Agreement shall be valid unless the same shall be in writing and signed by the parties hereto.

8.7 Severability . If any provisions of this Agreement, or the application of any such provisions to parries hereto, shall be held by a court of competent jurisdiction to be unlawful or unenforceable, the remaining provisions of this Agreement shall nevertheless be valid, enforceable and shall remain in full force and effect, and shall not be affected, impaired or invalidated in any manner.

8.8 Headings . The headings in this Agreement are inserted for convenience only and are not to be considered in the interpretation or construction of the provisions hereof.

8.9 Notices . All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given or delivered:

(a) when delivered personally or by commercial messenger;

(b) one (1) business day following deposit with a recognized overnight courier service, provided the deposit occurs prior to the deadline imposed by the overnight courier service for overnight delivery; or

(c) when transmitted, if sent by facsimile copy, provided confirmation of receipt is received by sender and such notice is sent by an additional method provided hereunder;

in each case above provided the notice or other communication is addressed to the intended recipient thereof as set forth below;


If to IFMI, to:

Inland Facilities Management Services, Inc.
2901 Butterfield Road
Oak Brook, IL 60523
Attention: Dayle M. Gillett
Facsimile: (630) 954-5699

 

 









If to IOS, to:

Inland Office Services, Inc.
2901 Butterfield Road
Oak Brook, IL 60523
Attention: Dayle M. Gillett
Facsimile: (630) 954-5699

 

 

If IRESSI, to:

Inland Real Estate Strategic Services, Inc.
2901 Butterfield Road
Oak Brook, IL 60523
Attention: Alan F. Kremin
Facsimile: (630) 218-4917

 

 

If to the Business Manager, to:

Inland American Business Manager & Advisor, Inc.
2901 Butterfield Road
Oak Brook, IL 60523
Attention: Roberta S. Matlin
Facsimile: (630) 218-4955

A party’s address for notice may be changed from time to time by notice given to the other party in the manner herein provided far giving notice.

8.10 Further Assurance . Each party to this Agreement agrees to execute and deliver any and all documents, and to perform any and all further acts that may be reasonably necessary to carry out the provisions of this Agreement and the transactions contemplated hereby.

8.11 Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

8.12 Assignment . The Business Manager shall not assign this Agreement without the prior express written consent of the Service Providers; provided, however, if the REIT shall acquire or consolidate its business with the Business Manager, this Agreement shall be and be deemed assigned by the Business Manager to the REIT with the REIT assuming all of the obligations of Business Manager under the terms of this Agreement effective the date of such acquisition or consolidation. Service Providers shall not assign this Agreement without the prior express written consent of the Business Manager.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.


THE BUSINESS MANAGER:

 

IFMI:

 

 

 

INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC., an Illinois corporation

 

INLAND FACILITIES MANAGEMENT SERVICES, INC., an Illinois corporation

By: 


/s/ Brenda Gail Gujral

 

By: 


/s/ Alan F. Kremin

Name: 

Brenda Gail Gujral

 

Name: 

Alan F. Kremin

Its: 

Vice President

 

Its: 

Treasurer

 

 

 

 

 

 

 

 

IOS:

 


 

 

 

INLAND OFFICE SERVICES, INC., an Illinois corporation

 

 

 

By: 


/s/ Alan F. Kremin









 

 

 

Name: 

Alan F. Kremin

 

 

 

Its: 

Treasurer


 

 

 

INLAND REAL ESTATE STRATEGIC SERVICES, INC ., an Illinois corporation

 

 

 

By: 


/s/ Alan F. Kremin

 

 

 

Name: 

Alan F. Kremin

 

 

 

Its: 

Treasurer








EXHIBIT A

1. Services : The services to be provided under this Agreement shall be provided on an on-going, continuous basis throughout the Services Term, unless otherwise requested by the Business Manager. Service Providers agree to provide to the Business Manager office and facilities management services, including but not limited to, the following:

·

Oversight of all 2901 and 2907 telecommunication functions, including reception services, telephone systems (including voice mail and cellular phones) and contract negotiation

·

Office supply purchasing, inventory, distribution and billing

·

All office equipment purchasing and maintenance; including copy and fax machines

·

All United States mail services plus courier, overnight deliveries and messenger services

·

Furniture purchasing, inventory control and price comparison studies

·

Coffee, vending services, outside luncheon food service, general staff and officer meeting catering

·

Plant maintenance, contract negotiations

·

Scheduling of conference rooms and planning all meetings

·

Scheduling of corporate van

·

Lost and found box

·

Security cards maintained

·

Corporate A/V equipment rentals and negotiations

·

Floor plan updates

·

Order of kitchen supplies and equipment

·

Order electrical supplies and repairs

·

Review of construction quality; and on-site management of all projects

·

Village inspection coordination

·

Utility & outside contractor coordination

·

Bill payments for building utilities - handle any disputes

·

Coffee and tea service throughout building

·

ID Badge distribution and upkeep of records and maintenance

·

Monitoring HVAC and temperature controls for all offices

·

Electrical repair, including light bulb replacement & negotiating of prices

·

Light plumbing repair

·

Furniture repairs and assembly, along with delivery to specific offices

·

Door lock replacement and repair

·

Supervise key system, key distribution and record keeping



A-9




·

Monitoring of security and fire systems and fire inspection up keep

·

Repair and replacement of kitchen appliances and equipment

·

Inspection of interior building condition

·

Overall housekeeping supervision

·

Ordering/negotiation of all cleaning supplies

·

Kitchen cleaning

·

Structure maintenance

·

Construction project supervision / contract negotiations

·

Repair, maintenance and replacement of main HVAC units

·

Landscape contracting and supervision, including watering and weekly cleanup

·

Snow removal (including walkways) contracting and supervision

·

Waste removal contracting and supervision

·

Contracting of evening cleaning services

·

Window washer contracting and supervision

·

Maintain square footage records, retrieving and delivering of materials from 2901 and 2907

·

General maintenance at 2907 building

·

Daily courier service to 2907 building

·

Procurement of goods and services, including equipment and equipment leases, and supplies, on an aggregate basis to maximize volume discounts.

2. Compensation : Service Providers shall be paid for all services rendered under this Agreement as follows:

(a)

Services of IOS

·

Telephones . With respect to the installation of telephones, the Business Manager shall reimburse Service Providers for the actual cost of the telephones.

·

Mailroom and Courier Salaries and Overhead. The Business Manager shall pay IOS the Business Manager’s Pro Rata Share (hereinafter defined) of the salaries and overhead of IOS’S mailroom and courier personnel incurred during the applicable calendar month. For the purposes hereof, the “Business Manager’s Pro Rata Share” shall be a fraction, the numerator of which shall be the aggregate net rentable square feet of space leased or occupied by the Business Manager (as of the end of the applicable calendar month) under and pursuant to its lease of space in the office building located at 2907 Butterfield Road Oak Brook, Illinois, and the denominator of which shall be the aggregate net rentable square feet of space leased or occupied by all clients (including the Business Manager) of IOS (as of the end of the applicable calendar month) in the office buildings located at 2901 and 2907 Butterfield Road, Oak Brook,



A-10




Illinois, and in any other buildings located with the office complex of which the 2901 and 2907 buildings are a part (collectively, the “Buildings”), and for whom IOS provides services that are the same or substantially similar to the Services. With each invoice, IOS shall include an itemized list of all of IOS’s clients and the net rentable square feet leased by each of the clients in the Buildings (as of the end of the applicable calendar month).

·

Switchboard Salaries and Overhead . The Business Manager shall pay IOS the Business Manager’s Proportionate Share (hereinafter defined) of the salaries and overhead of IOS’s switchboard personnel incurred during the applicable calendar month. For the purposes hereof, the “Business Manager’s Proportionate Share shall be a fraction, the numerator of which shall be the actual number of the Business Manager’s telephones serviced (as of the end of the applicable calendar month) by IOS’s central switchboard, and the denominator of which shall be the aggregate number of telephones of all clients (including the Business Manager) of IOS serviced (as of the end of the applicable calendar month) by IOS’s central switchboard. With each invoice, IOS shall include an itemized list of all of IOS’s clients and the actual number of telephones of the clients serviced by IOS’s central switchboard (as of the end of the applicable calendar month).

·

Other Services . The Business Manager shall pay to IOS the Business Manager’s Pro Rata Share of all Operating Expenses (hereinafter defined). For the purposes hereof, the term “Operating Expenses” shall mean any and all actual, out-of-pocket costs and expenses (excluding, however, any and all fees, costs, expenses and other amounts payable by the Business Manager as provided in Sections 2(a)(i), (ii) and/or (iii) above) incurred by IOS during the applicable calendar month in connection with the performance and rendering of services that are the same as or substantially similar to the Services to all of IOS’s clients (including the Business Manager) that lease space in the Buildings, which costs and expenses may include, without limitation or duplication: (1) the salaries, employee benefits and bonuses of its employees; (2) copy costs; (3) administrative overhead; (4) rent for office space; and (5) costs of materials and supplies.

·

Notwithstanding anything contained in this Agreement to the contrary, in no event shall the amount fees, charges, costs, expenses or other compensation charged by IOS to all of its clients (including the Business Manager) that lease space in the Buildings for any and all services (including the Services) provided by IOS exceed the actual Operating Expenses incurred by IOS in providing the services.

(b)

Services of IFMI .

·

Service Providers acknowledge and agree that a portion of the rent payable by the Business Manager under and pursuant to its lease of space in the building located at 2907 Butterfield Road, Oak Brook, Illinois, is and shall be allocated and paid (by the landlord under the lease) to IFMI for any and all Services provided hereunder. Accordingly, Service Providers agree that it shall not, pursuant to the terms and provisions of this Agreement, bill the Business Manager, and that it shall look solely to reimbursement of a portion of the rent



A-11




as full and complete compensation, for any and all Services provided by IFMI hereunder.

(c)

Services of IRESSI .

·

The Business Manager shall pay to IRESSI, quarterly, one fourth (1/4) of the product of the REIT’s estimated annual weighted average percentage use of the estimated annual costs of the major services contracted for by IRESSI.

(d)

Market Rate for Services .

·

Service Providers represent that, to its knowledge, the rates and other charges payable by the Business Manager under this Agreement do not and shall not exceed the market rate for similar services provided to companies of size, nature and business similar to the Business Manager or REIT. If the Business Manager determines that any of the rates and/or other amounts charged by Service Providers under this Agreement shall exceed the market rate for similar services provided to companies of size, nature and business similar to the Business Manager or REIT, then Business Manager and Service Providers shall negotiate in good faith to adjust the rates and other amounts to market.





A-12


EXHIBIT 10.549

EXECUTION COPY

AMENDMENT TO
OFFICE AND FACILITIES MANAGEMENT SERVICES AGREEMENT

This Amendment to that certain Office and Facilities Management Services Agreement dated as of February 10, 2005 ("Services Agreement") made between INLAND FACILITIES MANAGEMENT, INC., INLAND OFFICE SERVICES, INC., INLAND REAL ESTATE STRATEGIC SERVICES, INC. (n/k/a Inland Purchasing Services, Inc. ) (collectively, "Service Provider"), all Illinois corporations, and  INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC. ("Business Manager"), an Illinois corporation, is made as of November 15, 2007 by the parties to the Services Agreement.

In consideration of the agreements to be made herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

1.

Section 2.2 of the Services Agreement is hereby deleted in its entirety and in lieu thereof the following is inserted:

"2.2  The Business Manager and Service Provider acknowledge that the Services to be provided by Service Provider hereunder are to be provided on a non-exclusive basis such that Business Manager shall be permitted to employ other parties to perform any one or more of the Services and that Service Provider shall be permitted to perform any one or more of the Services to other parties."

2.

Section 3.3 of the Services Agreement is hereby deleted in its entirety and in lieu thereof the following is inserted:

"3.3 At any time during the Initial Services Term or during an Additional Services Term, the Business Manager shall have the right to terminate this Agreement, without cause, by providing not less than one hundred eighty (180) days’ prior written notice to Service Provider of any election to terminate and specifying the effective date of such termination."

3.

Section 3.4 of the Services Agreement is hereby amended by deleting the words "sixty (60)" set forth therein and in lieu thereof inserting the words "thirty (30)".

4.

Section 3.5 of the Services Agreement is hereby amended by deleting the first sentence thereof in its entirety and in lieu thereof the following is inserted:

"If at any time during the Initial Services Term or any Additional Services Term the REIT has had a Change of Control, as hereinafter defined, Service Provider shall have the right to terminate this Agreement, without cause, upon not less than thirty (30) days prior written notice to Business Manager."



1



In all other respects the Services Agreement remains in full force and effect.

INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC.

By:

Its:

        

INLAND FACILITIES MANAGEMENT, INC.

By:

Its:

        

INLAND OFFICE SERVICES, INC.

By:

Its:  

        

INLAND PURCHASING SERVICES, INC.

By:

Its:  

        







[Signature Page to Amendment to Office and Facilities Management Services Agreement]

Endnotes





2





Exhibit 10.550

PERSONNEL SERVICES AGREEMENT

This Personnel Services Agreement (this “Agreement”), dated as of January 1, 2004 (the “Effective Date”), is entered into by and between INLAND PAYROLL SERVICES, INC., an Illinois corporation (“Service Provider”) and INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC., an Illinois corporation (the “Business Manager”).

RECITALS

WHEREAS, Service Provider is in the business of providing certain personnel services, including without limitation, the personnel services described and set forth in Exhibit A hereto (collectively, the “Services”); and

WHEREAS, the Business Manager is desirous of retaining Service Provider to perform the Services for the Business Manager in connection with the Real Estate Business (as defined herein) for the benefit of REIT (as defined herein) and/or its Affiliates (as defined herein), and Service Provider is willing to perform the Services, subject to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and obligations set forth below, the parties hereto, intending to be legally bound, agree to the foregoing and as follows:

ARTICLE I
DEFINITIONS

“Affiliate” shall mean, except as otherwise provided herein, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meaning, the terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of that Person through the ownership of voting securities, by contract or otherwise. With respect to the Business Manager, any entity representing a joint venture or similar arrangement in which the Business Manager, or an entity controlled by the Business Manager, is the general partner or managing member shall be deemed to be an “Affiliate” of the Business Manager.

“Business Management Agreement” shall mean that certain Advisory Agreement, dated as of September 18, 2003, as amended from time to time, between the Business Manager and REIT.

“Person” shall mean an individual, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Real Estate Business” shall mean (i) any business activities conducted by REIT so long as REIT remains qualified as a “real estate investment trust” under Section 856 the Internal Revenue Code of 1986, as amended, and (ii) any business that is consistent with and limited to the description of the business of REIT contained in the prospectus forming a part of the Registration Statement on Form S-11 (No. 333-122743), as amended, filed by REIT with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended.

“REIT” shall mean Inland Western Retail Real Estate Trust, Inc., a Maryland corporation.





ARTICLE II
PERFORMANCE OF SERVICES

2.1 Service Provider agrees to perform the Services for the Business Manager in connection with the Real Estate Business of the REIT and/or its or their Affiliates. Service Provider shall perform and provide the Services in a professional manner and in accordance with all laws, statutes, ordinances, codes, rules and regulations applicable to the Services. Service Provider, at Business Manager’s cost, may employ, contract with or use the service of any third party in connection with the performance of the Services as the Service Provider deems reasonably necessary or desirable, including independent, outside counsel.

2.2 The Business Manager and Service Provider acknowledge that the relationship created hereby is on an exclusive basis as to Business Manager such that during the Initial Services Term and any Additional Services Term (except during any period that Service Provider is in default hereunder), (x) the Business Manager shall be required to retain only the Service Provider to perform all of the Services or any individual Service, (y) the Business Manager shall not be permitted to retain third parties to perform for the Business Manager services the same as or similar to the Services or any individual Service, but that in any event Service Provider shall be permitted to perform the Services or any individual Service for any other parties.

ARTICLE III
TERM AND TERMINATION

3.1 Subject to the termination provisions set forth in this Article III, this Agreement shall continue for an initial period of four (4) years from the Effective Date (“Initial Services Term) and shall be automatically renewed for consecutive three (3) year terms thereafter (each an “Additional Services Term”) unless earlier terminated as hereafter provided.

3.2 At any time during the Initial Services Term or at any time during an Additional Services Term, the Business Manager may terminate this Agreement for cause (i.e., a material default by Service Provider hereunder) upon ten (10) days’ prior written notice to Service Provider; provided, however, that prior to exercising its rights under this Section 3.2 , the Business Manager shall notify Service Provider of any default, and Service Provider shall have thirty (30) days after receipt of the notice to cure the default to the Business Manager’s reasonable satisfaction. As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for the Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.

3.3 At any time during the Initial Services Term or during an Additional Services Term, the Business Manager shall have the right to terminate this Agreement, without cause, by providing not less than sixty (60) days’ prior written notice to Service Provider of any election to so terminate and specifying the effective date of such termination; provided, however, in such event, Service Provider shall be entitled to and shall be paid a termination fee equal to the product of: (a) the average monthly compensation, set forth on Exhibit A, for the six (6) months immediately preceding the month in which the Service Provider is served the termination notice from the Business Manager, multiplied by (b) six (6) (“Termination Fee”). The Termination Fee shall be paid on the effective date of such termination with a credit to Business Manager for compensation paid to Service Provider for the period from the date of Service Provider’s receipt of the termination notice to and including the effective date of such termination.

3.4 Provided that Service Provider is not providing or is terminating such Services to all other clients of Service Provider, and no affiliate of Service Provider is providing or is undertaking to provide such Services, Service Provider, at any time during the Initial Services Term or during an Additional





Services Term, may elect to limit one or more of the Services it is providing to the Business Manager upon not less than sixty (60) days’ prior written notice to the Business Manager, specifying the effective date such Services shall no longer be performed and describing in reasonable detail the Services to be terminated. As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement

3.5 If at any time during the Initial Services Term or any Additional Services Term the REIT has had a Change of Control, as hereinafter defined, Service Provider shall have the right to terminate this Agreement, without cause, upon written notice to Business Manager. At any time during the Initial Services Term or any Additional Services Term, and the REIT has not had a Change of Control, Service Provider shall have the right to terminate this Agreement, without cause, by providing not less than one hundred eighty (180) days’ prior written notice to the Business Manager, specifying the effective date of such termination. The foregoing notwithstanding, Service Provider, upon ten (10) days’ prior written notice to the Business Manager, may terminate this Agreement, or decline to provide a particular Service hereunder upon the occurrence of any of the following events:

(a) The Business Manager fails, in the absence of a bona fide dispute with respect to any payment, to make payment for Services on its due date; provided, however, the Business Manager may cure the breach up to three (3) times per calendar year by making payment within ten (10) days of the Business Manager’s receipt of written notice that it failed to make the payment when due;

(b) The Business Manager requests that Service Provider provide Services that in the Service Provider’s opinion would violate any applicable law or the rules of any regulatory body with jurisdiction and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid opinion;

(c) The Business Manager requests that Service Provider take any action that in the Service Provider’s opinion would result in the commission of a fraud upon any person or party and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid opinion;

(d) The Business Manager requests that Service Provider take any action that, upon the advice of counsel to Service Provider, could subject Service Provider to liability or material damages in civil litigation and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid advice of counsel; or

(e) The Business Manager requests that Service Provider provide Services that upon advice of counsel to Service Provider would cause Service Provider or any of its employees to be in violation of its professional code of ethics or other ethical standards the Service Provider or any of its employees is subject to and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s counsel’s advice.

As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement

3.6 Upon any termination of this Agreement or cessation of Services arising under Sections 3.2 or 3.4 of this Agreement, during the Initial Services Term or any Additional Services Term, Service Provider shall provide the Business Manager with a reasonable opportunity to transition any terminated Services to any replacement provider(s) designated by the Business Manager (“Replacement Provider”), which period shall not be more than sixty (60) days from the date of termination of this Agreement or specified terminated Services (the “Transition Period”). During the Transition Period, Service Provider shall use reasonable efforts to avoid causing any unnecessary interruption of the terminated Services so as to





provide a smooth transition of such Services (the “Transition”). All services related to Transition shall be deemed Services and subject to the charges and fees set forth in Exhibit A attached hereto.

3.7 For the purposes hereof, the term “Change of Control” shall mean the occurrence of any one or more of the following:

(a)

Any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the REIT to any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended; provided, however, that any sale, lease, exchange or transfer to (including, without limitation, any merger or other business combination with or into) any of the following shall not constitute a Change of Control: (i) any affiliate controlled by the REIT, (ii) Inland Real Estate Corporation, (iii) Inland American Real Estate Trust, Inc., (iv) The Inland Group, Inc., or (v) any affiliate controlled by any of the entities listed in clauses (i) through (iv) above (all of the entities described in clauses (i) through (v) above are hereinafter sometimes referred to as the “Inland Companies”;

(b)

The approval by the holders of the outstanding shares of the REIT of any plan or proposal for the liquidation or dissolution of the REIT; or

(c)

Any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (other than any one or more of the Inland Companies) shall become the owner, directly or indirectly, beneficially or of record, of shares of the REIT representing more than twenty-five percent (25%) of the aggregate ordinary voting power represented by the issued and outstanding common shares of the REIT.

ARTICLE IV
INTERNAL CONTROL PROCEDURES

As a public entity, REIT is required to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as may be amended from time to time (“Section 404”). Notwithstanding anything to the contrary contained in this Agreement (including, without limitation, Article III and Section 8.4 hereof), if the Business Manager shall determine that, to provide services to and for the benefit of the Business Manager and REIT, Service Provider must comply with the requirements of Section 404, then the Business Manager and Service Provider shall develop and implement an internal control plan or other processes and procedures (or amend and revise any existing internal control plan, processes and procedures) to comply with the requirements (collectively, the “Internal Control Plan”). Once developed and implemented, Service Provider shall use its reasonable best efforts to have its internal controls comply in all respects with the requirements of Section 404. The cost and expense of development and initial implementation of any Internal Control Plan shall be borne by all clients of Service Provider that require Service Provider to comply with Section 404. Upon determination that an Internal Control Plan must be developed and implemented, Service Provider, the Business Manager and all other clients of Service Provider requiring Service Provider to comply with Section 404 shall, in good faith, negotiate an equitable allocation of the costs and expenses of the development and implementation of the Internal Control Plan between and among the parties. The foregoing provisions regarding payment and allocation of the costs and expenses of development and implementation of any Internal Control Plan shall not apply to any Internal Control Plan developed and implemented, or in the process of being developed and implemented, on or prior to the date of this Agreement.

ARTICLE V
PAYMENT

Service Provider shall invoice the Business Manager monthly (or any other basis as reasonably agreed to by the Business Manager) for any Services performed during the immediately preceding





calendar month (or any other period agreed to by the Business Manager). Payment shall be due thirty (30) days after the date of the Business Manager’s receipt of the same and shall be as provided in Section 2 of Exhibit A attached hereto. The compensation to be paid by the Business Manager under this Article V and Section 2 of Exhibit A attached hereto shall constitute full and complete payment for any and all services rendered and performed by Service Provider under and pursuant to this Agreement, which compensation includes any and all labor, costs and expenses incurred or to be incurred by Service Provider in connection with its performance of the Services.

ARTICLE VI
RIGHT TO AUDIT

Service Provider shall keep and make available for the examination and audit of or by the Business Manager, or the Business Manager’s authorized employees, agents or representatives during normal business hours, and upon reasonable notice, at the Business Manager’s cost, all data, materials and information, including but not limited to records of all receipts, costs and disbursements made by Service Provider with respect to the Services and all Operating Expenses (as defined in Exhibit A attached hereto), all books, accounts, memoranda, files and all or any other documents indicating, documenting, verifying or substantiating the cost and appropriateness of any and all costs, expenditures and receipts relating to the Services and/or Operating Expenses. Service Provider shall allow the Business Manager (and any of the Business Manager’s employees, representatives, accountants and auditors) reasonable access to personnel, representatives and employees of Service Provider and all books and records and other business records and files of Service Provider that are reasonably required by the Business Manager for audit and tax matters.

ARTICLE VII
CONFIDENTIALITY

7.1 During the term of this Agreement, the parties may communicate to each other certain confidential information to enable Service Provider to perform the services hereunder, and/or Service Provider may develop confidential information for the Business Manager. Each party agrees:

(a) to treat, and to cause its employees, agents, subcontractors and representatives, if any, to treat as secret and confidential, all confidential information; and

(b) except as necessary in the performance of the Services, not to disclose any confidential information or make available any reports, recommendations and/or conclusions which Service Provider may make for the Business Manager to any person, firm or corporation without first obtaining the Business Manager’s written approval.

7.2 If any party learns that disclosure of confidential information is sought in or by a court or governmental body of competent jurisdiction or through other means, the party shall:

(a) give prompt notice to the other party prior to making the disclosure and allow the other party, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, confidential information;

(b) reasonably cooperate with the other party in its efforts to prevent, or obtain a protective order for disclosure; and

(c) disclose the minimum amount of information required to be disclosed.





ARTICLE VIII
MISCELLANEOUS

8.1 Binding Effect . This Agreement shall be binding upon, and inure to the benefit of, the successors and assigns, if any, of each party hereto.

8.2 Governing Law; Jurisdiction . This Agreement shall be subject to and governed by the internal laws of the State of Illinois without regard to principles of choice of law. The parties hereto each agree that all disputes arising hereunder shall be tried in the federal and state courts located in Cook County or DuPage County, State of Illinois, and each party hereby agrees to submit to the exclusive jurisdiction of those courts.

8.3 Waiver . Either party’s failure to exercise any right under this Agreement shall neither constitute a waiver of any other terms or conditions of this Agreement with respect to any other or subsequent breach, nor a waiver by that party of its right at any time thereafter to require exact and strict compliance with the terms of this Agreement.

8.4 Independent Contractors . The parties acknowledge and agree that they are dealing with each other hereunder as independent contractors. Nothing contained in the Agreement shall be interpreted as constituting either party to be the joint venturer or partner of the other party or as conferring upon either party the power or authority to bind the other party in any transaction with third parties.

8.5 Equitable Relief and Monetary Damages . Each party hereto recognizes and acknowledges that a breach by the other party to this Agreement will cause irreparable damage to the non-breaching party that cannot be readily remedied in monetary damages in an action at law. In the event of any default or breach by either party, the non-breaching party shall be entitled to seek immediate injunctive relief to prevent irreparable harm, loss or dilution in addition to any other remedies available. Nothing herein shall limit a non-breaching party’s right to seek monetary damages with respect to a breach.

8.6 Entire Agreement . This Agreement, including the exhibits hereto, constitutes the entire agreement between the parties and contains all of the terms and conditions of the agreement between the parties with respect to the subject matter hereof. This Agreement supersedes any and all other agreements, whether oral or written, between the parties hereto, including any Affiliates of Service Provider, with respect to the subject matter hereof. No change or modification of this Agreement shall be valid unless the same shall be in writing and signed by the parties hereto.

8.7 Severability . If any provisions of this Agreement, or the application of any such provisions to parties hereto, shall be held by a court of competent jurisdiction to be unlawful or unenforceable, the remaining provisions of this Agreement shall nevertheless be valid, enforceable and shall remain in full force and effect, and shall not be affected, impaired or invalidated in any manner.

8.8 Headings . The headings in this Agreement are inserted for convenience only and are not to be considered in the interpretation or construction of the provisions hereof.

8.9 Notices . All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given or delivered:

(a) when delivered personally or by commercial messenger;

(b) one (1) business day following deposit with a recognized overnight courier service, provided the deposit occurs prior to the deadline imposed by the overnight courier service for overnight delivery; or

(c) when transmitted, if sent by facsimile copy, provided confirmation of receipt is received by sender and such notice is sent by an additional method provided hereunder;





in each case above provided the notice or other communication is addressed to the intended recipient thereof as set forth below:


If to Service Provider, to:

Inland Payroll Services, Inc.
2901 Butterfield Road
Oak Brook, IL 60523
Attention: Barbara White
Facsimile: (630) 954-5693

 

 

If to the Business Manager, to:

Inland Western Retail Real Estate Advisory Services, Inc.
2901 Butterfield Road
Oak Brook, IL 60523
Attention: Roberta S. Matlin
Facsimile: (630) 218-4955

A party’s address for notice may be changed from time to time by notice given to the other party in the manner herein provided for giving notice.

8.10 Further Assurance . Each party to this Agreement agrees to execute and deliver any and all documents, and to perform any and all further acts that may be reasonably necessary to carry out the provisions of this Agreement and the transactions contemplated hereby.

8.11 Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

8.12 Assignment . The Business Manager shall not assign this Agreement without the prior express written consent of the Service Provider; provided, however, if the REIT shall acquire or consolidate its business with the Business Manager, this Agreement shall be and be deemed assigned by the Business Manager to the REIT with the REIT assuming all of the obligations of Business Manager under the terms of this Agreement effective the date of such acquisition or consolidation. Service Provider shall not assign this Agreement without the prior express written consent of the Business Manager.

8.13 Furtherance of Prior Agreement . This Agreement is made in furtherance of that certain Services Agreement dated as of January 1, 2004 among the Business Manager, the Service Provider and others (“Prior Agreement”) to more fully set forth the duties and obligations of the parties hereto contemplated under the Prior Agreement. Accordingly, this Agreement shall supersede the Prior Agreement in all respects in connection agreements of the parties hereto made in this Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.


THE BUSINESS MANAGER:

 

SERVICE PROVIDER:

 

 

 

INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC., an Illinois corporation

 

INLAND PAYROLL SERVICES, INC.,
an Illinois corporation

By: 


/s/ Brenda Gail Gujral

 

By: 


/s/ Barbara N. White

Name: 

Brenda Gail Gujral

 

Name: 

Barbara N. White

Its: 

Vice President

 

Its: 

President






EXHIBIT A

1. Services : The services to be provided under this Agreement shall be provided on an on-going, continuous basis unless otherwise requested by the Business Manager. Service Provider agrees to provide to the Business Manager the types, kinds and nature of any and all services provided to the Business Manager personnel services, including, but not limited to, the following:

(a)

Pre-Employment Services

·

Compile job descriptions and placement of help wanted ads

·

Pre-screening interviews

·

Skill testing

·

Drug testing administration

·

Background investigation

(b)

New Hire Services

·

Compliance of New Hire Reporting Act

·

Completion of mandatory Immigration 1-9 forms

·

Overview of employee handbook

·

Explanation of employee benefits

·

Review of sexual harassment policy

(c)

Human Resources Services

·

Coaching and counseling of employees

·

Assistance with disciplinary matters

·

Policy interpretation

·

Unemployment administration

·

Maintain employee file and database records

·

Representation at job fairs

·

Performance evaluation training

(d)

Benefit Administration Services

·

Inform and enroll new employees

·

Assistance with claim problems

·

Compliance of COBRA, HIPPA, and ERISA Requirements

·

FMLA tracking

·

Review of 401 (k) Funds

·

Workers Compensation

(e)

Payroll And Tax Administration Services

·

Maintain timekeeping records



A-8




·

Process bi-weekly payroll

·

Tax filing services and annual W-2’s

·

Ensure compliance with wage and tax laws

·

Tracking of benefit hours

·

Garnishments and child support orders

2. Compensation: Service Provider shall be paid for all services rendered under this Agreement as follows:

(a) The only compensation, costs, expenses, charges and disbursements to be charged by and paid to Service Provider (monthly) for the Services shall be the sum of: (1) the greater of (A) the product of (i) the number of employees employed by the Business Manager as of the last business day of the calendar month to which the applicable invoice applies, multiplied by (ii) the number of bi-weekly pay periods that end during the calendar month to which the applicable invoice applies, multiplied by (iii) Thirty and No/100 Dollars ($30.00), and (2) the product of (i) the number of states (other than the State of Illinois) in which the Business Manager employs personnel multiplied by (ii) Twenty Five and No/100 Dollars ($25.00).

(b) The aforementioned billing rates shall be subject to change by Service Provider on an annual basis (as of January 1 of each calendar year), provided, however, that the billing rates charged by Service Provider hereunder shall be no greater than the billing rates charged to any other client of Service Provider. Service Provider represents that, to its knowledge, the rates and other charges payable by the Business Manager under this Agreement do not and shall not exceed the market rate for similar services provided to companies of size, nature and business similar to the Business Manager or REIT. If the Business Manager determines that any of the rates and/or other amounts charged by Service Provider under this Agreement shall exceed the market rate for similar services provided to companies of size, nature and business similar to the Business Manager or REIT, then the Business Manager and Service Provider shall negotiate in good faith to adjust the rates and other amounts to market





A-9


EXHIBIT 10.551

EXECUTION COPY

AMENDMENT TO PERSONNEL SERVICES AGREEMENT

This Amendment to that certain Personnel Services Agreement dated as of January 1, 2004 ("Services Agreement") made between INLAND PAYROLL SERVICES, INC. (n/k/a Inland Human Resource Services, Inc.)("Service Provider"), an Illinois corporation, and  INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC. ("Business Manager"), an Illinois corporation, is made as of November 15, 2007 by the parties to the Services Agreement.

In consideration of the agreements to be made herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

1.

Section 2.2 of the Services Agreement is hereby deleted in its entirety and in lieu thereof the following is inserted:

"2.2  The Business Manager and Service Provider acknowledge that the Services to be provided by Service Provider hereunder are to be provided on a non-exclusive basis such that  Business Manager shall be permitted to employ other parties to perform any one or more of the Services and that Service Provider shall be permitted to perform any one or more of the Services to other parties."

2.

Section 3.3 of the Services Agreement is hereby deleted in its entirety and in lieu thereof the following is inserted:

"3.3 At any time during the Initial Services Term or during an Additional Services Term, the Business Manager shall have the right to terminate this Agreement, without cause, by providing not less than one hundred eighty (180) days’ prior written notice to Service Provider of any election to terminate and specifying the effective date of such termination."

3.

Section 3.4 of the Services Agreement is hereby amended by deleting the words "sixty (60)" set forth therein and in lieu thereof inserting the words "thirty (30)".

4.

Section 3.5 of the Services Agreement is hereby amended by deleting the first sentence thereof in its entirety and in lieu thereof the following is inserted:

"If at any time during the Initial Services Term or any Additional Services Term the REIT has had a Change of Control, as hereinafter defined, Service Provider shall have the right to terminate this Agreement, without cause, upon not less than thirty (30) days prior written notice to Business Manager."

In all other respects the Services Agreement remains in full force and effect.



1



INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC.

By:

Its:  

        

INLAND HUMAN RESOURCE SERVICES, INC.

By:

Its:  

        


















[Signature Page to Amendment to Personnel Services Agreement]

Endnotes





2





EXHIBIT 10.552


EXECUTION COPY


TRANSITION PROPERTY

DUE DILIGENCE SERVICES AGREEMENT


THIS TRANSITION PROPERTY DUE DILIGENCE SERVICES AGREEMENT (this “Agreement”) is made and entered into as of the 15 th of November, 2007, by and between INLAND WESTERN RETAIL REAL ESTATE TRUST, INC. , a Maryland corporation (“Client”), and INLAND REAL ESTATE ACQUISITIONS, INC. , Illinois corporation (“Service Provider”).


RECITALS:


A.

Client is in the business of the ownership, operation, management, leasing and development of a diversified portfolio of real estate, primarily retail, multi-tenant, office, single-user net lease properties and commercial real estate.


B.

Concurrently with the execution of this Agreement, Client acquired, through its subsidiaries and pursuant to that certain Agreement and Plan of Merger, dated as of the 14th day of August, 2007 (the “Merger Agreement”), by and among Client, IWEST Acquisition 1, Inc., IWEST Acquisition 2, Inc., IWEST Acquisition 3, Inc., IWEST Acquisition 4, Inc., Inland Western Management Corp. (“Western”), Inland Southwest Management Corp. (“Southwest”), Inland Northwest Management Corp. (“Northwest”), Inland Western Retail Real Estate Advisory Services, Inc. (“Advisor”), Inland Real Estate Investment Corporation, and IWest Merger Agent, LLC, as agent for the stockholders.


C.

Service Provider and certain of its employees have, prior to the consummation of the transactions contemplated by the Merger Agreement (collectively, the “Mergers”), provided to the Client, the services described and set forth on Exhibit A attached hereto and made a part hereof (collectively, the “Services”).


D.

Client is desirous of retaining Service Provider to provide Services for a period of time from and after the consummation of the transactions contemplated by the Merger Agreement.


E.

Service Provider is desirous of providing the Services to Client for a period of time from and after the consummation of the transactions contemplated by the Merger Agreement.


F.

Client and Service Provider wish to set forth their understanding and agreement with respect to the Services, the compensation to be paid to Service Provider by Client and other matters relating thereto, all as hereinafter provided.


NOW, THEREFORE , in consideration of the mutual covenants herein, the compensation to be paid by Client to Service Provider as herein provided, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


1.

Incorporation of Recitals .  The foregoing Recitals are, by this reference, incorporated into the body of this Agreement as if the same had been set forth herein in their entirety.


2.

Performance of Services with respect to Subject Properties .  Upon request of the Client, Service Provider agrees to provide Client with the Services in connection with evaluating and acquiring any Subject Property (as defined in the Property Acquisition Agreement, dated February 22, 2005, between Client, Service Provider and Inland Western Retail Real Estate Advisory Services, Inc. (the “Advisor”), which agreement is referred to as the “Property Acquisition Agreement”) and any other



1





property the Client desires to acquire (Subject Properties and any other property with respect to which Client requests Service Provider to provide Services shall hereinafter collectively be referred to as a “Property” or “Properties”).  Notwithstanding the foregoing or anything else contained in this Agreement, Service Provider shall be excused from providing the Services in connection with any specific Property if:


(A)

Performing the Service would violate applicable law or the rules of any regulatory body having jurisdiction over the Services;


(B)

Performing the Service would result in the commission of fraud upon any person or party;


(C)

Service Provider has a reasonable basis, upon the advice of counsel, that performing the Service could subject the Service Provider to liability or material damages in any civil litigation; or


(D)

Service Provider does not have a sufficient number of qualified personnel to provide the Services, provided that Service Provider shall use commercially reasonable efforts to eliminate and minimize the duration of any personnel shortage.


3.

Term .  The initial term ( the “Initial Term”) of this Agreement shall commence as of the date hereof (the “Commencement Date”), and, unless terminated earlier as provided in Section 4 below, automatically shall expire and terminate, unless renewed, on the first  anniversary of the Commencement Date; provided, that this Agreement shall be automatically renewed for an additional one year period (“Renewal Term”) unless either party provides notice of its intent not to renew at least 90 days prior to the expiration of the Initial Term or Renewal Term, as the case may be.


4.

Termination .  


(a)

By Client .  


(i)

For Cause .  Client may terminate this Agreement upon material default by Service Provider hereunder upon ten days prior notice to Service Provider; provided, however, that prior to exercising its rights under this Section 4(a)(i) , Client shall notify Service Provider of the alleged default, and Service Provider shall have 30 days after receipt of such notice to cure the default to Client’s reasonable satisfaction.  Upon terminating in accordance with this Section 4(a)(i) , Client shall pay Service Provider all amounts due Service Provider under Section 7 hereof.


(ii)

Without Cause .  Client may terminate this Agreement, without cause, by providing not less than 60 days prior notice (which notice shall specifically set forth the effective date of termination) to the Service Provider of such election to so terminate.  Upon terminating in accordance with this Section 4(a)(i) , Client shall, pay Service Provider all amounts due Service Provider under Section 7 hereof.


(b)

By Service Provider


(i)

For Cause .  Service Provider may terminate this Agreement, upon the occurrence of any of the following events:


a.

Client fails, in the absence of a bona fide dispute with respect to such payment, to make payment for Services on its due date, provided however, that Client may cure such breach up to three times per calendar year by making payment within 10 days of  Client’s receipt of notice that it failed to make such



2






payment when due;


b.

Client requests that Service Provider violate any applicable law or the rules of any regulatory body having jurisdiction (and Client does not promptly revoke such request upon Service Provider’s refusal to comply);


c.

Client requests that Service Provider take any action which would result in the commission of a fraud upon any person or party (and Client does not promptly revoke such request upon Service Provider’s refusal to comply);


d.

Client requests that Service Provider take any action that, upon the advice of counsel to Service Provider, could subject the Service Provider to liability or material damages in a civil litigation (and Client does not promptly revoke such request upon Service Provider’s refusal to comply); or


e.

A Change of Control (hereinafter defined).


(ii)

For the purposes hereof, the term “Change of Control” shall mean the occurrence of any one or more of the following:


(a)

Any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of Client to any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended; provided, however , that any sale, lease, exchange or transfer to (including, without limitation, any merger or other business combination with or into) any of the following shall not constitute a Change of Control:  (i) any affiliate controlled by Client, (ii) Inland Real Estate Corporation, (iii) Inland American Real Estate Trust, Inc., (iv) The Inland Group, Inc., or (v) any affiliate controlled by any of the persons or entities listed in clauses (i) through (v) above (all of the persons and entities described in clauses (i) through (v) above to be hereinafter sometimes referred to as the “Inland Companies”);


(b)

The approval by the holders of the outstanding shares of Client of any plan or proposal for the liquidation or dissolution of Client;


(c)

Any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (other than any one or more of the Inland Companies) shall become the owner, directly or indirectly, beneficially or of record, of shares of Client representing more than 25% of the aggregate ordinary voting power represented by the issued and outstanding common shares of Client; or


(d)

Following any change in the composition of the board of directors of Client, a majority of the board of directors of Client are not a combination of either (i) members of the board of directors of Client as of the date hereof, or (ii) members of the board of directors of Client whose nomination for election or election to the board of directors of Client has been recommended, approved or ratified by at least 80% of the board of directors of Client then in office who were either members of the board of directors of Client as of the date hereof or whose election as a member of the board of directors of Client was previously so approved pursuant to this clause (ii)



3







5.

Independent Contractor .

Service Provider’s status shall be that of an independent contractor, and not that of an agent or employee of Client.  Service Provider shall not hold itself out as an employee or agent of Client except as contemplated by any other Ancillary Agreement.


6.

Intentionally Omitted .


7.

Payment .  For all Services provided and rendered under and pursuant to this Agreement, Client shall pay to Service Provider the following:


(a)

Any and all reasonable, third party out-of-pocket costs incurred by Service Provider in connection with performing Services hereunder (“Third Party Costs”);


(b)

With respect to each Subject Property, the acquisition of which the Company elects to pursue, a non-accountable administrative overhead expense reimbursement equal to $11,500 (“Overhead Costs”);


(c)

For Properties with respect to which the Company specifically requests Acquisitions to negotiate the business terms of a letter of intent, letter agreement or agreement of purchase and sale, a non-accountable administrative overhead expense reimbursement equal to $25,000 (“Negotiation Costs”); and


(d)

For Properties with respect to which the Company specifically requests Services to be provided pursuant to this Agreement, a non-accountable due diligence cost reimbursement equal to $7,000 (“Due Diligence Costs”).  


Notwithstanding the foregoing, if, after review of a Property, Client elects not to acquire such Property and Service Provider shall offer or present such Property to another client of Service Provider, then, if such other client shall decide to pursue the acquisition of such Property, Service Provider shall refund to Client any and all Third Party Costs, Overhead Costs, Negotiation Costs and Due Diligence Costs paid by Client to Service Provider with respect to or in connection with such Property to the extent such other client reimburses Client for such costs and expenses (and Service Provider agrees to use reasonable efforts to seek such reimbursement from such other client).  Such reimbursement to Client shall be payable by Service Provider promptly after receipt by Service Provider of reimbursement from such other client.


All Third Party Costs, Overhead Costs, Negotiation Costs and Due Diligence Costs payable by Client to Service Provider under and pursuant to this Agreement shall be due and payable within 30 days of Client’s receipt of an invoice therefor (together with invoices from the third party service providers for the Third Party Costs).  The compensation to be paid by Client under this Section 7 shall constitute full and complete payment for any and all services rendered and performed by Service Provider (including the cost of any and all labor) under and pursuant to this Agreement.


8.

Right to Audit .  If required by Client’s auditors, Service Provider shall keep and make available for the examination and audit of or by Client, or Client’s authorized employees, agents or representatives during normal business hours at Client’s cost, all data, materials, books, records, receipts, accounts and other information substantiating and verifying any and all reasonable, third party out-of-pocket costs incurred by Service Provider in connection with performing Services hereunder.  Client shall have the right to conduct such examination and audit, no more than two times per calendar year, as part of an examination and audit, on an aggregate basis, of the services provided under, and the books, records, files and other matters of all of the companies providing services under, the services agreements set forth on Exhibit B attached hereto and made a part hereof.




4






9.

Confidentiality .  During the term of this Agreement, the parties may communicate to each other certain confidential information to enable Service Provider to perform the services hereunder, or Service Provider may develop confidential information for Client.  Each party agrees (i) to treat, and to cause its employees, agents, subcontractors and representatives, if any, to treat as secret and confidential, all such information, and (ii) except as necessary in the performance of the Services, not to disclose any such confidential information or make available any reports, recommendations or conclusions which Service Provider may make for Client to any person, firm or corporation without first obtaining Client’s written approval.  The foregoing shall not prohibit or restrict any party from disclosing any information:  (a) the disclosure of which is necessary to comply with any applicable laws, including, without limitation, federal or state securities laws, or any exchange listing or similar rules and regulations; (b) the disclosure of which is ordered pursuant to a subpoena or other order from a court or governmental body of competent jurisdiction; (c) such information is now, or hereafter is made, generally available to the public other than by disclosure in violation of this Agreement; (d) such information was disclosed to the disclosing party by a third party that the disclosing party, in good faith, believes was not bound by an obligation of confidentiality; or (vi) the parties hereto consent to the form and content of any such disclosure.  If any party learns that disclosure of such information is sought in or by a court or governmental body of competent jurisdiction or through other means, such party shall (1) give prompt notice to the other party prior to making such disclosure and allow such other party, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information, (2) reasonably cooperate with such other party in its efforts to prevent, or obtain a protective order for, such disclosure, and (3) disclose the minimum amount of information required to be disclosed.


10.

Property Status Meetings .  Representatives of Client may attend and participate in the regularly scheduled acquisition meetings held by Service Provider to discuss properties marketed or advertised for sale or the status of the potential acquisition of properties.


11.

Notices .  Any notices, demands and other communications to be delivered hereunder shall be in writing and shall be deemed to have been duly given (a) when delivered, if personally delivered, or (b) one business day after delivery to a nationally recognized, overnight courier service guaranteeing next day delivery, delivery charges prefixed, if given by such service, and addressed as follows:  (i) If to Service Provider:  Inland Real Estate Acquisitions, Inc., 2901 Butterfield Road, Oak Brook, Illinois 60523, Attention:  G. Joseph Cosenza, with a  separate copy to The Inland Real Estate Group, Inc., 2901 Butterfield Road, Oak Brook, Illinois 60523, Attention:  Robert H. Baum; and (ii) If to Client: Inland Western Retail Real Estate Trust, Inc., 2907 Butterfield Road, Oak Brook, Illinois 60523 Attention: Steven P. Grimes.  Either party may change the addresses set forth for it herein upon written notice thereof to the other.


12.

Assignment .

Except as otherwise provided in this Agreement, neither Client nor Service Provider shall assign, subcontract or delegate all of any part of its rights or obligations hereunder without the other party’s prior written approval (which shall not be unreasonably withheld or delayed), and any attempt to do so shall be null and void.


13.

Binding Effect .  Subject to the provisions of Section 12 above, this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties hereto.


14.

Waiver .

No delay or omission on the part of any party hereto in exercising any right hereunder shall operate as a waiver of such right or any other right under this Agreement.


15.

Headings .

The Article and Section headings used herein are for reference and convenience only and shall not limit or control any term or provision of this Agreement or the interpretation or construction thereof.


16.

Force Majeure .

No liability shall result from the delay or nonperformance of



5






Services caused by circumstances beyond the control of the Service Provider, including without limitation Act of God, fire, flood, snowstorm, war, acts of terrorism, government action, riot, civil disturbance, accident, inability to obtain labor, material, or equipment (“Force Majeure”).  During periods of Force Majeure, Services so affected by such Force Majeure may be eliminated without liability, but this Agreement shall remain otherwise unaffected.  Timely notice of Force Majeure and its expected duration shall be given by the affected party to the other, and the party whose performance is affected by a Force Majeure event will use



6






commercially reasonable efforts to avoid, remove or minimize the impact of such event on the performance of its obligations at the required level at the earliest possible date.


17.

Applicable Law .

This Agreement shall be entered into and construed in accordance with the internal laws of the State Illinois.


18.

Schedules, Attachments, Exhibits .  All schedules, attachments and exhibits, if any, referred to in or attached to this Agreement are and shall be deemed to be an integral part of this Agreement as if fully set forth herein.


19.

Entire Agreement; Amendment .  This Agreement, together with Property Acquisition Agreement and the schedules, attachments and exhibits referred to herein, constitute the entire agreement between the parties hereto with respect to the subject matter hereof, and this Agreement and the Property Acquisition Agreement supersede all prior and contemporaneous proposals, agreements, memoranda, understandings, negotiations and discussions, whether written or oral, of the parties in connection with the subject matter hereof.  No change, amendment or modification of this Agreement shall be binding or enforceable unless in writing and executed by the party to be bound thereby.


20.

Survival .  The obligations of Client and Service Provider under Sections 7, 8, 9, 17 hereof shall survive the expiration or other termination of this Agreement.


21.

Severability .  The various terms, provisions and covenants herein contained shall be deemed to be separate and severable, and the invalidity or unenforceability of any of them shall in no manner affect or impair the validity or enforceability of the remainder hereof.


22.

Counterparts . This Agreement may be signed in two or more counterparts, each of which shall be treated as an original but which, when taken together, shall constitute one and the same instrument.  A signed facsimile copy of this Agreement shall constitute an original for all purposes.


[SIGNATURES ON FOLLOWING PAGE]



7





IN WITNESS WHEREOF , the parties hereunto have executed this Transition Property Due Diligence Services Agreement as of the day and year first written above.



CLIENT :


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC. , a Maryland corporation



By:

     

Name:

     

Its:

     



SERVICE PROVIDER :


INLAND REAL ESTATE ACQUISITIONS, INC. , an Illinois corporation      


      

By:

Name:

Title:























[Signature Page to Transition Property Due Diligence Services Agreement]








EXHIBIT A


1.

Services :  The services to be provided under this Agreement shall be of the same nature and type provided by Service Provider to Client prior to the Merger.  Specifically:  


·

Negotiate the business terms of letters of intent, letter agreements, agreements of purchase and sale or other agreements relating to the potential acquisition of a Subject Property.  In the event that Client pursues the acquisition of a Subject Property, and Client also engages Service Provider under and pursuant to this Agreement to negotiate a letter of intent, purchase and sale agreement or other acquisition agreement in connection therewith, Service Provider shall, reasonably and in good faith, negotiate such agreement within the acquisition guidelines and parameters adopted or promulgated by Client from time to time (the “Client Acquisition Guidelines”), and shall keep Client apprised of the status and progress of all such negotiations.  Upon the request of Service Provider, Client shall provide Service Provider with the then current Client Acquisition Guidelines.


·

Analyze whether the Property is of a type, nature and quality that is comparable to or commensurate with the portfolio of properties owned and managed by Client.


·

Prepare Service Provider’s standard preliminary and final pro forma analysis (“deal sheet”) for each Subject Property and provide copies of the deal sheet to Client at a reasonable time prior to Client presenting the Subject Property to it’s board of directors.


·

Provide due diligence analysis, review and investigation with respect to any Property acquired or sought to be acquired by Client of the type and nature performed by Service Provider prior to the Merger.  Specifically, gathering, assembling and distributing any and all information received by Service Provider from third parties and relating to a Property upon request of the Client or ordering and reviewing from a business (not a legal perspective) any tests, appraisals and reports, leases, lease amendments or guaranties, service contracts, warranties, material title documents and other agreements relating to the ownership, operation, leasing and management of a Property, and advising Client of concerns or issues identified by Service Provider (collectively, “Due Diligence Documents”).


·

Document coordination and property transition with property management companies.


·

Deliver copies or originals to Client of any and all Due Diligence Documents relating to a particular Property at the time Client acquires the particular Property.


·

Coordinate closing of, from a business (not a legal) perspective, properties, including preparing, reviewing and approving closing and proration statements.








EXHIBIT B


SERVICES AGREEMENTS



1.

Office and Facilities Management Services Agreement, dated February 10, 2005, among the Advisor, Inland Office Management and Services, Inc., and Inland Facilities Management, Inc.


2.

Communications Services Agreement, dated January 1, 2004, between the Advisor and Inland Communications, Inc.


3.

Personnel Services Agreement, dated January 1, 2004, between the Advisor and Inland Payroll Services, Inc.


4.

Property Tax Services Agreement, dated January 1, 2004, between the Advisor and Investors Property Tax Services, Inc.


5.

Computer Services Agreement, dated January 1, 2004, between the Advisor and Inland Computer Services, Inc.


6.

Insurance and Risk Management Services Agreement, dated January 1, 2004, between the Advisor and Inland Risk and Insurance Management Services, Inc.






Exhibit 10.553

PROPERTY TAX SERVICES AGREEMENT

This Property Tax Services Agreement (this “Agreement”), dated as of January 1, 2004 (the “Effective Date”), is entered into by and between INVESTORS PROPERTY TAX SERVICES, INC., an Illinois corporation (“Service Provider”) and INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC., an Illinois corporation (the “Business Manager”).

RECITALS

WHEREAS, Service Provider is in the business of providing certain property tax services, including without limitation, the property tax services described and set forth in Exhibit A hereto (collectively, the “Services”); and

WHEREAS, the Business Manager is desirous of retaining Service Provider to perform the Services for the Business Manager in connection with the Real Estate Business (as defined herein) for the benefit of REIT (as defined herein) and/or its Affiliates (as defined herein), and Service Provider is willing to perform the Services, subject to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and obligations set forth below, the parties hereto, intending to be legally bound, agree to the foregoing and as follows:

ARTICLE I
DEFINITIONS

“‘Affiliate” shall mean, except as otherwise provided herein, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meaning, the terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of that Person through the ownership of voting securities, by contract or otherwise. With respect to the Business Manager, any entity representing a joint venture or similar arrangement in which the Business Manager, or an entity controlled by the Business Manager, is the general partner or managing member shall be deemed to be an “Affiliate” of the Business Manager.

“Business Management Agreement” shall mean that certain Advisory Agreement, dated as of September 18, 2003, as amended from time to time, between the Business Manager and REIT.

“Person” shall mean an individual, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Real Estate Business” shall mean (i) any business activities conducted by REIT so long as REIT remains qualified as a “real estate investment trust” under Section 856 the Internal Revenue Code of 1986, as amended, and (ii) any business that is consistent with and limited to the description of the business of REIT contained in the prospectus forming a part of the Registration Statement on Form S-11 (No. 333-122743), as amended, filed by REIT with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended.

“REIT” shall mean Inland Western Retail Real Estate Trust, Inc., a Maryland corporation.





ARTICLE II
PERFORMANCE OF SERVICES

2.1 Service Provider agrees to perform the Services for the Business Manager in connection with the Real Estate Business of the REIT and/or its or their Affiliates. Service Provider shall perform and provide the Services in a professional manner and in accordance with all laws, statutes, ordinances, codes, rules and regulations applicable to the Services. Service Provider, at Business Manager’s cost, may employ, contract with or use the service of any third party in connection with the performance of the Services as the Service Provider deems reasonably necessary or desirable, including independent, outside counsel.

2.2 The Business Manager and Service Provider acknowledge that the relationship created hereby is on an exclusive basis as to Business Manager such that during the Initial Services Term and any Additional Services Term (except during any period that Service Provider is in default hereunder), (x) the Business Manager shall be required to retain only the Service Provider to perform all of the Services or any individual Service, (y) the Business Manager shall not be permitted to retain third parties to perform for the Business Manager services the same as or similar to the Services or any individual Service, but that in any event Service Provider shall be permitted to perform the Services or any individual Service for any other parties.

ARTICLE III
TERM AND TERMINATION

3.1 Subject to the termination provisions set forth in this Article III , this Agreement shall continue for an initial period of four (4) years from the Effective Date (“Initial Services Term) and shall be automatically renewed for consecutive three (3) year terms thereafter (each an “Additional Services Term”) unless earlier terminated as hereafter provided.

3.2 At any time during the Initial Services Term or at any time during an Additional Services Term, the Business Manager may terminate this Agreement for cause (i.e., a material default by Service Provider hereunder) upon ten (10) days’ prior written notice to Service Provider; provided, however, that prior to exercising its rights under this Section 3.2, the Business Manager shall notify Service Provider of any default, and Service Provider shall have thirty (30) days after receipt of the notice to cure the default to the Business Manager’s reasonable satisfaction. As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for the Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.

3.3 At any time during the Initial Services Term or during an Additional Services Term, the Business Manager shall have the right to terminate this Agreement, without cause, by providing not less than sixty (60) days’ prior written notice to Service Provider of any election to so terminate and specifying the effective date of such termination; provided, however, in such event, Service Provider shall be entitled to and shall be paid a termination fee equal to the product of: (a) the average monthly compensation, set forth on Exhibit A, for the six (6) months immediately preceding the month in which the Service Provider is served the termination notice from the Business Manager, multiplied by (b) six (6) (“Termination Fee”). The Termination Fee shall be paid on the effective date of such termination with a credit to Business Manager for compensation paid to Service Provider for the period from the date of Service Provider’s receipt of the termination notice to and including the effective dale of such termination.

3.4 Provided that Service Provider is not providing or is terminating such Services to all other clients of Service Provider, and no affiliate of Service Provider is providing or is undertaking to provide such Services, Service Provider, at any time during the Initial Services Term or during an Additional





Services Term, may elect to limit one or more of the Services it is providing to the Business Manager upon not less than sixty (60) days’ prior written notice to the Business Manager, specifying the effective date such Services shall no longer be performed and describing in reasonable detail the Services to be terminated. As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.

3.5 If at any time during the Initial Services Term or any Additional Services Term the REIT has had a Change of Control, as hereinafter defined, Service Provider shall have the right to terminate this Agreement, without cause, upon written notice to Business Manager. At any time during the Initial Services Term or any Additional Services Term, and the REIT has not had a Change of Control, Service Provider shall have the right to terminate this Agreement, without cause, by providing not less than one hundred eighty (180) days’ prior written notice to the Business Manager, specifying the effective date of such termination. The foregoing notwithstanding, Service Provider, upon ten (10) days’ prior written notice to the Business Manager, may terminate this Agreement, or decline to provide a particular Service hereunder upon the occurrence of any of the following events:

(a) The Business Manager fails, in the absence of a bona fide dispute with respect to any payment, to make payment for Services on its due date; provided, however, the Business Manager may cure the breach up to three (3) times per calendar year by making payment within ten (10) days of the Business Manager’s receipt of written notice that it failed to make the payment when due;

(b) The Business Manager requests that Service Provider provide Services that in the Service Provider’s opinion would violate any applicable law or the rules of any regulatory body with jurisdiction and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid opinion;

(c) The Business Manager requests that Service Provider take any action that in the Service Provider’s opinion would result in the commission of a fraud upon any person or party and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid opinion;

(d) The Business Manager requests that Service Provider take any action that, upon the advice of counsel to Service Provider, could subject Service Provider to liability or material damages in civil litigation and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s aforesaid advice of counsel; or

(e) The Business Manager requests that Service Provider provide Services that upon advice of counsel to Service Provider would cause Service Provider or any of its employees to be in violation of its professional code of ethics or other ethical standards the Service Provider or any of its employees is subject to and the Business Manager does not promptly withdraw the request upon Service Provider’s notice to the Business Manager of Service Provider’s counsel’s advice.

As full compensation to which Service Provider shall be entitled, the Business Manager shall promptly make payment to Service Provider as provided in Article V below for Services performed prior to the effective date of termination in compliance with the terms and provisions of this Agreement.

3.6 Upon any termination of this Agreement or cessation of Services arising under Sections 3.2 or 3.4 of this Agreement, during the Initial Services Term or any Additional Services Term, Service Provider shall provide the Business Manager with a reasonable opportunity to transition any terminated Services to any replacement provider(s) designated by the Business Manager (“Replacement Provider”), which period shall not be more than sixty (60) days from the date of termination of this Agreement or specified terminated Services (the “Transition Period”). During the Transition Period, Service Provider shall use reasonable efforts to avoid causing any unnecessary interruption of the terminated Services so as to





provide a smooth transition of such Services (the “Transition”). All services related to Transition shall be deemed Services and subject to the charges and fees set forth in Exhibit A attached hereto.

3.7 For the purposes hereof, the term “Change of Control” shall mean the occurrence of any one or more of the following:

(a)

Any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the REIT to any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended; provided, however, that any sale, lease, exchange or transfer to (including, without limitation, any merger or other business combination with or into) any of the following shall not constitute a Change of Control: (i) any affiliate controlled by the REIT, (ii) Inland Real Estate Corporation, (iii) Inland American Real Estate Trust, Inc., (iv) The Inland Group, Inc., or (v) any affiliate controlled by any of the entities listed in clauses (i) through (iv) above (all of the entities described in clauses (i) through (v) above are hereinafter sometimes referred to as the “Inland Companies”;

(b)

The approval by the holders of the outstanding shares of the REIT of any plan or proposal for the liquidation or dissolution of the REIT; or

(c)

Any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (other than any one or more of the Inland Companies) shall become the owner, directly or indirectly, beneficially or of record, of shares of the REIT representing more than twenty-five percent (25%) of the aggregate ordinary voting power represented by the issued and outstanding common shares of the REIT.

ARTICLE IV
INTERNAL CONTROL PROCEDURES

As a public entity, REIT is required to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as may be amended from time to time (“Section 404”). Notwithstanding anything to the contrary contained in this Agreement (including, without limitation, Article III and Section 8.4 hereof), if the Business Manager shall determine that, to provide services to and for the benefit of the Business Manager and REIT, Service Provider must comply with the requirements of Section 404, then the Business Manager and Service Provider shall develop and implement an internal control plan or other processes and procedures (or amend and revise any existing internal control plan, processes and procedures) to comply with the requirements (collectively, the “Internal Control Plan”). Once developed and implemented, Service Provider shall use its reasonable best efforts to have its internal controls comply in all respects with the requirements of Section 404. The cost and expense of development and initial implementation of any Internal Control Plan shall be borne by all clients of Service Provider that require Service Provider to comply with Section 404. Upon determination that an Internal Control Plan must be developed and implemented, Service Provider, the Business Manager and all other clients of Service Provider requiring Service Provider to comply with Section 404 shall, in good faith, negotiate an equitable allocation of the costs and expenses of the development and implementation of the Internal Control Plan between and among the parties. The foregoing provisions regarding payment and allocation of the costs and expenses of development and implementation of any Internal Control Plan shall not apply to any Internal Control Plan developed and implemented, or in the process of being developed and implemented, on or prior to the date of this Agreement.

ARTICLE V
PAYMENT

Service Provider shall invoice the Business Manager monthly (or any other basis as reasonably agreed to by the Business Manager) for any Services performed during the immediately preceding





calendar month (or any other period agreed to by the Business Manager). Payment shall be due thirty (30) days after the date of the Business Manager’s receipt of the same and shall be as provided in Section 2 of Exhibit A attached hereto. The compensation to be paid by the Business Manager under this Article V and Section 2 of Exhibit A attached hereto shall constitute full and complete payment for any and all services rendered and performed by Service Provider under and pursuant to this Agreement, which compensation includes any and all labor, costs and expenses incurred or to be incurred by Service Provider in connection with its performance of the Services.

ARTICLE VI
RIGHT TO AUDIT

Service Provider shall keep and make available for the examination and audit of or by the Business Manager, or the Business Manager’s authorized employees, agents or representatives during normal business hours, and upon reasonable prior notice, at the Business Manager’s cost, all data, materials and information, including but not limited to records of all receipts, costs and disbursements made by Service Provider with respect to the Services and all Operating Expenses (as defined in Exhibit A attached hereto), all books, accounts, memoranda, files and all or any other documents indicating, documenting, verifying or substantiating the cost and appropriateness of any and all costs, expenditures and receipts relating to the Services and/or Operating Expenses. Service Provider shall allow the Business Manager (and any of the Business Manager’s employees, representatives, accountants and auditors) reasonable access to personnel, representatives and employees of Service Provider and all books and records and other business records and files of Service Provider that are reasonably required by the Business Manager for audit and tax matters.

ARTICLE VII
CONFIDENTIALITY

7.1 During the term of this Agreement, the parties may communicate to each other certain confidential information to enable Service Provider to perform the services hereunder, and/or Service Provider may develop confidential information for the Business Manager. Each party agrees:

(a) to treat, and to cause its employees, agents, subcontractors and representatives, if any, to treat as secret and confidential, all confidential information; and

(b) except as necessary in the performance of the Services, not to disclose any confidential information or make available any reports, recommendations and/or conclusions which Service Provider may make for the Business Manager to any person, firm or corporation without first obtaining the Business Manager’s written approval.

7.2 If any party learns that disclosure of confidential information is sought in or by a court or governmental body of competent jurisdiction or through other means, the party shall:

(a) give prompt notice to the other party prior to making the disclosure and allow the other party, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, confidential information;

(b) reasonably cooperate with the other party in its efforts to prevent or obtain a protective order for disclosure; and

(c) disclose the minimum amount of information required to be disclosed.







ARTICLE VIII
MISCELLANEOUS

8.1 Binding Effect . This Agreement shall be binding upon, and inure to the benefit of, the successors and assigns, if any, of each party hereto.

8.2 Governing Law; Jurisdiction . This Agreement shall be subject to and governed by the internal laws of the State of Illinois without regard to principles of choice of law. The parties hereto each agree that all disputes arising hereunder shall be tried in the federal and state courts located in Cook County or DuPage County, State of Illinois, and each party hereby agrees to submit to the exclusive jurisdiction of those courts.

8.3 Waiver . Either party’s failure to exercise any right under this Agreement shall neither constitute a waiver of any other terms or conditions of this Agreement with respect to any other or subsequent breach, nor a waiver by that party of its right at any time thereafter to require exact and strict compliance with the terms of this Agreement.

8.4 Independent Contractors . The parties acknowledge and agree that they are dealing with each other hereunder as independent contractors. Nothing contained in the Agreement shall be interpreted as constituting either party to be the joint venturer or partner of the other party or as conferring upon either party the power or authority to bind the other party in any transaction with third parties.

8.5 Equitable Relief and Monetary Damages . Each party hereto recognizes and acknowledges that a breach by the other party to this Agreement will cause irreparable damage to the non-breaching party that cannot be readily remedied in monetary damages in an action at law. In the event of any default or breach by either party, the non-breaching party shall be entitled to seek immediate injunctive relief to prevent irreparable harm, loss or dilution in addition to any other remedies available. Nothing herein shall limit a non-breaching party’s right to seek monetary damages with respect to a breach.

8.6 Entire Agreement . This Agreement, including the exhibits hereto, constitutes the entire agreement between the parties and contains all of the terms and conditions of the agreement between the parties with respect to the subject matter hereof. This Agreement supersedes any and all other agreements, whether oral or written, between the parties hereto, including any Affiliates of Service Provider, with respect to the subject matter hereof. No change or modification of this Agreement shall be valid unless the same shall be in writing and signed by the parties hereto.

8.7 Severability . If any provisions of this Agreement, or the application of any such provisions to parties hereto, shall be held by a court of competent jurisdiction to be unlawful or unenforceable, the remaining provisions of this Agreement shall nevertheless be valid, enforceable and shall remain in full force and effect, and shall not be affected, impaired or invalidated in any manner.

8.8 Headings . The headings in this Agreement are inserted for convenience only and are not to be considered in the interpretation or construction of the provisions hereof.

8.9 Notices . All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given or delivered:

(a) when delivered personally or by commercial messenger;

(b) one (1) business day following deposit with a recognized overnight courier service, provided the deposit occurs prior to the deadline imposed by the overnight courier service for overnight delivery; or





(c) when transmitted, if sent by facsimile copy, provided confirmation of receipt is received by sender and such notice is sent by an additional method provided hereunder;

in each case above provided the notice or other communication is addressed to the intended recipient thereof as set forth below:

 

If to Service Provider, to:

 

Investors Property Tax Services, Inc.

 

 

2901 Butterfield Road

 

 

Oak Brook, IL 60523

 

 

Attention: Elliot Kamenear

 

 

Facsimile: (630) 218-4955

 

If to the Business Manager, to:

 

Inland Western Retail Real Estate Advisory Services, Inc.

 

 

2901 Butterfield Road

 

 

Oak Brook, IL 60523

 

 

Attention: Roberta S. Matlin

 

 

Facsimile: (630) 218-4955

A party’s address for notice may be changed from time to time by notice given to the other party in the manner herein provided for giving notice.

8.10 Further Assurance . Each party to this Agreement agrees to execute and deliver any and all documents, and to perform any and all further acts that may be reasonably necessary to carry out the provisions of this Agreement and the transactions contemplated hereby.

8.11 Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

8.12 Assignment . The Business Manager shall not assign this Agreement without the prior express written consent of the Service Provider; provided, however, if the REIT shall acquire or consolidate its business with the Business Manager, this Agreement shall be and be deemed assigned by the Business Manager to the REIT with the REIT assuming all of the obligations of Business Manager under the terms of this Agreement effective the date of such acquisition or consolidation. Service Provider shall not assign this Agreement without the prior express written consent of the Business Manager.

8.13 Furtherance of Prior Agreement. This Agreement is made in furtherance of that certain Services Agreement dated as of January 1, 2004 among the Business Manager, the Service Provider and others (“Prior Agreement”) to more fully set forth the duties and obligations of the parties hereto contemplated under the Prior Agreement. Accordingly, this Agreement shall supersede the Prior Agreement in all respects in connection agreements of the parties hereto made in this Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

THE BUSINESS MANAGER:

 

SERVICE PROVIDER:

 

 

 

INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC., an Illinois corporation

 

INLAND PROPERTY TAX SERVICES, INC.,
an Illinois corporation

By: 


/s/ Brenda Gail Gujral

 

By: 


/s/ Lori Ann Ogolini







Name: 

Brenda Gail Gujral

 

Name: 

Lori Ann Ogolini

Its: 

Vice President

 

Its: 

Vice President








EXHIBIT A

1. Services : The services to be provided under this Agreement shall be provided on an on-going, continuous basis throughout the Services Term, unless otherwise requested by the Business Manager. Service Provider agrees to provide to the Business Manager property tax services, including, without limitation, the following:

(a)

Tax Reduction Services

·

Monitor, review and analyze all properties on an annual basis, and then target and prioritize properties with an assessor’s market value which is greater than that which can be supported by the property’s prior year’s performance.

·

Meetings (or coordinate with local counsel meetings) with assessors, argue before Boards of Review and other appropriate governmental authorities and levels of appeal for a reduction in market value and a corrected assessed value.

·

Meetings (or coordinate with local counsel meetings) with appraisers and obtain preliminary numbers to determine whether an appraisal will support a lower market value.

·

Supply applicable information and direction to assigned attorneys.

·

Follow up and attempt for find solutions to on-going problems and issues, such as real estate tax billings and required notification to tenants of real estate tax increases.

·

Seek new and innovative ways to obtain a lower property market value, such as purchase price allocation, filing on only selected parcels and properties.

·

Provide tax projections, tax reduction programs and tax billing backup to area managers and acquisitions personnel.

(b)

Tax Administration Services

·

Coordinate payment of real estate taxes

·

Account for all bills to be processed at any given installment, and follow up on missing bills

·

Data entry of tax amounts and equalized values when available

·

Provide copies of documents as requested and needed (follow up on cancelled checks; monitor payment by third parties;

·

communicate with interested parties; and forward tax bills to purchasers and other parties as necessary)

·

With respect to property acquisitions; research circumstances of real estate tax; copy documents as needed; establish computer records and physical files; order tax maps; and communicates with interested parties

·

With respect to plats of subdivision/annexation: contact Maps division departments for replacement tax parcel numbers; updates computer records; orders tax maps; and communicates with interested parties







·

With respect to property disposition: updates computer records and communicates with interested parties

·

With respect to property financing: updates computer records

2. Compensation : Service Provider shall be paid for all services rendered under this Agreement as follows:

(a) The compensation, costs, expenses and disbursements to be charged by Service Provider shall be the actual time (on and hourly basis, in increments of one-tenth of one hour) spent by the employees of Service Provider, at an hourly billing rate of $65.00 per hour far Lori Ann Ogolini and other highly skilled personnel, and $35.00 per hour for all other employees of Service Provider, performing any Services. From time to time upon the Business Manager’s request, Service Provider shall provide a list of all employees of Service Provider providing any of the Services under this Agreement. Additionally, the aforementioned billing rates shall be subject to change by Service Provider on an annual basis (as of January 1 of each calendar year), provided, however, that the billing rates charged by Service Provider hereunder shall be no greater than the billing rates charged to any other client of Service Provider. Each employee of Service Provider shall keep and maintain, and make available to the Business Manager upon request, a record (“Timesheets”) of all the Business Manager transactions on which each such employees work, which record shall set forth the following: (i) the specific matter worked on; (ii) the Business Manager entity for which the Services are being performed; (iii) the actual amount of time spent on the matter for the applicable calendar month and for the transaction/matter on a cumulative basis; (iv) the hourly billing rates applicable to the employee; and (v) a general description of the nature of the work and services performed. Each invoice for Service rendered by Service Provider shall include a copy of each employee’s Timesheets supporting the amount requested for payment in the invoice.

(b) At the end of each calendar year during the term of this Agreement, Service Provider shall prepare and forward to the Business Manager a statement, certified by Service Provider as being true and correct, setting forth the following: (i) the total amount of fees and other compensation paid by the Business Manager for the Services rendered under this Agreement for the applicable calendar year pursuant to Section 2(a) above (the “Paid Fees”); and (ii) the amount of Service Provider’s Operating Expenses (hereinafter defined) for the applicable calendar year (the “Annual Operating Expenses”). If, for any calendar year, the amount of Paid Fees is less than the Business Manager’s Pro Rata Share (hereinafter defined) of Annual Operating Expenses, then the Business Manager promptly shall pay to Service Provider Business Manager’s Pro Rata Share of the deficiency. If, for any calendar year the amount of Paid Fees exceeds the Business Manager’s Pro Rata Share of Annual Operating Expenses, then Service Provider promptly shall refund to the Business Manager Business Manager’s Pro Rata Share of the excess.

(c) For the purposes hereof, the “Business Manager’s Pro Rata Share” shall be a fraction, the numerator of which shall be the total number of tax parcel identification numbers (as of the end of the applicable calendar year) relating to all properties owned by the Business Manager and its subsidiaries, and the denominator of which shall be the aggregate number of tax parcel identification numbers (as of the end of the applicable calendar year) relating to all properties owned by all clients (including the Business Manager) of Service Provider.

(d) For the purposes hereof, the term “Operating Expenses shall mean any and all actual, out-of-pocket costs and expenses incurred by Service Provider in connection with







the performance and rendering of services that are the same as or substantially similar to the Services to all of Service Provider’s clients (including the Business Manager), which costs and expenses may include, without limitation or duplication: (1) the salaries, employee benefits and bonuses of its employees; (2) copy costs; (3) administrative overhead; (4) rent for office space; and (5) costs of materials and supplies. Service Provider shall keep and maintain books and records setting forth all Operating Expenses. Service Provider represents that, to its knowledge, the rates and other charges payable by the Business Manager under this Agreement do not and shall not exceed the market rate for similar services provided to companies of size, nature and business similar to Business Manager or REIT. If the Business Manager determines that any of the rates and/or other amounts charged by Service Provider under this Agreement shall exceed the market rate for similar services provided to companies of size, nature and business similar to the Business Manager or REIT, then the Business Manager and Service Provider shall negotiate in good faith to adjust the rates and other amounts to market.







EXHIBIT 99.28

EXECUTION COPY

AMENDMENT TO PROPERTY TAX SERVICES AGREEMENT

This Amendment to that certain Property Tax Services Agreement dated as of January 1, 2004 ("Services Agreement") made between INVESTORS PROPERTY TAX SERVICES, INC. ("Service Provider"), an Illinois corporation, and  INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC. ("Business Manager"), an Illinois corporation, is made as of November 15, 2007 by the parties to the Services Agreement.

In consideration of the agreements to be made herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

1.

Section 2.2 of the Services Agreement is hereby deleted in its entirety and in lieu thereof the following is inserted:

"2.2  The Business Manager and Service Provider acknowledge that the

Services to be provided by Service Provider hereunder are to be provided on a   on-exclusive basis such that  Business Manager shall be permitted to employ other   parties to perform any one or more of the Services and that Service Provider shall be   permitted to perform any one or more of the Services to other parties."

2.

Section 3.3 of the Services Agreement is hereby deleted in its entirety and in lieu thereof the following is inserted:

"3.3 At any time during the Initial Services Term or during an Additional

Services Term, the Business Manager shall have the right to terminate this Agreement,   without cause, by providing not less than one hundred eighty (180) days’ prior written   notice to Service Provider of any election to terminate and specifying the effective date   of such termination."

3.

Section 3.4 of the Services Agreement is hereby amended by deleting the words "sixty (60)" set forth therein and in lieu thereof inserting the words "thirty (30)".

4.

Section 3.5 of the Services Agreement is hereby amended by deleting the first sentence thereof in its entirety and in lieu thereof the following is inserted:

"If at any time during the Initial Services Term or any Additional Services

Term

the REIT has had a Change of Control, as hereinafter defined, Service Provider shall   have the right to terminate this Agreement, without cause, upon not less than thirty (30)   days prior written notice to Business Manager."

In all other respects the Services Agreement remains in full force and effect.



1



INLAND WESTERN RETAIL REAL ESTATE ADVISORY SERVICES, INC.

By:

Its:

        

INVESTORS PROPERTY TAX SERVICES, INC.

By:

Its:

        
































[Signature Page to Amendment to Property Tax Services Agreement]

Endnotes





2





EXHIBIT 10.555

EXECUTION COPY

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (the “ Agreement ”) is made and entered into effective as of the 15 th day of November, 2007, by and among Inland Western Retail Real Estate Trust, Inc., a Maryland corporation (the “ IWEST ”), Inland Real Estate Investment Corporation, a Delaware corporation (“ IREIC ”) and IWEST Merger Agent. LLC, as agent for the stockholders of the Management Companies (as defined herein) that are listed on Schedule A hereto (the “ Management Company Stockholders ”; each of IREIC and the Management Company Stockholders being hereinafter referred to as a “ Stockholder ” and collectively the “ Stockholders ”).

Reference is made to that certain Agreement and Plan of Merger, dated as of August 14, 2007 (the “ Merger Agreement ”), by and among IWEST, IREIC, Inland Southwest Management Corp. (“ Inland Southwest ”), Inland Northwest Management Corp. (“ Inland Northwest ”), Inland Western Management Corp. (“ Inland Western ” and together with Inland Southwest and Inland Northwest, the “ Management Companies ”), Inland Western Retail Real Estate Advisory Services, Inc. (the “ Advisor ”), certain acquisition subsidiaries of IWEST and IWEST Merger Agent LLC, as agent.  Capitalized terms used but not defined in this Agreement shall have the meanings set forth in the Merger Agreement.

W I T N E S S E T H:

WHEREAS, pursuant to the Merger Agreement, IWEST acquired from IREIC all of the outstanding equity securities of the Advisor, and IWEST acquired from the Stockholders all of the outstanding equity securities of the Management Companies, for shares of common stock, par value $.001 per share, of IWEST (the “ Common Stock ”).

WHEREAS, pursuant to the Merger Agreement, and for other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the Stockholders are being granted registration rights with respect to their shares of Common Stock.

NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration, the parties hereto agree as follows:

1.

(a)

Piggyback Registration .  If IWEST shall file a registration statement pertaining to an underwritten offering of the Common Stock (other than a registration statement on Form S-4, Form S-8, or any successor form) with the Securities and Exchange Commission (the “ Commission ”) while any Registrable Securities (as hereinafter defined) are outstanding, IWEST shall give all holders of any Registrable Securities (each, an “ Eligible Holder ” and collectively, the “ Eligible Holders ”) at least 20 days prior written notice of the filing of such registration statement.  If requested by an Eligible Holder in writing within 10 days after receipt of any such notice, IWEST shall, at IWEST’s sole expense (other than the fees and disbursements of counsel for the Eligible Holders, and the underwriting discounts and commissions, if any, payable in respect of the Registrable Securities sold by any Eligible Holder), register all or, at each Eligible Holder’s option, any portion of the Registrable Securities of any Eligible Holders who shall have made such request, concurrently with the registration of such other securities, all to the extent requisite to permit the public offering and sale of the Registrable Securities through the facilities of all appropriate securities exchanges or inter-dealer quotation systems, if any, on which IWEST’s common stock is being sold or quoted, and will use its reasonable best efforts through its officers, directors, independent public accountants, and counsel to cause such registration statement to become effective as



1



promptly as practicable, if not automatically effective upon the filing thereof.  Notwithstanding the foregoing, if the managing underwriter of any such offering shall advise IWEST that, in the opinion of the managing underwriter, the giving of such notice could adversely affect the offering of the Common Stock proposed to be sold by IWEST, no such notice shall be required and the Eligible Holders shall not have any right to participate in such underwritten offering; provided that this sentence shall not apply if the subject underwritten offering includes holders of IWEST Common Stock.  In addition, if the managing underwriter of any such offering shall advise IWEST that, in the opinion of the managing underwriter, the distribution of all or a portion of the Registrable Securities requested to be included in the registration concurrently with the securities of non-Eligible Holders to be registered by IWEST exceeds the number which can be sold in such offering without adversely affecting the marketability of the offering, IWEST will include in such registration first, the securities that were initially proposed to be registered by or on behalf of IWEST, second, the Registrable Securities requested to be included in such registration on a pro rata basis among the holders of such Registrable Securities on the basis of the number of shares which are owned at the time of the filing of the registration statement, and third, other securities requested to be included in such registration on a pro rata basis among the holders of such other equity securities on the basis of the number of shares which are owned by each such holder. As used herein, “ Registrable Securities ” shall mean the shares of Common Stock which were issued pursuant to the Merger Agreement (including any securities issuable or issued with respect thereto) and which have not been previously sold to the public pursuant to a registration statement or pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended (the “ Securities Act ”); provided, however, that Registrable Securities shall be deemed not to include Common Stock issued pursuant to the Merger Agreement to the extent that, with respect to any holder thereof, all such securities held by the holder may be sold in a single day pursuant to and in accordance with Rule 144 promulgated under the Securities Act.

(b)

Demand Registration .  If at any time after the first anniversary of this Agreement, IWEST shall receive a written request from (x) IREIC or (y) Eligible Holders (other than IREIC) who in the aggregate own at least one third of the total number of shares of Common Stock then included in the Registrable Securities (excluding for this clause (y) the Registrable Securities held by IREIC) (the “ Requisite Holders ”) to register the sale of all or part of such Registrable Securities, IWEST shall, as promptly as practicable, and in any event not later than forty-five (45) days after such request, at IWEST’s sole cost and expense (other than the fees and disbursements of counsel for the Eligible Holders, and the underwriting discounts and commissions, if any, payable in respect of the Registrable Securities sold by the Eligible Holders), prepare and file with the Commission a registration statement on Form S-3 for only the Eligible Holders, so long as either (i) such registration covers the resale of all of the Registrable Securities or (ii) the anticipated aggregate offering price contemplated by such registration is at least $50,000,000.  Within five business days after receiving any request contemplated by this Section 1(b), IWEST shall give written notice to all the other Eligible Holders, advising each of them that IWEST is proceeding with such registration and offering to include therein all or any portion of any such other Eligible Holder’s Registrable Securities, provided that IWEST receives a written request to do so from such Eligible Holder within twenty (20) days after receipt by such Eligible Holder of such registration notice from IWEST.  In the event that Form S-3 is unavailable for such a registration, IWEST shall use such other form as is available for such a registration, subject to the provisions below.  IWEST shall use its reasonable best efforts to have the registration statement declared effective by the Commission as soon as practicable.  If at any time after the first anniversary of this Agreement, Form S-3 is not available for any registration of Registrable Securities hereunder, IWEST shall (A) register the sale of the Registrable Securities on another appropriate form and (B) undertake to register the Registrable Securities on Form S-3 as soon as such form is available (a “ Replacement Registration ”), provided that IWEST shall maintain the effectiveness of the registration statement then in effect until such time as the Replacement Registration covering the Registrable Securities has been declared effective by the Commission so long as the anticipated aggregate offering price contemplated by such registration is at least $50,000,000.  Notwithstanding any provision to the contrary contained herein, IWEST shall not be obligated to effect



2



more than a total of two (2) registrations on any form during the term of this Agreement, and IWEST shall not be obligated to file any registration statement within six (6) months of the effectiveness of the previous registration statement.

(c)

In the event of a registration pursuant to the provisions of this Section 1, IWEST shall use its reasonable best efforts to cause the Registrable Securities so registered to be registered or qualified for sale under the securities or blue sky laws of such jurisdictions as an Eligible Holder who has shares which were included in such Section 1 registration may reasonably request; provided, however, that IWEST shall not be required to qualify to do business in any state by reason of this Section 1(c) in which it is not otherwise required to qualify to do business.  

(d)

IWEST shall keep effective any registration or qualification contemplated by this Section 1 and shall from time to time amend or supplement each applicable registration statement, preliminary prospectus, final prospectus, application, document and communication for such period of time as shall be required to permit the Eligible Holders to complete the offer and sale of the Registrable Securities covered thereby.  IWEST shall keep each registration statement referred to in Section 1(b) hereof effective at all times until the earlier of: (i) the date as of which all Eligible Holders named therein may sell all of their Registrable Securities without restriction pursuant to Rule 144(k) promulgated under the Securities Act (or successor thereto) or (ii) the date on which the Eligible Stockholders named therein shall have sold to the public all the Registrable Securities.

(e)

In the event of a registration pursuant to the provisions of this Section 1, promptly after each document is filed with the Commission IWEST shall furnish to each Eligible Holder such number of copies of the registration statement and of each amendment and supplement thereto (in each case, including all exhibits), such reasonable number of copies of each prospectus contained in such registration statement and each supplement or amendment thereto (including each preliminary prospectus), all of which shall conform to the requirements of the Securities Act and the rules and regulations thereunder, and such other documents as any Eligible Holder may reasonably request to facilitate the disposition of the Registrable Securities included in such registration.

(f)

In the event of a registration pursuant to the provisions of this Section 1, promptly after effectiveness IWEST shall furnish each Eligible Holder of any Registrable Securities so registered with a notice that (i) the registration statement has become effective under the Securities Act and no order suspending the effectiveness of the registration statement, preventing or suspending the use of the registration statement, any preliminary prospectus, any final prospectus, or any amendment or supplement thereto has been issued, nor has the Commission or any securities or blue sky authority of any jurisdiction instituted or threatened to institute any proceedings with respect to such an order and (ii) the registration statement and each prospectus forming a part thereof (including each preliminary prospectus), and any amendment or supplement thereto, comply as to form with the Securities Act and the rules and regulations thereunder, and with the rules and regulations of any applicable state or blue sky authority.  Such notice shall also state the jurisdictions in which the Registrable Securities have been registered or qualified for sale pursuant to the provisions of Section 1(c) hereof.

(g)

In the event of a registration pursuant to the provisions of this Section 1, IWEST will bear all reasonable expenses in connection with such filing (other than underwriting discounts and commissions and the fees and disbursements of counsel for the Eligible Holders), including, without limitation, all registration, filing, listing and qualifications fees, transfer agent fees, printers and accounting fees, fees relating to any blue sky survey and other documents relating to the performance of and compliance by IWEST with this Agreement and the fees and disbursements of counsel for IWEST.



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(h)

IWEST agrees that until all the Registrable Securities have been sold under a registration statement or pursuant to Rule 144 under the Securities Act, it shall keep current in filing all reports, statements and other materials required to be filed with the Commission to permit holders of the Registrable Securities to sell such securities under Rule 144.  IWEST shall furnish to each holder of Registrable Securities, promptly upon request, any information as may be reasonably requested to permit such holders to sell such securities pursuant to Rule 144 without registration, including a written statement by IWEST that it has complied with the reporting requirements of the Securities Exchange Act of 1934 necessary for such holder to sell such securities pursuant to Rule 144.

(i)

IWEST shall promptly notify the Eligible Holders of the Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, would include an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and shall promptly prepare and furnish to them such number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made.  The Eligible Holders agree to discontinue offers and sales of the Registrable Securities from and after such notice until delivery of such prospectus supplement or amendment.

(j)

If requested by the underwriter for any underwritten offering under Section 1(a) in which Registrable Securities are included or the underwriter for any underwritten offering of Registrable Securities on behalf of Eligible Holders of Registrable Securities pursuant to a registration requested under Section 1(b) hereof, IWEST and such Eligible Holders will enter into an underwriting agreement with such underwriter for such offering, which shall be reasonably satisfactory in substance and form to IWEST and IWEST’s counsel, such Eligible Holder of Registrable Securities and the underwriter, and such agreement shall contain such representations and warranties by IWEST and such Eligible Holder of Registrable Securities (provided, however, that the representations and warranties required of an Eligible Holder shall only relate to a description of such Eligible Holder, its holding of IWEST capital stock and its relationship with IWEST) and such other terms and provisions as are customarily contained in an underwriting agreement with respect to secondary distributions solely by selling stockholders, including, without limitation, indemnities substantially to the effect and to the extent provided in Section 2 hereof.

(k)

In the case of a registration requested under Section 1(b), the holders of a majority of the Registrable Securities initially included in such registration shall have the right to select the investment banker(s) and manager(s), if any, to administer any underwritten offering pursuant to such registration, subject to IWEST’s approval of such person(s), which approval shall not be unreasonably withheld.

(l)

Following the effective date of any registration statement filed pursuant to this Agreement and subject to the limitations set forth herein, IWEST shall be entitled, from time to time, to notify (the “ Blackout Notice ”) in writing the Eligible Holders to discontinue offers or sales of shares pursuant to such registration statement for Registrable Securities for the period of time stated in the notice (the “ Blackout Period ”), if IWEST determines, in its reasonable judgment, that the disclosure required in connection with the offers and sales of the Registrable Securities could materially damage IWEST’s ability to successfully complete an acquisition, corporate reorganization, securities offering or other voluntary transaction undertaken by IWEST (which information IWEST would not be required to disclose at such time other than in connection with the Eligible Holders’ registration statement) that is material to IWEST.  No single Blackout Period shall extend longer than sixty (60) consecutive calendar days; provided, that IWEST shall use its reasonable best efforts to keep the length of any Blackout Period



4



as short as practicable given the then existing circumstances, and in the aggregate Blackout Periods shall not exceed one hundred twenty (120) days in any consecutive twelve (12) month period.  The Eligible Holders hereby agree to discontinue offers and sales of such shares registered pursuant to this Agreement during any Blackout Period.

(m)

Each Eligible Holder who holds at the time of the request one percent or more of the capital stock of IWEST hereby agrees not to sell, transfer or otherwise dispose, or effect any public sale or distribution (including sales pursuant to Rule 144) of equity securities of IWEST, or any securities convertible into or exchangeable or exercisable for such securities, during the ninety (90) day period beginning on the effective date of any registration pursuant to Section 1(a) or Section 1(b) for a public offering to be underwritten on a firm commitment basis in which Registrable Securities are included (except as part of such underwritten registration), unless (i) the underwriters managing the registered public offering otherwise agree or request a shorter holdback period in connection with such offering, (ii) such holder has entered into an obligation to sell, transfer or otherwise dispose of equity securities of IWEST pursuant to the terms of an agreement entered into prior to the date of notice to the Eligible Holders with respect to a registration pursuant to Section 1(a) or prior to the date of the demand for registration by the Requisite Holders with respect to a registration pursuant to Section 1(b), or (iii) such holder transfers such equity securities pursuant to a bona fide gift of such securities or pursuant to a transaction consummated for purposes of estate planning, where the transferee has represented that it is acquiring such shares for investment purposes and without an intent to engage in a public distribution thereof and agrees to be bound by the terms of the restrictions contained in this Section 1.  Notwithstanding the foregoing, the holders of Registrable Securities shall be entitled to transfer any Registrable Securities to an Affiliate (as defined in the Merger Agreement) of such holder during the referenced ninety (90) day period, provided, however, that such transfer complies with applicable securities laws (as supported by the receipt of a legal opinion to that effect) and that any such transferee agrees to be bound by the terms of this provision and to enter into a similar agreement with the managing underwriter on its own behalf.

(n)

Other than the Eligible Holders, IWEST will not, and will not agree to, allow the holders of any securities of IWEST to include any of their securities in any registration statement demanded under Section 1(b) hereof, or any amendment or supplement thereto, without the consent of a majority of the Eligible Holders.

2.

Indemnification .  a)

Subject to the conditions set forth below, IWEST agrees to indemnify and hold harmless each Eligible Holder and each person, if any, who controls any such person within the meaning of Section 15 of the Securities Act or Section 20(a) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), from and against any and all loss, liability, charge, claim, damage, and expense whatsoever (which shall include, for all purposes of this Section 2, but not be limited to, reasonable attorneys’ fees and any and all reasonable expenses whatsoever incurred in investigating, preparing, or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), as and when incurred, arising out of, based upon, or in connection with any untrue statement or alleged untrue statement of a material fact contained (A) in any registration statement, preliminary prospectus, or final prospectus (as from time to time amended and supplemented), or any amendment or supplement thereto, relating to the sale of any of the Registrable Securities or (B) in any application or other document or communication (in this Section 2 collectively called an “ Application ”) executed by or on behalf of IWEST or based upon written information furnished by or on behalf of IWEST filed in any jurisdiction in order to register or qualify any of the Registrable Securities under the securities or blue sky laws thereof or filed with the Commission or any securities exchange; or any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements made therein not misleading, unless in each case (x) such statement or omission was made in reliance upon and in conformity with written



5



information furnished to IWEST with respect to such Eligible Holder by or on behalf of such person expressly for inclusion in any registration statement, preliminary prospectus, or final prospectus, or any amendment or supplement thereto, or in any Application, as the case may be, or (y) such loss, liability, charge, claim, damage or expense arises out of such Eligible Holder’s failure to comply with the terms and provisions of this Agreement.  The foregoing agreement to indemnify shall be in addition to any liability IWEST may otherwise have, including liabilities arising under this Agreement.

If any action is brought against any Eligible Holder or any controlling persons of such person (an “ Indemnified Party ”) in respect of which indemnity may be sought against IWEST pursuant to the foregoing paragraph, such Indemnified Party shall promptly notify IWEST in writing of the institution of such action (but the failure so to notify shall not relieve IWEST from any liability except if IWEST is materially prejudiced by such failure) and IWEST shall promptly assume the defense of such action, including the employment of counsel (reasonably satisfactory to such Indemnified Party), provided that the Indemnified Party shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless the employment of such counsel shall have been authorized in writing by IWEST in connection with the defense of such action or IWEST shall not have promptly employed counsel reasonably satisfactory to such Indemnified Party, or such Indemnified Party shall have reasonably concluded that there may be one or more legal defenses available to it or them or to other Indemnified Parties which are different from or additional to those available to IWEST, in any of which events such fees and expenses shall be borne by IWEST and IWEST shall not have the right to direct the defense of such action on behalf of the Indemnified Party.  Anything in this Section 2 to the contrary notwithstanding, IWEST shall not be liable for any settlement of any such claim or action effected without its written consent, which shall not be unreasonably withheld or delayed.  IWEST shall not, without the prior written consent of each Indemnified Party that is not released as described in this sentence, settle or compromise any action, or permit a default or consent to the entry of judgment in or otherwise seek to terminate any pending or threatened action, in respect of which indemnity may be sought hereunder (whether or not any Indemnified Party is a party thereto), unless such settlement, compromise, consent, or termination includes an unconditional release of each Indemnified Party from all liability and obligations in respect of such action.  IWEST agrees promptly to notify Eligible Holders of the commencement of any litigation or proceedings against IWEST or any of its officers or directors in connection with the sale of any Registrable Securities or any preliminary prospectus, final prospectus, registration statement, or amendment or supplement thereto, or any Application relating to any sale of any Registrable Securities.

(b)

Each Eligible Holder agrees to indemnify and hold harmless IWEST, each director of IWEST, each officer of IWEST who shall have signed any registration statement covering Registrable Securities held by such Eligible Holder, each other person, if any, who controls IWEST within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act to the same extent as the foregoing indemnity from IWEST to such Eligible Holder in Section 2(a) hereof, but only with respect to (i) statements or omissions, if any, made in any registration statement, preliminary prospectus, or final prospectus (as from time to time amended and supplemented), or any amendment or supplement thereto, or in any Application, in reliance upon and in conformity with written information furnished to IWEST with respect to such Eligible Holder by or on behalf of such Eligible Holder, expressly for inclusion in any such registration statement, preliminary prospectus, or final prospectus, or any amendment or supplement thereto, or in any Application, as the case may be and (ii) such Eligible Holder's breach of this Agreement.  If any action shall be brought against IWEST or any other person so indemnified based on any such registration statement, preliminary prospectus, or final prospectus or any amendment or supplement thereto, or in any Application, or such failure to comply with the terms of this Agreement, and in respect of which indemnity may be sought against such Eligible Holder pursuant to this Section 2(b), such Eligible Holder shall have the rights and duties given to IWEST, and IWEST and



6



each other person so indemnified shall have the rights and duties given to the Indemnified Parties, by the provisions of Section 2(a).

(c)

To provide for just and equitable contribution, if (i) an applicable indemnified party makes a claim for indemnification pursuant to Section 2(a) or 2(b) hereof (subject to the limitations thereof) but it is found in a final judicial determination, not subject to further appeal, that such indemnification may not be enforced in such case, even though this Agreement expressly provides for indemnification in such cases, or (ii) any indemnified or indemnifying party seeks contribution under the Securities Act, the Exchange Act or otherwise, then IWEST (including for this purpose any contribution made by or on behalf of any director of IWEST, any officer of IWEST who signed any such registration statement, and any controlling person of IWEST), as one entity, and the Eligible Holders of the Registrable Securities included in such registration in the aggregate (including for this purpose any contribution by or on behalf of an Eligible Holder), as a second entity, shall contribute to the losses, liabilities, claims, damages, and expenses whatsoever to which any of them may be subject, on the basis of relevant equitable considerations such as the relative fault of IWEST and such Eligible Holders in connection with the facts which resulted in such losses, liabilities, claims, damages, and expenses.  The relative fault, in the case of an untrue statement, alleged untrue statement, omission, or alleged omission shall be determined by, among other things, whether such statement, alleged statement, omission, or alleged omission relates to information supplied by IWEST or by such Eligible Holders, and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement, alleged statement, omission, or alleged omission.  IWEST and Eligible Holders agree that it would be unjust and inequitable if the respective obligations of IWEST and the Eligible Holders for contribution were determined by pro rata or per capita allocation of the aggregate losses, liabilities, claims, damages, and expenses (even if the Eligible Holders were treated as one entity for such purpose) or by any other method of allocation that does not reflect the equitable considerations referred to in this Section 2(c).  In no case shall any Eligible Holder be responsible for a portion of the contribution obligation imposed on all Eligible Holders in excess of its pro rata share based on the number of shares of Common Stock owned by him or it and included in such registration as compared to the number of shares of Common Stock owned by all Eligible Holders and included in such registration.  No person guilty of a fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who is not guilty of such fraudulent misrepresentation.  For purposes of this Section 2(c), each person, if any, who controls any Eligible Holder within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act shall have the same rights to contribution as such Eligible Holder and each person, if any, who controls IWEST within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act, each officer of IWEST who shall have signed any such registration statement, and each director of IWEST shall have the same rights to contribution as IWEST, subject in each case to the provisions of this Section 2(c).  Anything in this Section 2(c) to the contrary notwithstanding, no party shall be liable for contribution with respect to the settlement of any claim or action effected without its written consent.  This Section 2(c) is intended to supersede any right to contribution under the Securities Act, the Exchange Act or otherwise.

(d)

In no event and under no circumstances shall an Eligible Holder provide indemnification or contribution payments in excess of the net proceeds received by such Eligible Holder as a result of the sale of the Registrable Securities pursuant to the applicable registration statement.

3.

Registration Procedures .  Whenever the holders of Registrable Securities have requested that any Registrable Securities be registered pursuant to this Agreement, IWEST will use its reasonable best efforts to effect the registration and sale of such Registrable Securities in accordance with the intended method of disposition thereof, but subject to the provisions of this Agreement and, pursuant thereto, IWEST will, as expeditiously as reasonably possible, use its reasonable best efforts to:



7



(a)

prepare and file with the Commission a registration statement with respect to such Registrable Securities and use its reasonable best efforts to cause such registration statement to become effective;

(b)

prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus(es) used in connection therewith as may be necessary to keep such registration statement effective for a period required by this Agreement and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such registration statement;

(c)

cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by IWEST are then listed;

(d)

provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such registration statement;

(e)

in the event Eligible Holders who hold a majority of the Registrable Securities select an underwriter or underwriters to sell Registrable Securities in a registration under Section 1(b), IWEST shall enter into and perform its obligations under such customary agreements (including underwriting agreements in customary form) and take all such other customary and commercially reasonable actions as the holders of a majority of the Registrable Securities being sold or the underwriters reasonably request in order to expedite or facilitate the disposition of such Registrable Securities;

(f)

make available for inspection by any seller of Registrable Securities, any underwriter participating in any disposition pursuant to such registration statement, and any attorney retained by any such seller or underwriter, all financial and other records, pertinent corporate documents and properties of IWEST reasonably required in order to allow such seller of Registrable Securities to perform a customary due diligence review of IWEST, and cause IWEST’s officers, directors, employees and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement;

(g)

advise each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness of such registration statement or the initiation or threatening of any proceeding for such purpose and promptly use all commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued; and

(h)

IWEST will take all other reasonable actions that the Eligible Holders who hold a majority of the Registrable Securities or underwriters, if any, may reasonably request to expedite and facilitate the disposition by such Eligible Holders or the underwriters, as applicable, of the Registrable Securities pursuant to a registration statement filed pursuant hereto.

Notwithstanding the foregoing, it is agreed and understood that IWEST shall not be obligated to include in any registration statement filed pursuant to Section 1 those Registrable Securities owned by any Eligible Holder who has failed to provide to IWEST the information concerning such Eligible Holder and their intended method of distribution required to be included in such registration statement and required to be furnished by the Eligible Holder.



8



4.

Miscellaneous .

(a)

Remedies .  In the event of a breach by IWEST of its obligations under this Agreement, each Eligible Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement.

(b)

Amendments and Waivers .  The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented and the obligations hereunder may not be waived, unless such amendment, modification, supplement or waiver is in writing and signed by IWEST and Eligible Holders who hold a majority of the Registrable Securities.  No waiver of any term, condition or provision shall operate as a waiver of any other term, condition or provision of this Agreement, and no waiver of any term, condition or provision shall operate as a continuing waiver, except to the extent specifically stated in such waiver.

(c)

Notices .  All notices and other communications provided for or permitted hereunder shall be made in accordance with the provisions of the Merger Agreement.

(d)

Successors and Assigns .  This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including without limitation and without the need for an express assignment, subsequent holders of the Registrable Securities subject to the terms hereof.  

(e)

Assignment of Registration Rights .  The rights of the Eligible Holders hereunder, including the right to have IWEST register Registrable Securities pursuant to this Agreement, will be automatically assigned by the Eligible Holders to transferees or assignees (including by way of dividend or distribution) of all or any portion of the Registrable Securities, but only if (i) the transferring or assigning Eligible Holder agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to IWEST within a reasonable time after such transfer or assignment, or if such transfer or assignment is by way of dividend or distribution, a copy of the respective board resolution and the agreement of the transferee or assignee is furnished to IWEST within a reasonable time after such dividend or distribution, (ii) IWEST is, within a reasonable time after such transfer or assignment, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being transferred or assigned, (iii) such transfer or assignment was not made pursuant to any registration statement or Rule 144, (iv) at or before the time IWEST received the written notice contemplated by clause (ii) of this sentence, the transferee or assignee agrees in writing with IWEST to be bound by all of the provisions contained herein, and (v) such transfer is made in accordance with any applicable requirements of the Merger Agreement, any Ancillary Agreement (as defined in the Merger Agreement) thereto and securities laws, rules and regulations.  Any transferee or assignee of an Eligible Holder under this Section 4(e) shall be deemed an “ Eligible Holder ” for all purposes of this Agreement, and shall be entitled to all rights of, and subject to all obligations (including indemnification obligations) of, an Eligible Holder hereunder, upon compliance with this Section 4.  Nothing contained herein is intended to release any assignor or transferor of any of its obligations arising or accruing prior to satisfaction of such conditions.

(f)

Counterparts .  This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

(g)

Headings .  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.



9



(h)

Governing Law .  This Agreement shall be governed by and construed in accordance with the internal laws of the State of Illinois without reference to its conflicts of law provisions.

(i)

Fees and Expenses .  Should any party hereto employ an attorney for the purpose of enforcing or construing this Agreement, or any judgment based on this Agreement, in any legal proceeding whatsoever, including insolvency, bankruptcy, arbitration, declaratory relief or other litigation, the prevailing party or parties shall be entitled to receive from the non-prevailing party or parties thereto reimbursement for all reasonable attorneys' fees and all costs.  The “prevailing party” means the party in whose favor a judgment, decree, or final order is rendered.

(j)

Severability .  In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance is held invalid, illegal or unenforceable, the validity, legality and enforceability of any other provisions contained herein shall not be affected or impaired thereby.

(k)

No Conflicting Agreements .  IWEST shall not hereafter enter into any agreement with respect to its securities which violates the rights granted to the holders of Registrable Securities in this Agreement.

(l)

Entire Agreement .  This Agreement, the Merger Agreement (including all schedules and exhibits thereto) and the Ancillary Agreements contemplated thereby are intended by the parties hereto as a final expression of their agreement and are intended to be a complete and exclusive statement of the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises warranties or undertakings, other than those set forth or referred to herein, concerning the registration rights granted by IWEST pursuant to this Agreement.  This Agreement supersedes all prior agreements and understandings among the parties hereto with respect to the subject matter hereof.  If there is conflict between any of the terms, conditions or covenants contained in this Agreement and another agreement between the parties, the terms, conditions or covenants in this Agreement shall control.

(m)

Facsimile Signatures .  A facsimile signature on the signature pages hereto shall for all purposes be deemed an original and shall bind the signor as if such facsimile were an original.


[Signature Page Follows]



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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first written above.

INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.

By:

Title:

STOCKHOLDERS:

INLAND REAL ESTATE INVESTMENT
CORPORATION

By:

Title:

IWEST MERGER AGENT, LLC, as Agent for the Management Company Stockholders:

By:

Title:













[Signature Page to Registration Rights Agreement]







Schedule A





EXHIBIT 10.556

EXECUTION COPY

SUBLEASE

THIS SUBLEASE is made as of November 15, 2007 between INLAND REAL ESTATE INVESTMENT CORPORATION , a Delaware corporation, (“ Sublessor ”) and INLAND WESTERN RETAIL REAL ESTATE TRUST, INC ., a Maryland corporation, (“ Sublessee ”).

RECITALS

WHEREAS, Sublessor is the tenant under a certain lease (“ Prime Lease ”, a copy of which is attached hereto) dated May 12, 2005 by and between Sublessor as Tenant and Inland 2905 & 2907 Butterfield Road, L.L.C., a Delaware limited liability company as Landlord (“ Prime Landlord ”), pertaining to office buildings located at 2905 and 2907 Butterfield Road, Oak Brook, Illinois (the “ Premises ”) legally described on Exhibit A attached hereto and made a part hereof.

WHEREAS, Sublessor desires to sublet its interest into that portion of the Premises commonly known as Suites 120, 200 and 300 of the 2907 Butterfield Road Building, generally depicted on Exhibit B attached hereto and made a part hereof (“ Sublet Premises ”), to Sublessee pursuant to the terms of this Sublease.  The Sublet Premises comprises 36,740 rentable square feet.

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I
GRANT AND TERM

Section 1.01

Grant.  Sublessor, for and in consideration of the rents herein reserved and of the covenants and agreements herein contained on the part of the Sublessee to be performed, hereby leases to Sublessee, and Sublessee hereby leases from Sublessor, the Sublet Premises for a period commencing on November 15, 2007 (“Commencement Date”) and expiring on the last day of November, 2012 (“Term”) unless sooner terminated as may be provided herein.  Sublessee by its execution hereof expressly acknowledges that its rights hereunder are subject to and expressly conditioned upon the rights of Sublessor under the Prime Lease.  Sublessee hereby agrees to abide by and comply with all of Sublessor’s obligations under the Prime lease, as they pertain to the Sublet Premises, except for the payment of rent.  Sublessee acknowledges that it has received a copy of the Prime Lease and that Sublessee has read and understands Sublessor’s obligations thereunder.  Sublessee hereby defends, indemnifies and holds Sublessor, Prime Landlord and Prime Landlord’s Mortgagee (as defined in the Prime Lease), or beneficiary under any trust deed, harmless against any loss, liability or damages that any of them may incur by virtue of any violation of any of the terms of this Sublease or the occupancy by Sublessee of the Sublet Premises, arising from the acts of Sublessee.  Sublessee shall also comply with all the terms and conditions of any mortgage, deed of trust or other lien or encumbrance which encumbers the Premises and that are to be performed during the term of this Sublease by Sublessee; provided, however, Sublessee shall not be obligated to make principal or interest payments under any such mortgage, deed of trust or other lien or encumbrance.  Sublessee has examined the Sublet Premises, knows the state and condition thereof, and accepts the same “as is” and without any obligation of Sublessor to make any repairs whatsoever to the Sublet Premises.

Section 1.02

Option to Extend Term

.  Provided no event of default by Sublessee exists hereunder, Sublessee shall have one (1) option to extend the Term for an additional five (5) years,





immediately succeeding the expiration of the initial Term hereof, on the same terms and conditions of this Sublease, except (x) there shall be no further right to extend the Term of this Lease and (y) that the annual Base Rent shall be equal to the sum of $495,990.00 plus the product of $495,990.00 multiplied by the sum of the percentage increases of  the Consumer Price Index (“ CPI ”), hereinafter defined, for each year of the initial Term of this Sublease (with the CPI on the first day of the initial Term being the base number for the calculations set forth herein). For example, if the CPI increased 2% in each of the five years of the initial Term, then the annual Base Rent for each year of the extended Term would be $545,589.00. (2% x 5 years = 10% x $495,990.00 = $49,599.00 + $495,990.00 = $545,589.00.)  CPI means the Consumer Price Index published by the Bureau of Labor Statistics of the United States Department of Labor, U.S. City Average, All Items and Major Group Figures for Urban Wage Earners and Clerical Workers (1982-84).  The option herein granted to extend the Term of this Sublease shall be exercised by Sublessee giving written notice to Sublessor of the exercise of the option not less than 180 days nor more than 365 days prior to the expiration of the initial Term.  If Sublessee does not give Sublessor such notice within the foregoing time limits for extending the Term of this Sublease, then the terms of this Section 1.02 shall be null and void and of no further force or effect.

ARTICLE II
RENT

Section 2.01

Base Rent, Additional Rent and Tenant Improvement Amortization

.  During the Term, Sublessee shall pay annual base rent of Four Hundred Ninety Five Thousand Nine Hundred Ninety ($495,990.00) Dollars in monthly installments of Forty One Thousand Three Hundred Thirty Two and 50/100 ($41,332.50) Dollars (hereinafter, the “ Base Rent ”) commencing on November 15, 2007 and continuing on the first day of each successive month to and including November, 2012.

Commencing on November 15, 2007, in addition to the Base Rent, Sublessee will be obligated to pay, as additional rent, (“ Additional Rent ”) in any calendar year, its proportionate share of Tenant’s Pro Rata Share of Taxes and Tenant’s Pro Rata Share of Expenses as such terms are defined in the Prime Lease.  Sublessee’s proportionate share is based upon a fraction the denominator of which is 98,431 square feet (the rentable square footage of both the 2905 and the 2907 Butterfield Road Buildings) and the numerator of which is 36,740 square feet.  Sublessee shall make monthly payments of Additional Rent at the time of and together with its payments of Base Rent in amounts equal to one twelfth (1/12) of Sublessee’s proportionate share of Tenant’s Pro Rata Share of Taxes and Tenant’s Pro Rata Share of Expenses as estimated by the Landlord under the Prime Lease.  Sublessor will provide Sublessee with a copy of Prime Landlord’s Projection Notice, as defined in the Prime Lease, as may be received by Sublessor.  After the end of each calendar year following the Prime Landlord’s determination the actual cost of Tenant’s Pro Rata Share of Taxes and Tenant’s Pro Rata Share of Expenses and Prime Landlord’s delivery to Sublessor of a statement (“ Sublessor’s Statement ”) of the actual amount of Tenant’s Pro Rata Share of Taxes and Tenant’s Pro Rata Share of Expenses, Sublessor shall furnish Sublessee with a statement of Sublessee’s proportionate share of such Tenant’s Pro Rata Share of Taxes and Tenant’s Pro Rata Share of Expenses.  If the amount thereof exceeds the estimated payments of Additional Rent for any calendar year made by Sublessee, then Sublessee shall pay the Sublessor the excess within thirty (30) days after the date of Sublessee’s receipt of Sublessor’s Statement.  If the estimated payments of Additional Rent for any calendar year exceed the actual amount of Sublessee’s proportionate share of Tenant’s Pro Rata Share of Taxes and Tenant’s Pro Rata Share of Expenses owed for such year, then Sublessor shall credit such excess to Additional Rent payable by Sublessee after the date of Sublessor’s Statement until such excess is exhausted.  After expiration of the Term of this Sublease, or after earlier termination of this Sublease not caused by a default or breach of this Sublease by Sublessee, and upon determination of the actual amount of Sublessee’s proportionate share of Tenant’s Pro Rata Share of Taxes and Tenant’s Pro Rata Share of Expenses for the year in which such expiration or termination occurs, Sublessor will remit to Sublessee any unapplied balance of Sublessee’s estimated payments of



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Sublessee’s proportionate share of Tenant’s Pro Rata Share of Taxes and Tenant’s Pro Rata Share of Expenses for such year. Upon request of Sublessee, Sublessor will exercise Sublessor’s right to inspect the books and records of the Prime Landlord as set forth in Section 8.4 of the Prime Lease and share such inspection with Sublessee.  If Sublessee shall determine an exception to the Prime Landlord’s determination of any Taxes or Expenses, as defined in the Prime Lease and so notifies Sublessor in writing, then Sublessor shall issue a written exception to the Prime Landlord as set forth in said Section 8.4 and attempt to resolve the dispute.  If Sublessor, at the request of Sublessee, shall engage an accounting firm as set forth in said Section 8.4 and the Sublessor has not been overcharged the sum of Taxes and Expenses for the year of the exception being made by more than three percent (3%) then Sublessee shall promptly reimburse Sublessor for the cost of retaining the accounting firm; provided, however, if Sublessor shall recognize any monetary benefit from the accounting firm’s determination of Taxes and Expenses, then Sublessor shall share the cost of retaining the accounting firm with Sublessee on a pro rata basis based on Sublessor’s share of the monetary benefits as to the total monetary benefits gained from the accounting firm’s determination.

In anticipation of the making of this Lease Sublessee made certain tenant improvements to the Sublet Premises.  At Sublessee’s request, Sublessor advanced the aggregate sum of $395,000.00 towards the construction of such improvements.  Commencing on December 1, 2007, in addition to the Base Rent and Additional Rent, Sublessee will be obligated to pay to Sublessor, as additional rent, together with the monthly payment of Base Rent and Additional Rent, the monthly sum of $6,583.33 (“ TI Amortization ”), representing 1/60 of the $395,000.00 advanced by Sublessor toward the tenant improvements.

All payments of Base Rent, Additional Rent and TI Amortization shall be made in advance on the first day of each calendar month and at the same rate for fractions of a month if the Term begins or ends on any day except the first or the last day of a calendar month, respectively.

Section 2.02

Payment of Rent

.  All monthly payments of Base Rent, Additional Rent, TI Amortization and all other charges due from Sublessee to Sublessor hereunder for the entire Term (collectively, “ Rent ”) shall be paid to the order of Inland 2905 & 2907 Butterfield Road, LLC (which is collecting Rent for the benefit of Sublessor) at 2901 Butterfield Road, Oak Brook, Illinois 60523, Attn: Alan F. Kremin.

Section 2.03

Late Payment

.  If any payment of Base Rent, Additional Rent or TI Amortization due hereunder is not made in full on or before the 5 th day after the date such payment is due, a late payment charge equal to 5% of the delinquent payment shall be due and payable.

ARTICLE III
INDEMNIFICATION

Section 3.01

Subtenant Indemnification

.  Sublessee agrees to pay, and to protect, indemnify and save harmless Sublessor and Prime Landlord’s Mortgagee, from and against any and all liabilities, losses, damages, costs, expenses (including, without limitation, all reasonable attorney’s fees and expenses), penalties, causes of action, suits, claims, demands or judgments of any nature whatsoever, arising out of third party claims caused by the acts or omissions of Sublessee due to (i) any injury to, or the death of, any persons or any damage to property on the Sublet Premises or upon adjoining sidewalks, streets or ways, in any manner growing out of or connected with the use, nonuse, condition or occupancy of the Sublet Premises or any part thereof or resulting from the condition thereof or of adjoining property, sidewalks, streets or ways, (ii) the performance of any labor or services or the furnishing of any materials or other property in respect of the Sublet Premises, (iii) any claim, proceeding or contest in connection with any insurance proceeds or settlements, or any award for condemnation or otherwise, (iv) any act or omission of Sublessee or its agents, contractors, licensees, sublessees or invitees or any person for whose



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conduct Sublessee is legally responsible, (v) violation (not proximately caused by negligent or willful acts of Sublessor or of Landlord’s Mortgagee) of any Legal Requirement, as defined in the Prime Lease, or other agreement, contract, covenant, condition or restriction affecting the Sublet Premises, or the ownership, occupancy or use thereof, (vi) any contest by Sublessee permitted under this Sublease, or (vii) violation of any provision of this Sublease by Sublessee. Only those obligations of Sublessee under this paragraph relating to acts, omissions or events occurring during the Term hereof shall survive the expiration or other termination of this Sublease.

Section 3.02

Sublessor Indemnification

.  Sublessor agrees to pay and to protect, indemnify and save harmless Sublessee from and against any and all liabilities, losses, damages, costs, expenses (including, without limitation, all reasonable attorney’s fees and expenses), penalties, causes of action, suits, claims, demands or judgments of any nature whatsoever, growing out of or connected with the use, nonuse, condition or occupancy of the Sublet Premises or any part thereof or resulting from the condition thereof or of adjoining property, sidewalks, streets or ways, resulting from an act or event not caused by Sublessee. Liability for contamination under Environmental Laws, as defined in the Prime Lease, relating to conditions which existed at the time of Lease termination is expressly excluded from this indemnity obligation.  The obligations of Sublessor under this paragraph shall survive the expiration or other termination of this Sublease.  Sublessee shall not be entitled to the protection and indemnification provided in this paragraph if, and to the extent, the event, condition or circumstance which would otherwise require Sublessor’s protection and indemnification occurred after termination of this Sublease and such termination was caused by Sublessee’s default under this Sublease.

ARTICLE IV
USE OF PREMISES

Section 4.01

Specific Use

.  The Sublet Premises shall be occupied and used for general office purposes and in accordance with all applicable governmental laws, regulations and requirements and for purposes incidental thereto, and shall not be used for any other purpose.

Section 4.02

Covenants Regarding Use

.  In connection with use of the Sublet Premises, Sublessor and Sublessee agree to do the following:

(a)

Sublessee shall use the Sublet Premises and conduct its business thereon in a safe, careful, reputable and lawful manner.

(b)

Sublessee shall not commit, nor allow to be committed by any of its employees or invitees, in, on or about the Sublet Premises or the Premises, any act of waste, including any act which might deface, damage or destroy the Premises or any part thereof; use or permit to be used on the Sublet Premises any hazardous substance, equipment or other thing which might cause injury to person or property or increase the danger of fire or other casualty in, on or about the Sublet Premises; permit any objectionable or offensive noise or odors to be emitted from the Sublet Premises; or do anything, or permit anything to be done, which would, in Sublessor’s reasonable opinion, disturb or tend to disturb other individuals occupying or using space in the Premises.

(c)

Sublessee shall not overload the floors of the Sublet Premises beyond their designed weight-bearing capacity.  

(d)

Sublessee shall not use the Sublet Premises, nor allow the Sublet Premises to be used, for any purpose or in any manner which would, in Sublessor’s opinion, invalidate any policy of insurance now or hereafter carried on the Premises or increase the rate of premiums



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payable on any such insurance policy.  Should Sublessee fail to comply with this covenant, Sublessor may, at its option, require Sublessee to stop engaging in such activity or to reimburse Sublessor as additional fees for any increase in premiums charged during the Term of this Sublease on the insurance carried by Sublessor on the Premises and attributable to the use being made of the Sublet Premises by Sublessee.

(e)

Unless extended hours are permitted by Sublessor to any other building occupant, access to the Sublet Premises is limited to 7:00 a.m. to 9:00 p.m. Monday through Friday, Saturday 8:00 a.m. to 3:00 p.m., with limited access on Sundays (as determined by Landlord from time to time) or recognized holidays.

(f)

Sublessor will be responsible for heating, air conditioning and electricity, basic cleaning (vacuuming, dusting and emptying of waste baskets) on a daily basis to the extent the Landlord is obligated to provide such items to Sublessor under the Prime Lease and provided Sublessee pays its proportionate share of the costs therefor which costs shall be included within Sublessee’s proportionate share of Tenant’s Pro Rata Share of Expenses.  Upon presentation of billing statements, Sublessee shall reimburse Sublessor for coffee service contracted for by Sublessor based on Sublessee’s use.

Section 4.03

Compliance with Laws

.  Sublessee shall comply with all laws, statutes, ordinances, rules, regulations and orders of any federal, state, municipal or other government or agency thereof having jurisdiction over and relating solely to the use of the Sublet Premises and is responsible to obtain all licenses and permits necessary and required by any law statute, ordinance, rule, regulation or order of any federal, state, municipal or other government or agency having jurisdiction over and relating to the Sublet Premises.

ARTICLE V
INSURANCE

Section 5.01

Kinds and Amounts

.  Sublessor will cause to be procured and maintained the insurance and policies of insurance in amounts as required by Sections 14.1.1, 14.1.2 (but not for work contracted for by Sublessee), 14.1.3 (with Sublessee named as an additional insured), 14.1.4 (as to Sublessor’s employees), 14.1.5 and 14.1.6 of the Prime Lease (Sublessee’s proportionate share of the cost and expense of such insurance is reimbursable to Sublessor by Sublessee as a portion of Additional Rent under Section 2.01 of this Sublease).  Sublessee shall procure and maintain the insurance and policies of insurance at its own cost and expense in amounts as required by Sections 14.1.2 (for work contracted for by Sublessee), 14.1.3, 14.1.4 (for Sublessee’s employees) and 14.1.6 of the Prime Lease.

Section 5.02

Form of Insurance

.  The insurance described in Section 5.01 above shall be in companies and in form and substance required by the Prime Lease and if such insurance is obtained directly by Sublessee, such insurance policies described in Section 5.01 shall name Sublessor and Sublessee as insured parties and shall contain waivers of subrogation against Sublessor and Sublessee, and expressly permit waiver of claims prior to a loss.  The aforesaid insurance shall not be subject to cancellation except after, at least, thirty (30) days’ prior written notice to Sublessor.  The original insurance policies (or certificates thereof satisfactory to Sublessor), together with satisfactory evidence of payment of the premiums thereon, shall be deposited with Sublessor at the Commencement Date and renewals thereof not less than thirty (30) days prior to the end of the term of each such coverage.  

Section 5.03

Mutual Waiver of Claims and Subrogation Rights

.  Notwithstanding any other provisions of this Sublease to the contrary, whenever (a) any loss, cost, damage or expense resulting from fire, explosion or any other casualty or occurrence is incurred by either of the parties to this Sublease, or



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anyone claiming by, through, or under it in connection with the Sublet Premises, and (b) such party is then covered in whole or in part by insurance with respect to such loss, costs, damage or expense or is required under this Sublease to be so insured, then the party so insured (or so required) hereby waives any claims against and releases the other party from any liability said other party may have on account of such loss, costs, damage or expense to the extent of any amount recovered by reason of such insurance; provided that such waiver of claims or release of liability shall not be operative in any case where the effect thereof is to invalidate such insurance coverage or increase the cost thereof (except that in the case of increased cost, the other party shall have the right, within thirty (30) days following written notice, to pay such increased cost, thereby keeping such release or waiver in full force and effect).

Section 5.04

Sublessee Business Interruption Insurance

.  Notwithstanding any provision of this Sublease to the contrary, (x) Sublessee shall be permitted to obtain and carry business interruption insurance (either in the form of a separate policy or in conjunction with any other insurance required hereunder) and shall be entitled to receive all proceeds payable on account of any such insurance and (y) Sublessor shall have no claim to or interest in the proceeds of any business interruption insurance maintained by Sublessee.

ARTICLE VI
ASSIGNMENT AND SUBLETTING

Section 6.01

Consent Required

.  Sublessee shall not, without Sublessor’s prior written consent which consent may be in Sublessor’s sole unfettered discretion, assign, convey, mortgage or sublet this Sublease or any interest under it, nor permit the use or occupancy of the Sublet Premises or any part thereof by anyone other than Sublessee or affiliates or subsidiaries of Sublessee.  Any such assignment, conveyance, mortgage, sublease, use or occupancy without Sublessor’s consent shall be voidable and, at Sublessor’s election, shall constitute a default of this Sublease.  Sublessor shall be paid all rent from any subletting.  No interest of Sublessee in this Sublease shall be assignable by operation of law.  An involuntary assignment shall constitute a default by Sublessee and Sublessor shall have the right to elect to terminate this Sublease, in which case this Sublease shall not be treated as an asset of Sublessee.

Section 6.02

Involuntary Assignment

.

(a)

No interest of Sublessee in this Sublease shall be assignable by operation of law.  Each of the following acts shall be considered an involuntary assignment:

(i)

If Sublessee is or becomes bankrupt or insolvent, makes an assignment for the benefit of creditors, or institutes a proceeding under the Bankruptcy Act in which Sublessee is the bankrupt; or, if Sublessee is a partnership or consists of more than one person or entity, if any partner of the partnership or other person or entity is or becomes bankrupt or insolvent, or makes an assignment for the benefit of creditors;

(ii)

If a writ of attachment or execution is levied on this Sublease;

(iii)

If, in any proceeding or action to which Sublessee is a party, a receiver is appointed with authority to take possession of the Sublet Premises.

(b)

An involuntary assignment shall constitute a default by Sublessee and Sublessor shall have the right to elect to terminate this Sublease, in which case this Sublease shall not be treated as an asset of Sublessee.  If a writ of attachment or execution is levied on this Sublease, Sublessee shall have ten (10) days in which to cause the attachment or



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execution to be removed.  If any involuntary proceeding in bankruptcy is brought against Sublessee, or if a receiver is appointed, Sublessee shall have sixty (60) days in which to have the involuntary proceeding dismissed or the receiver removed.

ARTICLE VII
SURRENDER

Upon the termination of this Sublease, whether by forfeiture, lapse of time or otherwise, or upon the termination of Sublessee’s right to possession of the Sublet Premises, Sublessee will at once surrender and deliver up the Sublet Premises, together with all alterations, additions, improvements, hardware and fixtures thereon, other than Sublessee’s personal property, to Sublessor in good condition and repair, except for reasonable wear and tear occurring after the last necessary maintenance by Sublessee.  If Sublessee fails to surrender the Sublet Premises to Sublessor on expiration or termination of this Sublease as required by this Sublease, Sublessee shall hold Sublessor harmless from all damages resulting from Sublessee’s failure to surrender the Sublet Premises, including, without limitation, claims made by a succeeding tenant resulting from Sublessee’s failure to surrender the Sublet Premises.

ARTICLE VIII
DESTRUCTION OF PREMISES

In the event of damage to, or destruction of, the Sublet Premises or any part thereof Sublessee shall have the same rights and obligations as the Sublessor under the Prime Lease with respect to the Sublet Premises.

ARTICLE IX
DEFAULTS AND REMEDIES

Section 9.01

Defaults by Sublessee

.  The occurrence of any one or more of the following events shall be a default and breach of this Sublease by Sublessee:  (a) Sublessee shall fail to pay any installment of Base Rent, Additional Rent, TI Amortization or any other sum due hereunder, within five (5) days after notice thereof from Sublessor; (b) Sublessee shall fail to perform or observe any other term, condition, covenant or obligation required to be performed or observed by it under this Sublease and does not correct such failure within thirty (30) days after notice thereof from Sublessor; provided, however, that if the term, condition, covenant or obligation to be performed by Sublessee is of such nature that the same cannot reasonably be corrected within such thirty day period, such default shall be deemed to have been cured if Sublessee commences such performance within said thirty day period and thereafter diligently undertakes to complete the same provided in no event shall Sublessee be allowed more than ninety (90) days to complete such cure; (c) Intentionally deleted; (d) A trustee or receiver shall be appointed to take possession of substantially all of Sublessee’s assets in, on or about the Sublet Premises or of Sublessee’s interest in this Sublease; (e) Sublessee makes an assignment for the benefit of creditors, or substantially all of Sublessee’s assets in, on or about the Sublet Premises or Sublessee’s interest in this Sublease are attached or levied upon under execution; (f) A petition in bankruptcy, insolvency, or for reorganization or arrangement is filed by or against Sublessee pursuant to any federal or state statute; (g) The Sublet Premises are levied upon by any revenue officer or similar officer; (h) A decree or order appointing a receiver of the property of Sublessee shall be made and such decree or order shall not have been vacated, stayed or set aside within sixty (60) days from the date of entry or granting thereof; or (i) If Sublessee shall fail to contest the validity of any lien or claimed lien and give security to Sublessor to insure payment thereof, or having commenced to contest the same and having given such security, shall fail to prosecute such contest with diligence, or shall fail to have the same released and satisfy any judgment rendered thereon, and such default continues for twenty-five (25) days after notice thereof in writing to Sublessee.



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Section 9.02

Remedies of Sublessor

.  Upon the occurrence of any event of default set forth above, Sublessor shall have the following rights and remedies, in addition to those allowed by law, any one or more of which may be exercised without further notice to or demand upon Sublessee:

(a)

Sublessor may reenter the Sublet Premises and cure any default of Sublessee, in which event Sublessee shall reimburse Sublessor as additional fees for any costs and expenses which Sublessor may incur to cure such default; and Sublessor shall not be liable to Sublessee for any loss or damage which Sublessee may sustain by reason of Sublessor’s action, unless such loss or damage was caused by Sublessor’s gross negligence.  Any reentry or repossession of the Sublet Premises by Sublessor or termination of this Sublease by Sublessor for default by Sublessee shall not work a forfeiture of the Rents to be paid and the covenants to be performed by Sublessee for the full Term hereof which shall survive any such reentry, repossession or termination.

(b)

Sublessor may sue for injunctive relief or to recover damages for any loss resulting from the breach and may accelerate all Rent without any abatement or setoff.

(c)

Sublessor may terminate this Sublease as of the date of such default, in which event:

(i)

Sublessor may reenter the Sublet Premises with process of law using such force as may be necessary, and remove all persons, fixtures and chattels therefrom and Sublessor shall not be liable for any damages resulting therefrom.  Upon the happening of any one (1) or more events of default, Sublessor may repossess the Sublet Premises by forcible entry or detainer suit, or otherwise, without demand or notice of any kind to Sublessee (except as hereinabove expressly provided for) and without terminating this Sublease and (without any obligation to do so) may relet all or any part of the Sublet Premises for such fees and upon such terms as shall be satisfactory to Sublessor (including the right to relet the Sublet Premises for a term greater or lesser than that under the Sublease term, and the right to relet the Sublet Premises as a part of a larger area, and the right to change the character or use made of the Sublet Premises).  For the purpose of such reletting, Sublessor may decorate or make any repairs, changes, alterations or additions in or to the Sublet Premises that may be necessary or convenient.  In the event of any termination of this Sublease or repossession of any of the Sublet Premises by reason of the occurrence of an event of default, Sublessee shall pay all sums required to be paid by Sublessee to and including the date of such termination of repossession and, in addition, Sublessor shall be entitled to recover as damages for loss of the bargain and not as a penalty (i) the aggregate sum which at the time of such termination represents the excess, if any, of the present value of the aggregate rents which would have been payable after the termination date had this Sublease not been terminated, including, without limitation, Base Rent at the annual rate or respective annual rates for the remainder of the Term provided for in this Sublease and the amount projected by Sublessor to represent Additional Rent for the remainder of the Term over the then present value of the then aggregate fair rental value of the Sublet Premises for the balance of the Term, such present worth to be computed in each case on the basis of a ten percent (10%) per annum discount from the respective dates upon which such rentals would have been payable hereunder had this Sublease not been terminated, and (ii) any damages in addition thereto, including without limitation reasonable attorneys’ fees and court costs, which Sublessor sustains as a result of the breach of any of the covenants of this Sublease other than for the payment of Base Rent.



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Sublessee hereby agrees to be and remain liable for all sums aforesaid; and Sublessor may recover such damages from Sublessee and to institute and maintain successive actions or legal proceedings against Sublessee for the recovery of such damages.  Nothing herein contained shall be deemed to require Sublessor to wait to begin such action or other legal proceedings until the date when the Term would have expired by limitation had there been no such event of default.

(ii)

The obligation of Sublessee to pay all sums required to be paid by Sublessee hereunder during the term hereof shall not be deemed to be waived, released or terminated by reason of the service upon Sublessee of any statutory or other notice to collect, notice that the tenancy hereby created will be terminated on the date therein set forth, demand for possession, the institution of any action of forcible detainer or ejectment, or the entry of any judgment for possession that may be rendered in any such action.  In the event of any event of default hereunder, Sublessor may immediately or at any time thereafter, without notice, cure such breach for the account and at the expense of Sublessee.  If Sublessor at any time by reason of such breach, is compelled to pay, or elects to pay, any sum of money or do any act which will require the payment of any sum of money, or incurs any expense, including reasonable attorneys’ fees, in instituting or prosecuting any action or proceedings to enforce Sublessor’s rights hereunder, the sum or sums so paid by Sublessor, with interest thereon at the rate of eighteen percent (18%) per annum from the date of payment thereof, shall be deemed to be additional fee hereunder and shall be due from Sublessee to Sublessor on the first day of the month following the payment of such respective sums or expenses. No receipt of money by Sublessor from Sublessee after the termination of this Sublease or after the service of any notice or after the commencement of any suit, or after final judgment for possession of the Sublet Premises, shall renew, reinstate, continue or extend the terms of this Sublease or affect any such notice, demand or suit.

(d)

Sublessor shall use commercially reasonable efforts to mitigate any damages resulting from a default by Sublessee under this Sublease.  Sublessor’s obligation to mitigate damages after a default by Sublessee under this Sublease shall be satisfied in full if Sublessor undertakes to Sublease the Premises to another sublessee (a “ Substitute Sublessee ”) in accordance with the following criteria:

(i)

Sublessor shall have no obligation to solicit or entertain negotiations with any other prospective sublessees for the Sublet Premises until Sublessor obtains full and complete possession of the Sublet Premises including, without limitation, the final and unappealable legal right to relet the Sublet Premises free of any possessory claim of Sublessee;

(ii)

Sublessor shall not be obligated to sublease or show the Sublet Premises, on a priority basis, or offer the Sublet Premises to a prospective sublessee when other premises in the Premises suitable for that prospective sublessee’s use are (or soon will be) available;

(iii)

Sublessor shall not be obligated to sublease the Sublet Premises to a Substitute Sublessee for a rental less than the current fair market rental then prevailing for similar uses within the Premises, nor shall Sublessor be obligated to enter into a



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new sublease under other terms and conditions that are unacceptable to Sublessor under Sublessor’s then current leasing policies for comparable space in the Premises;

(iv)

Sublessor shall not be obligated to enter into a sublease with a Substitute Sublessee whose use would:

(1)

violate any restriction, covenant, or requirement contained in the sublease of another sublessee of the Premises;

(2)

adversely affect the reputation of the Premises; or

(3)

be incompatible with the operation of the Premises as an office building complex; and

(v)

Sublessor shall not be obligated to enter into a sublease with any proposed Substitute Sublessee which does not have, in Sublessor’s reasonable opinion, sufficient financial resources to pay all amounts under its sublease as and when due, and to operate the Sublet Premises in a first class manner.

Section 9.03

Remedies Cumulative

.

(a)

No remedy herein or otherwise conferred upon or reserved to Sublessor shall be considered to exclude or suspend any other remedy but the same shall be cumulative and shall be in addition to every other remedy given hereunder now or hereafter existing at law or in equity or by statute, and every power and remedy given by this Sublease to Sublessor may be exercised from time to time and as often as occasion may rise or as may be deemed expedient.  No delay or omission of Sublessor to exercise any right or power arising from any default, shall impair any such right or power or shall be construed to be a waiver of any such default or any acquiescence therein.  Neither the rights herein given to receive, collect, sue for Rent, moneys or payments, or to enforce the terms, provisions and conditions of this Sublease, or to prevent the breach or nonobservance thereof, or the exercise of any such right or of any other right or remedy hereunder or otherwise granted or arising, shall in any way affect or impair or toll the right or power of Sublessor to declare the Term hereby granted ended, and to terminate this Sublease as provided for in this Sublease, or to repossess without terminating the Sublease, because of any default in or breach of the covenants, provisions or conditions of this Sublease.

(b)

Sublessee hereby waives and surrenders, for itself and all those claiming under it, including creditors of all kinds, (i) any right and privilege which it or any of them may have under any present or future law to redeem any of the Sublet Premises or to have a continuance of this Sublease after termination of this Sublease or the Sublessee’s right of occupancy or possession pursuant to any court order or any provision hereof, and (ii) the benefits of any present or future law which exempts property from liability for debt or distress for fee.

Section 9.04

Non-Waiver of Defaults

.  No waiver of any breach of any of the covenants of this Sublease shall be construed, taken or held to be a waiver of any other breach or waiver, acquiescence in or consent to any further or succeeding breach of the same covenant.  No waiver of any default or breach of this Sublease shall be held to be a waiver of any other default or breach.  No act or omission by Sublessor or its employees or agents during the Term of this Sublease shall be deemed an acceptance of a



x


surrender of the Sublet Premises, and no agreement to accept such a surrender shall be valid unless in writing and signed by Sublessor.

Section 9.05

Attorneys’ Fees

.  In the event Sublessee defaults in the performance or observance of any of the terms, conditions, covenants or obligations contained in this Sublease and Sublessor places the enforcement of all or any part of this Sublease, or the recovery of possession of the Sublet Premises in the hands of an attorney or collection agency, Sublessee agrees to reimburse Sublessor for the attorney’s or collection agent’s fees incurred thereby, whether or not suit is actually filed.

ARTICLE X
MAINTENANCE, REPAIRS AND ALTERATIONS

Section 10.01

Maintenance and Repairs

.

(a)

Except as hereinafter provided, Sublessor at its sole cost shall keep and maintain the entire exterior and interior of the Premises including the roof, plumbing fixtures, heating, ventilating, air-conditioning equipment, driveways and parking areas in good condition and repair, including any necessary replacements, and in full compliance with all zoning, building, health and police regulations in force; provided that Sublessor shall not be required to make any repairs which become necessary by reason of the acts or negligence of Sublessee, its agents, contractors, servants, employees, sublessees, concessionaires or licensees.  Sublessee shall not have any responsibility to maintain the Premises; provided, however, Sublessee shall keep, maintain and repair the interior of the Sublet Premises.

(b)

Sublessor will provide cleaning services for the Sublet Premises as described in paragraph 4.02(f) in a manner consistent with the cleaning services provided for the balance of the Premises provided Sublessee pays its proportionate share of the costs therefor.

(c)

Sublessor shall have the right to enter the Sublet Premises upon reasonable prior notice for the purpose of inspection and for making any repairs to the Sublet Premises.  Sublessor shall use commercially reasonable efforts to minimize interference with and disruption of Sublessee in making any repairs to the Sublet Premises.

(d)

Sublessee shall repair at its sole cost and expense all damage to the Sublet Premises caused by the installation or removal of personal property of Sublessee.

Section 10.02

Alterations

.  Sublessee shall not make any alterations or improvements to or do any act which would tend to impair the value of the Sublet Premises or the Premises, without the express prior written consent of the Sublessor.

ARTICLE XI
INTENTIONALLY DELETED

ARTICLE XII
ESTOPPEL CERTIFICATES

Sublessee shall at any time and from time to time upon not less than ten (10) days prior written request from Sublessor execute, acknowledge and deliver to Sublessor, in form reasonably satisfactory to Sublessor, Prime Landlord and Prime Landlord’s Mortgagee, or beneficiary under any trust deed a written statement certifying that Sublessee has accepted the Sublet Premises, that this Sublease is unmodified and



xi


in full force and effect, or if there have been modifications, that the same is in full force and effect as modified and stating the modifications; that the Sublessor is not in default hereunder; the date to which the fees and other charges have been paid in advance; if any; or such other accurate certification as may reasonably be required by Sublessor or Prime Landlord’s Mortgagee, or beneficiary under any trust deed, and agreeing to give copies to such mortgagee or beneficiary of all notices by Sublessee to Sublessor. Any such statement delivered by Sublessee pursuant to this Subsection may be relied upon by any prospective purchaser of the Sublet Premises, mortgagee or the beneficiary under any trust deed on the Sublet Premises and their respective successors and assigns.  Solely for purposes of issuance of financial statements, regulatory filings and real property financing by Sublessee or its affiliates, Sublessor shall at any time and from time to time upon not less than ten (10) days prior written request from Sublessee execute, acknowledge and deliver to Sublessee, in form reasonably satisfactory to Sublessee, a written statement certifying that Sublessee has accepted the Sublet Premises, that this Sublease is unmodified and in full force and effect, or if there have been modifications, that the same is in full force and effect as modified and stating the modifications; that the Sublessee is not in default hereunder; the date to which the fees and other charges have been paid in advance; if any; or such other accurate certification as may reasonably be required by Sublessee. Any such statement delivered pursuant to this Subsection may be relied upon in connection with the issuance of any financial statements and regulatory filings and the lender in connection with any real property financing by Sublessee or its affiliates.

ARTICLE XIII
MISCELLANEOUS

Section 13.01

Amendments Must be in Writing

.  All understandings between Sublessor and Sublessee are incorporated herein.  None of the covenants, terms or conditions of this Sublease shall be amended except by a written instrument, duly signed, acknowledged and delivered by the parties.

Section 13.02

Notices

.  All notices to or demands upon Sublessor or Sublessee desired or required to be given under any of the provisions hereof, shall be in writing.  Any notices or demands from Sublessor to Sublessee shall be deemed to have been duly and sufficiently given if the same has been served personally or has been deposited with a nationally recognized overnight courier for next business day delivery addressed to Sublessee at the Sublet Premises, Attn: Michael O’Hanlon, with a copy at the Sublet Premises to the Sublessee’s General Counsel, or at such address as Sublessee may theretofore have furnished by written notice to Sublessor, and any notice or demands from Sublessee to Sublessor shall be deemed to have been duly and sufficiently given if the same has been served personally or deposited with a nationally recognized overnight courier for next business day delivery addressed to Sublessor at  2901 Butterfield Road, Oak Brook, IL  60523, Attn: Alan F. Kremin, with a copy to The Inland Real Estate Group, Inc., 2901 Butterfield Road, Oak Brook, IL 60523, Attn: General Counsel, or at such other address as Sublessor may theretofore have furnished by written notice to Sublessee.  The effective date of notice by overnight courier aforesaid shall be the next Business Day after deposit with such courier.  The term, Business Day, means any day other than Saturday, Sunday or any other day on which banks are required or are authorized to be closed in Chicago, Illinois.

Section 13.03

Covenants Binding on Successors

.  All of the covenants, agreements, conditions and undertakings contained in this Sublease shall extend, inure to, and be binding upon the successors and assigns of the respective parties hereto, the same as if they were in every case specifically named, and wherever in this Sublease reference is made to either of the parties hereto, it shall be held to include and apply to, wherever applicable, the successors and assigns of such party.

Section 13.04

Time of Essence

.  Time is of the essence of this Sublease, and all provisions herein relating thereto shall be strictly construed.



xii


Section 13.05

Captions

.  The captions of this Sublease are for convenience only and are not to be construed as part of this Sublease and shall not be construed as defining, limiting, or construing in any way the scope or intent of the provisions hereof.

Section 13.06

Severability

.  If any term or provision of this Sublease shall to any extent be held invalid or unenforceable, the remaining terms and provisions of this Sublease shall not be affected thereby, but each term and provision of this Sublease shall be valid and be enforced to the fullest extent permitted by law.

Section 13.07

Applicable Law

.  This Sublease shall be construed and enforced in accordance with the laws of the State of Illinois.

Section 13.08

Quiet Enjoyment

.  So long as Sublessee is not in default hereunder, Sublessor warrants that neither Sublessor, nor anyone claiming by, through or under Sublessor, shall interfere with the peaceful and quiet occupation and enjoyment of the Sublet Premises by Sublessee.  Any failure by Sublessor to comply with the foregoing covenant shall not give Sublessee any right to cancel or terminate this Sublease, or to abate, reduce or make deduction from or offset against any Base Rent, Additional Rent or other sum payable under this Sublease, or to fail to perform or observe any other covenants, agreements or obligations of Sublessee hereunder; provided, however, Sublessee shall be entitled to take all other means to enforce the foregoing covenant whether at law or in equity, including but not limited to suit for damages or specific performance.

Section 13.09

Sublessor Default

.  In the event of a default of any term or provision of this Sublease by Sublessor and upon expiration of thirty (30) days’ prior written notice from Sublessee to Sublessor notifying Sublessor of such default and a failure to cure such default by Sublessor during such thirty (30) day period, (provided that if any such default cannot with due diligence be cured within such thirty (30) day period and if the cure of such default shall be promptly commenced (but in any event within such thirty (30) day period) and prosecuted with diligence, the period within which such default may be cured shall be extended for such additional days as may be necessary to (not to exceed 120 additional days as may be reasonably necessary to cure such default with diligence and continuity.) If said default is not timely cured by Sublessor Sublessee shall have the right to pursue all remedies allowed to Sublessee at law or in equity, including but not limited to suit for damages or specific performance; provided, however, Sublessee shall not have the right to offset any Rent due hereunder nor have the right to terminate this Sublease.

Section 13.10

Permitted Contests

.  Sublessee shall not be required to (i) comply with any Legal Requirements, as defined in the Prime Lease; (ii) discharge or remove any liens, encumbrances or charges; or (iii) obtain any waivers or settlements or make any changes or take any action with respect to any encroachment, hindrance, obstruction, violation or impairment, so long as (a) Sublessee shall diligently contest, in good faith and at its expense, the existence, the amount or the validity thereof, the amount of the damages caused thereby, or the extent of its liability therefor, by appropriate proceedings and no action by a third party shall have been taken toward the sale, forfeiture or loss of the Premises or the Prime Sublessor’s interest therein or any part thereof, or the Base Rent or any Additional Rent, or any portion thereof, to satisfy the same or to pay any damages caused by the violation of any Legal Requirement or by any such encroachment, hindrance, obstruction, violation or impairment; (b) there shall not exist (x) any interference with the use and occupancy of the Premises or any part thereof, or (y) any interference with the payment of the Base Rent or any Additional Rent, or any portion thereof; and (c) no such contest shall subject Sublessor or Prime Sublessor to the risk of civil or criminal liability. While any such proceedings are pending, and so long as Prime Landlord’s Mortgagee shall not otherwise object, Sublessor shall not have the right to pay, remove or cause to be discharged the lien or encumbrance thereby being contested nor shall an event of default be deemed to have occurred hereunder



xiii


solely by reason of the exercise of Sublessee’s rights under this section.  Sublessee further agrees that each such contest shall be promptly prosecuted to a final conclusion.  Sublessee will pay, and save Sublessor, Prime Landlord and Prime Landlord’s Mortgagee  harmless against, any and all losses, liabilities, judgments, decrees and costs (including all reasonable attorneys’ fees), in connection with any such contest and will promptly, after the final determination of such contest, fully pay and discharge the amounts which shall be levied, assessed, charged or imposed or be determined to be payable therein or in connection therewith, together with all penalties, fines, interests, costs and expenses thereof or in connection therewith, and perform all acts the performance of which shall be ordered or decreed as a result thereof. Notwithstanding the foregoing, if an event of default hereunder has occurred and is continuing, or demand for security is made by Prime Landlord’s Mortgagee, Sublessee shall not be permitted to enter into or continue pursuit of any contest permitted without first posting security in an amount equal to the amount in dispute plus any penalties and interest with Sublessor or such other person as Sublessor shall approve.

Section 13.11

Sublessor Authority

.  Sublessor represents and warrants to Sublessee that no consent or approval of the Prime Landlord or Prime Landlord’s Mortgagee is required for Sublessor to enter into this Sublease.

Section 13.12

Short Form Sublease

.  This Sublease, or a short form or memorandum thereof, may be filed and/or recorded by Sublessee in the appropriate public office for publishing notice of the existence of leases, provided that the entire cost and expense (including without limitation any recording or filing fees or taxes payable with respect thereto) shall be paid by Sublessee, and provided further, that Sublessee shall not be obligated by virtue of this provision or otherwise to file or record this Sublease or a short form or memorandum thereof.

Section 13.13

Payment of Prime Lease Rent

.  Provided Sublessee timely pays all Base Rent, all Additional Rent and all other charges due from Sublessee hereunder, Sublessor will timely pay all Basic Rent, all Additional Rent and all other charges due Prime Landlord under the Prime Lease and Sublessor will perform all of its other covenants and obligations under the Prime Lease.

Section 13.14

Prime Lease Performance Covenant

.  Provided that Sublessee is not in default under this Sublease, if Prime Landlord is in default or has failed to perform any of its obligations under the terms of the Prime Lease, Sublessor, upon written notice from Sublessee, will make written demand upon Prime Landlord to cure such default.  If Prime Landlord fails to undertake to cure its default or perform its obligations within ten (10) days after receipt of Sublessor’s written demand therefor, Sublessee, and if Sublessee agrees to pay all costs and expenses of Sublessor (to be shared by Sublessor pro rata if Prime Landlord’s default adversely affects Sublessor) Sublessor will take appropriate legal action to enforce the terms of the Prime Lease for the benefit of Sublessee.

Section 13.15

Prime Landlord Recognition

.  Upon execution of this Sublease by Sublessor, Sublessor shall provide Sublessee with an executed copy of the Landlord’s Agreement attached hereto as Exhibit C .

Section 13.16

Non-Exclusive Parking

.  During the Term hereof, Sublessee shall have the non-exclusive right to use the parking areas cross-hatched on Exhibit D attached hereto for the accommodation and parking of automobiles of Sublessee and its officers, agents, employees and invitees.

Section 13.17

Amendment of Prime Lease

.  So long as Sublessor is not in default under this Sublease, Sublessor shall not enter into any amendment of the Prime Lease or exercise any rights under the Prime Lease that might have an adverse effect on Sublessees rights under this Sublease, Sublessee’s



xiv


occupancy of the Sublet Premises or its use of the Sublet Premises without Sublessee’s prior written consent which consent shall not be unreasonably withheld or delayed.

Section 13.18

Non-Disturbance

.  In the event Sublessor shall receive a Non-Disturbance and Attornment Agreement from Prime Landlord’s Mortgagee, Sublessor shall request Prime Landlord to have Prime Landlord’s Mortgagee issue a similar Non-Disturbance and Attornment Agreement to Sublessee.

[SIGNATURES ON FOLLOWING PAGE]





xv




IN WITNESS WHEREOF, Sublessor and Sublessee have each caused this Sublease to be executed all as of the day and year first above written.

Sublessee :

INLAND WESTERN RETAIL REAL ESTATE TRUST, INC ., a Maryland corporation

 

By:

 

 

Its:

 

 

 

 

Sublesso r:

INLAND REAL ESTATE INVESTMENT CORPORATION , a Delaware corporation

 

By:

 

 

Its:

 








EXHIBIT “A”

LEGAL DESCRIPTION OF THE PREMISES

Property Address:

2907 Butterfield Road, Oak Brook, Illinois


Tax Parcel Nos.:

06-28-104-013 (2907)


REAL PROPERTY IN THE CITY OF OAK BROOK, COUNTY OF DUPAGE, STATE OF ILLINOIS, MORE PARTICULARLY DESCRIBED AS FOLLOWS:


PARCEL 1( FEE):


LOT 3 IN OAK BROOK INTERNATIONAL SUBDIVISION, BEING A

RESUBDIVISION OF LOT 1 IN OAK BROOK INTERNATIONAL OFFICE CENTER

SUBDIVISION OF PART OF THE NORTH 1/2 OF SECTION 28, TOWNSHIP 39 NORTH,

RANGE 11, EAST OF THE THIRD PRINCIPAL MERIDIAN, ACCORDING TO THE PLAT

THEREOF RECORDED JUNE 14,1995 AS DOCUMENT NUMBER R95-072664,

(EXCEPTING THEREFROM THAT PART OF LOT 3 DESCRIBED AS BEGINNING AT THE

MOST NORTHWEST CORNER OF SAID LOT 3; THENCE NORTH 87 DEGREES 10

MINUTES, 30 SECONDS EAST ALONG A NORTH LINE OF SAID LOT 3 A DISTANCE OF

10.90 FEET; THENCE SOUTH 00 DEGREES, 14 MINUTES, 08 SECONDS WEST A

DISTANCE OP 204.16 FEET TO A POINT ON THE WEST LINE OF SAID LOT 3

(ALSO BEING THE EAST LINE OF ILLINOIS STATE TOLL HIGHWAY COMMISSION PERMANENT EASEMENT E2-63.1); THENCE NORTH 02 DEGREES 49 MINUTES 30

SECONDS WEST ALONG THE WEST LINE OF SAID LOT 3, A DISTANCE OF 203.87 FEET TO THE POINT OF BEGINNING), IN DUPAGE COUNTY, ILLINOIS.


PARCEL 2 (EASEMENT):


PERPETUAL EASEMENT FOR THE BENEFIT OF PARCEL 1 TO ENTER WON PART OF

THE NORTHERN ILLINOIS GAS COMPANY RIGHT OF WAY TOGETHER WITH

THE RIGHT TO FREE ACCESS TO AND USE THEREOF FOR LANDSCAPING PURPOSES AND TOGETHER WITH THE RIGHT OF FREE ACCESS TO AND USE THE SURFACE THEREOF

FOR CONSTRUCTION, RECONSTRUCTION, MAINTENANCE, REPAIR AND USE OF

SERVICE AND PRIVATE DRIVES AND AREAS FOR PARKING OF VEHICLES INCLUDING

THE PAVING AND IMPROVING OF SUCH SURFACE AREAS FOR SAID PURPOSES AND

FOR NO OTHER PURPOSE. AS CREATED BY AN INSTRUMENT RECORDED ON

JANUARY 19,1961, IN DUPAGE COUNTY, ILLINOIS , AS DOCUMENT 993993, AND ..

ASSIGNMENT RECORDED AS DOCUMENT R67-9069 AND AUTHORIZATION

RECORDED AS DOCUMENT R74-03288. OVER THE FOLLOWING DESCRIBED REAL

ESTATE: THAT PART OF THE NORTHERN ILLINOIS GAS COMPANY RIGHT OF WAY,



097245 000097 DALLAS 1869997.6




AS SHOWN ON THE NORTHERN ILLINOIS GAS COMPANY TOWNSHIP'

ASSESSMENT PLAT NUMBER 1 SHOWING RIGHT OF WAY OF NORTHERN ILLINOIS

GAS COMPANY THROUGH PART OF SECTIONS 31,30,29,28,27;26,25 IN TOWNSHIP

39 NORTH, RANGE' 11, EAST OF THE THIRD PRINCIPAL MERIDIAN, DUPAGE COUNTY,

ILLINOIS, RECORDED AS DOCUMENT NUMBER R64-29042, IN THE RECORDER'S

OFFICE OF DUPAGE COUNTY, ILLINOIS MORE PARTICULARLY DESCRIBED AS

FOLLOWS: COMMENCING AT A POINT ON SOUTHEASTERLY CORNER OF LOT 2 IN

THE SUBDIVISION OF LOT 2 IN OAK BROOK INTERNATIONAL OFFICE CENTER

SUBDIVISION. BEING A SUBDIVISION IN PART OF THE NORTH 112 OF SECTION 28,

TOWNSHIP 39 NORTH, RANGE 11, EAST OF THE THIRD PRINCIPAL MERIDIAN, IN

DUPAGE COUNTY, ILLINOIS, RECORDED AS DOCUMENT NUMBER R76-78775, IN THE

RECORDER'S OFFICE OF DUPAGE COUNTY, ILLINOIS, SAID POINT BEING ALSO ON

THE NORTHWESTERLY LINE OF SAID NORTHERN ILLINOIS GAS COMPANY RIGHT OF

WAY; THENCE SOUTH 24 DEGREES, 32 MINUTES, 23 SECONDS EAST ALONG THE

PROLONGATION OF THE NORTHEASTERLY LINE OF LOT 2 IN SAID SUBDIVISION OF

LOT 2 IN OAK BROOK INTERNATIONAL OFFICE CENTER SUBDIVISION, FOR A

DISTANCE OF 82.50 FEET TO THE SOUTHEASTERLY LINE OF SAID NORTHERN

ILLINOIS GAS COMPANY RIGHT OF WAY, THENCE SOUTH 65 DEGREES, 27 MINUTES,

37 SECONDS WEST ALONG SAID SOUTHEASTERLY LINE OF THE NORTHERN ILLINOIS

GAS COMPANY RIGHT OF WAY, FOR A DISTANCE OF 101 8.67 FEET TO THE POINT OF

BEGINNING; THENCE CONTINUING SOUTH 65 DEGREES, 27 MINUTES, 37 SECONDS

WEST ALONG THE LAST DESCRIBED LINE, FOR A DISTANCE OF 724.13 FEET TO A

POINT ON THE: PROLONGATION OF THE EASTERLY LINE OF TRACT 1-B, AS SHOWN

ON BUTLER-COMPANY-ILLINOIS TOLLWAY ASSESSMENT PLAT NUMBER 1

RECORDED DECEMBER 27, 1960 AS DOCUMENT NUMBER 99 1695, IN THE

RECORDER'S OFFICE OF DUPAGE COUNTY, ILLINOIS; THENCE NORTH 5 DEGREES, 43

MINUTES, 44 SECONDS EAST ALONG SAID PROLONGATION OF THE EASTERLY LINE

OF TRACT 1-B , FOR A DISTANCE OF 95.52 FEET TO A POINT ON THE SOUTHERLY

MOST SOUTHWESTERLY CORNER OF LOT 1 IN OAK BROOK INTERNATIONAL OFFICE

CENTER SUBDIVISION OF PART OF THE NORTH 1/2 OF SECTION 28, TOWNSHIP 39

NORTH, RANGE 11, EAST OF THE THIRD PRINCIPAL MERIDIAN, IN DUPAGE COUNTY,

ILLINOIS, RECORDED AS DOCUMENT NUMBER 72-4, IN THE RECORDER'S OFFICE OF

DUPAGE COUNTY, ILLINOIS, SAID POINT BEING ALSO ON SAID NORTHWESTERLY

LINE OF THE NORTHERN ILLINOIS GAS COMPANY RIGHT OF WAY, THENCE NORTH

65 DEGREES, 27 MINUTES, 37 SECONDS EAST ALONG THE SOUTHEASTERLY LINE OF

SAID LOT 1 IN THE OAK BROOK INTERNATIONAL OFFICE CENTER SUBDIVISION,

BEING ALSO SAID NORTHWESTERLY LINE OF THE NORTHERN ILLINOIS GAS

COMPANY RIGHT OF WAY, FOR A DISTANCE OF 672.81 FEET TO THE SOUTHERLY

MOST SOUTHWESTERLY CORNER OF LOT 2 IN THE SUBDIVISION OF LOT 2 IN OAK

BROOK INTERNATIONAL OFFICE CENTER SUBDIVISION, THENCE SOUTH 26

DEGREES, 44 MINUTES 28 SECONDS EAST, FOR A DISTANCE OF 82.56 FEET TO SAD

POINT OF BEGINNING.


PARCEL 3 (EASEMENT):



097245 000097 DALLAS 1869997.6




NON-EXCLUSIVE, PERPETUAL EASEMENT FOR THE BENEFIT OF PARCEL 1, AS

CREATED BY DECLARATION AND GRANT OF EASEMENTS MADE BY LASALLE

, NATIONAL BANK, AS TRUSTEE UNDER TRUST AGREEMENT DATED NOVEMBER 3,

1971 AND KNOWN AS TRUST NUMBER 43529; LASALLE NATIONAL BANK, AS

TRUSTEE UNDER TRUST AGREEMENT DATED NOVEMBER 4, 1973 AND KNOWN AS

TRUST NUMBER 46570 AND LASALLE NATIONAL BANK, AS TRUSTEE UNDER TRUST

, AGREEMENT DATED DECEMBER 27, 1976 AND KNOWN AS TRUST NUMBER 51894,

DATED MAY 27, 1977 AND RECORDED NOVEMBER 1, 1977 AS DOCUMENT NUMBER

R77-100235, OVER AND UPON ALL DRIVEWAYS AS IDENTIFIED ON .EXHIBIT "D"

ATTACHED THERETO AND AS SHOWN ON EXHIBIT "A" OF THE INSTRUMENT

RECORDED JUNE 20, 1995, AS DOCUMENT NUMBER R95-75460, OVER THE

FOLLOWING DESCRIBED PROPERTY LOT 1 IN OAK BROOK INTERNATIONAL

SUBDIVISION, BEING A RESUBDIVISION OF LOT 1 IN OAK BROOK INTERNATIONAL

OFFICE CENTER SUBDIVISION OF PART OF THE NORTH 1/2 OF SECTION 28,

TOWNSHIP 39 NORTH, RANGE-I I, EAST OF THE THIRD PRINCIPAL MERIDIAN,

ACCORDING TO THE PLAT THEREOF RECORDED JUNE 14, 1995 AS DOCUMENT R95-

072664, IN DUPAGE COUNTY, ILLINOIS; AND LOTS 1 AND 2 IN OF THE SUBDIVISION

OF LOT 2 IN OAK BROOK INTERNATIONAL OFFICE CENTER SUBDIVISION, OF THE

NORTH 1/2 OF SECTION 28, TOWNSHIP 39 NORTH, RANGE 11 EAST OF THE THIRD

PRINCIPAL MERIDIAN, ACCORDING TO THE PLAT THEREOF RECORDED NOVEMBER

1, 1976 AS DOCUMENT NUMBER R76-78775, DUPAGE COUNTY ILLINOIS. .




PARCEL 4 (EASEMENT):


NON-EXCLUSIVE, PERPETUAL EASEMENT FOR THE BENEFIT OF PARCEL 1, FOR

INGRESS AND EGRESS, UTILITY AND DRAINAGE EASEMENTS, HVAC EQUIPMENT,

AND SIGNS UNDER AND BY VIRTUE OF THE EASEMENTS, COVENANTS AND

RESTRICTIONS AGREEMENT RECORDED JUNE 20, 1995 AS DOCUMENT NUMBER R95-

075460, ON, OVER AND ACROSS THOSE PORTIONS OF THE LAND DESCRIBED

THEREIN DESIGNATED FOR SAID PURPOSES BY SAID INSTRUMENT, OVER THE

FOLLOWING DESCRIBED PROPERTY: LOT 1 IN OAK BROOK INTERNATIONAL

SUBDIVISION, BEING A RESUBDIVISION OF LOT 1 M OAK BROOK INTERNATIONAL

OFFICE CENTER SUBDIVISION OF PART OF THE NORTH 1/2 OF SECTION 28,

TOWNSHIP 39 NORTH, RANGE 11, EAST OF THE THIRD PRINCIPAL MERIDIAN,

ACCORDING TO THE PLAT THEREOF RECORDED JUNE 14, 1995 AS DOCUMENT

NUMBER R95-072664, IN DUPAGE COUNTY, ILLINOIS.




097245 000097 DALLAS 1869997.6




EXHIBIT “B”

SUBLET PREMISES

[EXHIBIT10556SUBLEASEAGMT002.GIF]







[EXHIBIT10556SUBLEASEAGMT004.GIF]







[EXHIBIT10556SUBLEASEAGMT006.GIF]







EXHIBIT “C”

LANDLORD’S AGREEMENT

LANDLORD’S  AGREEMENT



THIS LANDLORD’S AGREEMENT (this “ Agreement ”) is made and entered into this __ day of ____________, 2007 by and among INLAND 2905 & 2907 BUTTERFIELD ROAD, L.L.C. , a Delaware limited liability company (“ Landlord ”) and INLAND WESTERN RETAIL REAL ESTATE TRUST, INC. , a Maryland corporation (“ Subtenant ”).


R E C I T A L S


Landlord is the owner in fee of that certain real property located at 2905 and 2907 Butterfield Road, Oak Brook, Illinois (the “ Property ”). By lease agreement dated May 12, 2005 (the “ Prime Lease ”) by and between Landlord and Inland Real Estate Investment Corporation, a Delaware corporation (“ Tenant ”), Landlord leased the Property to Tenant, and Tenant leased the Property from Landlord.  


Tenant and Subtenant have entered into a sublease (the “ Sublease ”) on ______ ___, 2007 for that portion of the Property commonly known as Suites 120, 200 and 300 of the 2907  Butterfield Road Building and consisting of 36,740 rentable square feet (the “ Premises ”).  


Landlord and Subtenant desire, pursuant to the provisions set forth in this Agreement, to ensure that Subtenant retains possession of the Premises for the entire term of the Sublease pursuant to the terms of the Sublease.


NOW, THEREFORE, for good, lawful and valuable consideration, including the mutual undertakings of the parties hereto, the receipt and sufficiency of which are acknowledged by each of the parties hereto, it is covenanted and agreed as follows:


1.

Landlord’s Acknowledgment of the Sublease .  Landlord hereby acknowledges and agrees that Subtenant is a Permitted Transferee as defined in Section 20.1 of the Prime Lease and that the subletting of the Premises by Tenant to Subtenant is in compliance with the Prime Lease.  


2.

  Non-Disturbance .  Landlord shall not, in the exercise of any of the right arising or which may arise out of the Prime Lease or of any instrument modifying or amending the same or entered into in substitution or replacement thereof, disturb or deprive Subtenant in, or of, its possession or its right to possession of the Premises or of any right or privilege granted to or inuring to the benefit of Subtenant under the Sublease, provided the Sublease is then in full force and effect and Subtenant is not in default under the Sublease, and provided that any such right or privilege under the Sublease is no greater or different than any right or privilege provided to Tenant under the Prime Lease.


3.

Recognition and Attornment .  In the event of the termination of the Prime Lease by exercise of any remedy provided for therein, including re-entry, notice, surrender, summary proceedings or other action or proceeding or otherwise, or, in the event the Prime Lease shall terminate or expire for any reason before any of the dates provided in the Sublease for the termination of the initial or renewal terms of the Sublease, and if the Sublease shall, immediately prior to such surrender, termination or expiration, be in full force and effect and Subtenant shall not be in default under the Sublease, then, and in any of said events, Subtenant shall not be made a party in any action or proceeding to remove or evict the



4





Tenant nor shall the Subtenant be evicted or removed or its possession or right of possession be disturbed or in anyway interfered with.  In such event: (a) the Sublease shall continue in full force and effect as a direct lease from Landlord to Subtenant under the terms and provisions of the Sublease for the balance of the term thereof remaining, including any extensions therein provided; (b) Landlord shall continue to recognize the estate and rights of Subtenant created under the

Sublease; and (c) the terms of the Sublease, and Subtenant’s sub-leasehold estate in the Premises shall not then or thereafter be terminated, disturbed or adversely affected, except in accordance with the terms and provisions of the Sublease.  Subtenant shall and hereby agrees to attorn to Landlord under such circumstances.  


4.

Notice .  All notices which may or are required to be sent under this Agreement shall be in writing and shall be deemed to have been given (i) when hand delivered, (ii) if by nationally recognized overnight delivery service (which provides a receipt of delivery), postage prepaid, or the next business day following deposit of such notice with such carrier, or (iii) when sent by telecopier (with a copy by either the method described in clause (i) or (ii) of this paragraph, to the addresses first above set forth with required copies to the following:


Subtenant:

2907 Butterfield Road

Oak Brook, Illinois 60523

Attn:  Michael O. Hanlon


With a copy to:  Duane Morris LLP

227 West Monroe, Suite 3400

Chicago, Illinois 60606

Attn:  David Kaufman, Esq.


Landlord:

2901 Butterfield Road

Oak Brook, Illinois 60523

Attn:  Paul Wheeler


With a copy to:  Robert H. Baum

c/o The Inland Real Estate Group, Inc.

2901 Butterfield Road

Oak Brook, Illinois 60523


5.

Modifications .  No modification, amendment, waiver or release of any provision of this Agreement or of any right, obligation, claim or cause of action arising thereunder shall be valid or binding for any purpose whatsoever unless in writing and duly executed by the party against whom the same is sought to be asserted.


6.

Successors .  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors, assigns and sublessees and any subsequent owner of the Property.


IN WITNESS WHEREOF , the parties have executed this Agreement as of the date first above written.


LANDLORD:


INLAND 2905 & 2907 BUTTERFIELD ROAD, L.L.C. , a Delaware limited liability company









By:

Name:

Title:

        



SUBTENANT:


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a Maryland corporation


By:

Name:

Title: ________________________________









EXHIBIT “D”

PARKING AREAS


[EXHIBIT10556SUBLEASEAGMT008.GIF]








EXHIBIT 10.557

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (this “Agreement”) is made as of this 14th day of August, 2007, by and between INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a Maryland corporation (“IWEST”), and Daniel L. Goodwin (the “Consultant”).

RECITALS:

A.

IWEST is a real estate investment trust which owns, operates and acquires a diversified portfolio of real estate, primarily multi-tenant shopping centers and single-user net lease properties (the “Business”).

B.

IWEST, IWEST Acquisition 1, Inc., IWEST Acquisition 2, Inc., IWEST Acquisition 3, Inc., IWEST Acquisition 4, Inc., Inland Western Retail Real Estate Advisory Services, Inc. (the “Advisor”), Inland Southwest Management Corp. (“Southwest”), Inland Northwest Management Corp. (“Northwest”), Inland Western Management Corp. (“Western”), Inland Real Estate Investment Corporation, and IWEST Merger Agent, LLC, in its capacity as agent for certain stockholders, have entered into that certain Agreement and Plan of Merger, dated as of August 14, 2007 (the “Merger Agreement”), pursuant to which the Advisor, Southwest, Northwest and Western will each become a wholly-owned subsidiary of IWEST and/or its Affiliates (as defined herein) (collectively, the “Mergers”).

C.

Consultant, as an officer of an Affiliate of the Advisor has obtained certain unique and particular talents and abilities with regard to the Business and will provide IWEST with strategic and operational assistance for the Engagement Term (as defined herein), including, without limitation making recommendations and providing guidance to IWEST as to prospective investment, financing, acquisition, disposition, development, joint venture and other real estate opportunities contemplated from time to time by IWEST and the Board of Directors (collectively, the “Consulting Services”).  For purposes herein, the term (i) “Affiliate” means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified and (ii) “control” or any similar term means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting shares, by contract or otherwise.  

D.

The Consultant will receive benefits from consummating the Mergers as a shareholder of one or more of the Advisor, Southwest, Northwest and Western.

E.

IWEST and the Consultant are entering into this Agreement concurrently with the execution of the Merger Agreement, subject to the terms, conditions and covenants hereinafter set forth.  Terms not otherwise defined herein shall have the meaning ascribed to the term in the Merger Agreement.

NOW, THEREFORE, in consideration of the foregoing and the agreements, covenants and conditions set forth herein, the receipt and sufficiency of which is hereby acknowledged, the Consultant and IWEST hereby agree as follows:

ARTICLE I

1.1

ENGAGEMENT .  IWEST hereby engages Consultant on a non-exclusive basis, and Consultant hereby accepts such engagement upon the terms and conditions hereinafter set forth.  Upon reasonable prior notice to Consultant, the Consultant shall use his commercially reasonable efforts to



provide IWEST with the Consulting Services at the Chief Executive Officer of IWEST’s or IWEST’s Board’s request.  At the Chief Executive Officer of IWEST’s or its Board’s request, Consultant shall use commercially reasonable efforts to attend meetings of senior management of IWEST with respect to the near and long-term operations of IWEST and its Affiliates.  Consultant shall also provide such additional services as may be reasonably requested from time to time by the Board, consistent with the services provided to IWEST or any Service Provider prior to the date of this Agreement by Consultant, other than those services that are contemplated to be provided pursuant to the Services Agreements (as defined in the Merger Agreement) as of the date of this Agreement.  The Consulting Services to be provided hereunder require Consultant to attend, at the Chief Executive Officer of IWEST’s or its Board of Directors’ request, certain meetings of the Board of Directors or management team of IWEST of the kind and nature attended by Consultant prior to the date of this Agreement (i.e., Board of Directors meetings, management committee meetings, audit committee meetings and acquisition committee meetings).  IWEST acknowledges that Consultant is providing the Consulting Services solely in his capacity as a consultant and that, with respect to Consulting Services, Consultant’s status shall be that of an independent contractor, and not that of an agent or employee of IWEST.  Consultant shall not hold himself out as, nor claim to be acting as, an employee or agent of IWEST solely as a result of providing the Consulting Services.  Consultant is not authorized to, and shall not, make or undertake any agreement, understanding, waiver or representation on behalf of IWEST in his capacity as Consultant, except as may be provided in a separate Ancillary Agreement.

1.2

ACTIVITIES AND DUTIES DURING ENGAGEMENT .  Consultant represents and warrants to IWEST that he is able to accept engagement by IWEST as Consultant; provided, however, that Consultant and IWEST acknowledge and agree that Consultant will devote a limited amount of time to his duties hereunder, and nothing contained herein shall restrict Consultant from being employed by or accepting employment, consulting arrangements or other positions with IWEST or other businesses, including businesses that may compete with the business conducted by IWEST, provided that such activities do not violate Article IV hereof.

ARTICLE II

2.1

TERM .  

(a)

Unless terminated earlier in accordance with Section 2.1(b) or Section 2.1(c) hereof, the term of this Agreement shall automatically commence on the Closing Date (as defined in the Merger Agreement) (but only upon the Closing Date) hereof and shall last for a period of three (3) years (such period being hereinafter referred to as the “Term”).  Notwithstanding the foregoing, IWEST may terminate this Agreement at any time, with or without cause (the Term, as it may be extended or terminated pursuant to this Article II, is herein referred to as the “Engagement Term”).

(b)

The Consultant shall have the option, but not the obligation, to terminate the Engagement Term upon the occurrence of any of the following events:

(i)

Disability of Consultant.  For purposes of this Agreement, the term “disability” (or any similar term) shall mean any bodily injury, disease, illness, or emotional or nervous disorder that prevents the Consultant from performing any or all Consulting Services for a period of at least thirty (30) consecutive days;

(ii)

The failure of IWEST to perform its obligations provided herein and the continuance of such failure for a period of thirty (30) consecutive days



2



after receipt by IWEST from the Consultant of written notice of such failure to perform ; or

(iii)

The occurrence of a Change in Control Event (as defined herein).

(c)

This Agreement shall automatically terminate upon the death of Consultant.

2.2

DEFINITION OF “CHANGE IN CONTROL EVENT” .

A “Change in Control Event” means the occurrence of one or more of the following:

(a)

Any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of IWEST to any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended; provided, however, that any sale, lease, exchange or transfer to (including, without limitation, any merger or other business combination with or into) any of the following shall not constitute a Change in Control Event:  (i) any Affiliate controlled by IWEST, (ii) Inland Real Estate Corporation, (iii) Inland American Real Estate Trust, Inc., (iv) The Inland Group, Inc., or (v) any Affiliate controlled by any of the persons listed in clauses (i) through (iv) above (all of the entities described in clauses (i) through (v) above to be hereinafter sometimes referred to as the “Inland Companies”);

(b)

The approval by the holders of the outstanding shares of IWEST of any plan or proposal for the liquidation or dissolution of IWEST;

(c)

Any person or group of related persons (other than any one or more of the Inland Companies) shall become the owner, directly or indirectly, beneficially or of record, of shares of IWEST representing more than twenty-five percent (25%) of the aggregate ordinary voting power represented by the issued and outstanding common shares of IWEST; or

(d)

Following any change in the composition of the board of directors of IWEST, a majority of the board of directors of IWEST are not either (i) members of the board of directors of IWEST as of the date hereof, or (ii) members of the board of directors of IWEST whose nomination for election or election to the board of directors of IWEST has been recommended, approved or ratified by at least eighty percent (80%) of the board of directors of IWEST then in office who were either members of the board of directors of IWEST as of the date hereof or whose election as a member of the board of directors of IWEST was previously so approved.

2.3

CESSATION OF RIGHTS AND OBLIGATIONS: SURVIVAL OF CERTAIN PROVISIONS .  On the date of expiration or termination of the Engagement Term for any reason, all of the respective rights, duties, obligations and covenants of the parties hereto, as set forth herein, shall, except as specifically provided herein to the contrary, cease and become of no further force or effect as of the date of said termination, and shall only survive as expressly provided for herein.

ARTICLE III

3.1

NO COMPENSATION .  During the Engagement Term, IWEST shall not pay to Consultant, and Consultant shall not be entitled to receive, any salary or other compensation for his services provided under this Agreement.



3



3.2

REIMBURSEMENT OF EXPENSES .  IWEST shall reimburse Consultant for all ordinary and necessary out-of-pocket business expenses incurred by him and in connection with performing Consulting Services at the request of IWEST or IWEST’s Board hereunder, in the manner and time consistent with IWEST’s policy governing reimbursement of expenses incurred by employees.

ARTICLE IV

4.1

ASSIGNMENT .  This Agreement or any right or interest hereunder may not be assigned by either party without the prior written consent of the other party hereto.  Consultant shall not, without the prior written consent of IWEST, employ, contract with or use the services of any third party in connection with the performance of any of the services to be rendered under this Agreement, or otherwise designate the responsibility of performance of any services to be rendered under this Agreement to any third party.  Any attempted assignment, designation, employment or use in violation of this Section 4.1 shall be void and of no force or effect.

4.2

NON-DISCLOSURE OF CONFIDENTIAL INFORMATION .  Consultant hereby acknowledges and agrees that as a result of his engagement hereunder he may acquire and use information of a special and unique nature and value specifically relating to IWEST that is not generally known to the public such as financial or operating information, business or strategic plans identified as such, property acquisition memorandums or appraisals, entity valuation or models, and employee records (all such information being hereinafter referred to as “Confidential Information”); provided, however, that any information concerning tenants or prospective tenants of, investors or potential investors, or members of any broker-dealer group or potential broker-dealer group to, or of, IWEST shall not constitute “Confidential Information” unless IWEST is subject to a confidentiality agreement concerning such information.  Consultant further acknowledges and agrees that the Confidential Information is of great value to IWEST and that the restrictions and agreements contained in this Agreement are reasonably necessary to protect the Confidential Information and the goodwill of IWEST and its subsidiaries.  Accordingly, Consultant hereby covenants and agrees that:

(a)

During the Engagement Term or at any time thereafter, except to the extent authorized by IWEST or its Affiliates, Consultant will not, directly or indirectly, divulge to any person, firm, corporation, limited liability, company or other organization, other than IWEST or any of its subsidiaries (collectively, “Third Parties”), or use or cause or authorize any Third Parties to use, any Confidential Information (whether or not identified by IWEST as confidential), except to the extent required by law (and then only to the extent required by law and with reasonable prior notice to IWEST and its Board of Directors of such disclosure); and

(b)

Upon the termination of the Engagement Term, Consultant shall deliver or cause to be delivered to IWEST any and all Confidential Information, including drawings, notebooks, keys, data and other documents and materials belonging to IWEST or its subsidiaries which is in his possession or under his control relating to IWEST or its subsidiaries, regardless of the medium upon which it is stored, and will deliver to IWEST upon such termination of the Engagement Term any other property of IWEST or its subsidiaries which is in his possession or under his control; provided, however, that notwithstanding the foregoing, Consultant shall not be required to deliver or cause to be delivered to IWEST any Confidential Information (i) in the possession of Consultant received by Consultant in his capacity as a director of IWEST or (ii) if Consultant is otherwise employed by, or providing other services directly or indirectly through an affiliate of The Inland Group, Inc., to IWEST or its subsidiaries.

Nothing contained in this Section 4.2 shall prohibit or restrict any party from disclosing any information (including Confidential Information):  (a) the disclosure of which is necessary to comply with



4



any applicable laws, including, without limitation, federal or state securities laws, or any exchange listing or similar rules and regulations; (b) the disclosure of which is ordered pursuant to a subpoena or other order from a court or governmental body of competent jurisdiction; (c) which is now, or hereafter is made, generally available to the public other than by disclosure in violation of this Agreement; (d) which was disclosed to the disclosing party by a Third Party that the disclosing party, in good faith, believes was not bound by an obligation of confidentiality; or (e) with respect to which IWEST has consented to the form and content of any such disclosure.  If any party learns that disclosure of such information is sought in or by a court or governmental body of competent jurisdiction or through other means, such party shall (1) give prompt notice to the other party prior to making such disclosure and allow such other party, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information, (2) reasonably cooperate with such other party in its efforts to prevent, or obtain a protective order for, such disclosure, and (3) disclose the minimum amount of information required to be disclosed.

4.3

REMEDIES .  Consultant hereby acknowledges and agrees that the Consulting Services to be rendered by him to IWEST hereunder are of a special and unique nature and that it would be very difficult or impossible to measure the damages resulting from a breach of this Agreement. Consultant hereby further acknowledges and agrees that the restrictions herein are reasonable and necessary for the protection of the business and the goodwill of IWEST and its subsidiaries and that a violation by the Consultant of any such covenant could cause irreparable damage to IWEST or its subsidiaries.  Consultant therefore agrees that any breach by him of any of the covenants or provisions of Article IV of this Agreement shall entitle IWEST or its subsidiaries, in addition to any other remedy available to them under this Agreement, at law or in equity, to a temporary and permanent injunction or any other applicable decree of specific performance, without any bond or security being required thereof, in order to enjoin such breach.  The parties understand and intend that each covenant, provision and restriction agreed to in this Article IV shall be construed as separate and divisible from every other provision and restriction and that the unenforceability of any one provision or restriction shall not limit the enforceability, in whole or in part, of any other provision or restriction and that one or more of all of such provisions or restrictions may be enforced, in whole or in part, as the circumstances warrant.

ARTICLE V
MISCELLANEOUS

5.1

NOTICES .  All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given or delivered: (i) when delivered personally or by commercial messenger; (ii) one business day following deposit with a recognized overnight courier service, provided such deposit occurs prior to the deadline imposed by such service for overnight delivery; (iii) when transmitted, if sent by facsimile copy, provided confirmation of receipt is received by sender and such notice is sent by an additional method provided hereunder, in each case above provided such communication is addressed to the intended recipient thereof as set forth below:

To Consultant at:

Daniel L. Goodwin

2901 Butterfield Road

Oak Brook, Illinois 60523

Facsimile: (630) 218-8033


With a copy to:


Jenner & Block LLP

330 N. Wabash Avenue

Chicago, IL 60611-7603

Attn:  Arnold S. Harrison



5



Facsimile: (312) 923-2702



To IWEST at:

Inland Western Retail Real Estate Trust, Inc.

2901 Butterfield Road

Oak Brook, Illinois 60523

Attn:_____________

Facsimile:_____________


With a copy to:


Duane Morris LLP

227 West Monroe Street

Suite 3400

Chicago, Illinois 60606

Attn:  David J. Kaufman

Facsimile: (312) 499-6701


Any party may change its address for purposes of this paragraph by giving the other party written notice of the new address in the manner set forth above.

5.2

ENTIRE AGREEMENT; AMENDMENTS, ETC .  This Agreement contains the entire agreement and understanding of the parties hereto, and supersedes all prior agreements and understandings relating to the subject matter thereof.  No modification, amendment, waiver or alteration of this Agreement or any provision or term hereof shall in any event be effective unless the same shall be in writing, executed by both parties hereto, and any waiver so given shall be effective only in the specific instance and for the specific purpose for which given.

5.3

SUCCESSORS AND ASSIGNS .  Subject to the terms and restrictions contained in Section 4.1 above, this Agreement shall be binding upon, and inure to the benefit of, and shall be enforceable by, the successors, assignees and transferees of IWEST and its current or future subsidiaries.

5.4

NO CONSTRUCTIVE WAIVERS .  No failure or delay on the part of any party hereto in exercising any right, power or remedy hereunder or pursuant hereto shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder or pursuant thereto.

5.5

SEVERABILITY . Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law but, if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.  If any part of any covenant or other provision in this Agreement is determined by a court of law to be overly broad thereby making the covenant unenforceable, the parties hereto agree, and it is their desire, that the court shall substitute a judicially enforceable limitation in its place, and that as so modified the covenant shall be binding upon the parties as if originally set forth herein.

5.6

COMPLIANCE AND HEADINGS . The headings in this Agreement are intended to be for convenience and reference only, and shall not define or limit the scope, extent or intent or otherwise affect the meaning of any portion hereof.



6



5.7

GOVERNING LAW . The parties agree that this Agreement shall be governed by, interpreted and construed in accordance with the internal laws of the State of Illinois.

5.8

A RBITRATION .   All disputes under this Agreement among the parties to this Agreement which are not resolved within thirty (30) days of a party’s sending of a notice of dispute with respect thereto (each an “Arbitrated Claim”), shall be resolved by binding arbitration, and each party hereto hereby waives any right it may otherwise have to such a resolution of any Arbitrated Claim by any means other than arbitration pursuant to this Section 5.8 .  As a minimum set of rules in the arbitration, the parties agree as follows:

(a)

The place of the arbitration shall be Chicago, Illinois.  The arbitration must be held in the English language in accordance with the Streamlined Arbitration Rules and Procedures of JAMS in effect on the date hereof, except as modified by this Agreement. The arbitration shall be governed by the Illinois Code of Civil Procedure.

(b)

The arbitration will be held before a single arbitrator selected by (i) IWEST and (ii) the Consultant.  If the parties in interest cannot agree on an arbitrator within fourteen (14) days of the delivery of an Arbitration Demand, JAMS will appoint such arbitrator.  The arbitrator will be knowledgeable regarding commercial transactions similar in nature to the transactions contemplated by this Agreement.

(c)

Any party or parties initiating arbitration (the “Arbitration Claimants”) will give to the other party or parties (the “Arbitration Respondents”) notice of their intention to arbitrate (the “Arbitration Demand”).  The Arbitration Demand will contain a notice regarding the nature of the claim.  The Arbitration Respondents will file an answering statement (the “Arbitration Answer”) within fourteen (14) days after the Arbitration Demand.  The Arbitration Answer will contain a statement setting forth in reasonable detail the Arbitration Respondents’ responses and defenses to the Arbitrated Claim.  If the Arbitration Respondents assert a counterclaim, (i) the Arbitration Respondents shall send it with the Arbitration Answer and such counterclaim must include a statement setting forth in reasonable detail the nature of the counterclaim, the amount involved, if any, and the remedy sought, and (ii) the Arbitration Claimants will file a reply statement (the “Arbitration Reply”) as soon as is reasonably practicable, but in no event later than fourteen (14) days, after the counterclaim. The Arbitration Reply will contain a statement setting forth in reasonable detail the Arbitration Claimants’ responses and defenses to the counterclaim.  If no Arbitration Answer or Arbitration Reply is given within the stated time, the claim or the counterclaim will be assumed to be denied.  Failure to file an Arbitration Answer or Arbitration Reply will not operate to delay the arbitration.

(d)

Unless the parties to the arbitration agree otherwise, the arbitrator may order depositions only for good cause and each party to the Arbitrated Claim may make such document requests and other discovery (other than depositions) as permitted in accordance with the Streamlined Arbitration Rules and Procedures of JAMS in effect on the date hereof.

(e)

The arbitration hearings will be conducted over a period not to exceed thirty (30) days commencing as of the date of the first hearing.  The arbitrator shall make a final decision on the Arbitrated Claim within thirty (30) days of the final hearing. The arbitrator may make such orders with regard to scheduling, allocation of hearing time, or otherwise as he or she deems appropriate to achieve compliance with these time limitations.    The parties have included the foregoing provisions limiting the scope and extent of the arbitration with the intention of providing for prompt, economic and fair resolution of any dispute submitted to arbitration.



7



(f)

The Arbitration Claimants, on the one hand, and the Arbitration Respondents, on the other, will, as an initial matter, equally bear the costs and fees of the arbitration, if applicable, but the arbitrator shall award such costs in inverse proportion as the Arbitration Claimants, on the one hand, and the Arbitration Respondents, on the other, may prevail on the matters resolved by the arbitrator (based on the variance of their respective proposed Arbitration Demand, Arbitration Answer and/or Arbitration Reply, as applicable, from the determination of the arbitrator), which proportionate allocations shall be determined by the arbitrator at the time the determination of the arbitrator is rendered on the merits of the matters submitted.

(g)

The arbitrator shall enter a written award specifying the basis for his or her decision, including findings of fact and conclusions of law, the basis for the damages award and a breakdown of the damages awarded, and the basis for any other remedy.  Any Party dissatisfied with the award may invoke the JAMS Optional Arbitration Appeal Procedure (based on the rules therefor in effect at the time of this Agreement).  Such JAMS Optional Arbitration Appeal shall be limited to whether there are any erroneous conclusions of law, or any findings of fact not supported by substantial evidence.  The appellate arbitral panel may vacate, modify, correct, or affirm the award in whole or in any part.  The award (as modified, corrected, or affirmed by the appellate arbitral panel, or if no such JAMS appeal is taken, as originally rendered by the arbitrator) will be considered as a final and binding resolution of the disagreement.  

(h)

 Any arbitration proceeding will be conducted on a confidential basis, and any Confidential Material disclosed during any such proceeding will be kept confidential by the parties to such proceeding and by the arbitrator.

(i)

The arbitrator’s discretion to fashion remedies hereunder will be no broader or narrower than the legal and equitable remedies available to a court before which such Arbitrated Claim may have been brought but for this Section 5.8 , unless the parties expressly state elsewhere in this Agreement that parties will be subject to broader or narrower legal and equitable remedies than would be available under the law governing this Agreement.

(j)

The arbitral award will be the exclusive remedy of the parties for all claims, counterclaims, issues or accountings presented or pleaded to the arbitrator.  The award will include interest from the date of the Arbitrated Claim until the award is fully paid, computed at the then-prevailing U.S. prime rate, plus five percent (5%).  Any additional costs, fees or expenses incurred in enforcing the arbitral award (or successfully resisting it) will be borne by the party against which enforcement is sought if such award is successfully enforced (or borne by the party seeking to enforce such award if the resisting party successfully resists its enforcement).  Any party may enforce an arbitral award in any court of competent jurisdiction.

5.9

COUNTERPARTS . This Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument.

5.10

NO PRESUMPTION AGAINST DRAFTER . Each of the parties hereto has jointly participated in the negotiation and drafting of this Agreement.  In the event an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by each of the parties hereto and no presumptions or burdens of proof shall arise favoring any party by virtue of the authorship of any provisions of this Agreement.

5.11

ENFORCEMENT .  In the event either of the parties to this Agreement shall bring an action against the other party with respect to the enforcement or breach of any provision of this



8



Agreement, the prevailing party in such action shall recover from the non-prevailing party the costs incurred by the prevailing party with respect to such action including court costs and reasonable attorneys’ fees.

5.12

RECITALS .  The Recitals set forth above are hereby incorporated in and made a part of this Agreement by this reference.

5.13

INDEMNIFICATION .  IWEST agrees to defend, indemnify and hold harmless Consultant for any and all acts taken or omitted to be taken by Consultant hereunder (except for bad faith, gross negligence or willful misconduct) as if Consultant was a director of IWEST as provided in IWEST’s charter and bylaws in accordance with the same terms, conditions, limitations, standards, duties, rights and obligations as a director.  If IWEST enters into an indemnification or similar agreement covering such indemnification matters with any IWEST director, IWEST will offer and enter into a similar indemnification agreement with Consultant.  The provisions of this Section 5.13 shall survive any termination of this Agreement.

[Signature page follows.]



9





IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed and delivered as of the day and year first above written.


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a Maryland corporation


By:

Name:

Its:



CONSULTANT



Daniel L. Goodwin




[SIGNATURE PAGE TO CONSULTING AGREEMENT]




EXHIBIT 10.558

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (this “Agreement”) is made as of this 14th day of August, 2007, by and between INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a Maryland corporation (“IWEST”), and Robert D. Parks (the “Consultant”).

RECITALS:

A.

IWEST is a real estate investment trust which owns, operates and acquires a diversified portfolio of real estate, primarily multi-tenant shopping centers and single-user net lease properties (the “Business”).

B.

IWEST, IWEST Acquisition 1, Inc., IWEST Acquisition 2, Inc., IWEST Acquisition 3, Inc., IWEST Acquisition 4, Inc., Inland Western Retail Real Estate Advisory Services, Inc. (the “Advisor”), Inland Southwest Management Corp. (“Southwest”), Inland Northwest Management Corp. (“Northwest”), Inland Western Management Corp. (“Western”), Inland Real Estate Investment Corporation, and IWEST Merger Agent, LLC, in its capacity as agent for certain stockholders, have entered into that certain Agreement and Plan of Merger, dated as of August 14, 2007 (the “Merger Agreement”), pursuant to which the Advisor, Southwest, Northwest and Western will each become a wholly-owned subsidiary of IWEST and/or its Affiliates (as defined herein) (collectively, the “Mergers”).

C.

Consultant, as an officer of an Affiliate of the Advisor has obtained certain unique and particular talents and abilities with regard to the Business and will provide IWEST with strategic and operational assistance for the Engagement Term (as defined herein), including, without limitation making recommendations and providing guidance to IWEST as to prospective investment, financing, acquisition, disposition, development, joint venture and other real estate opportunities contemplated from time to time by IWEST and the Board of Directors (collectively, the “Consulting Services”).  For purposes herein, the term (i) “Affiliate” means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified and (ii) “control” or any similar term means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting shares, by contract or otherwise.  

D.

The Consultant will receive benefits from consummating the Mergers as a shareholder of one or more of the Advisor, Southwest, Northwest and Western.

E.

IWEST and the Consultant are entering into this Agreement concurrently with the execution of the Merger Agreement, subject to the terms, conditions and covenants hereinafter set forth.  Terms not otherwise defined herein shall have the meaning ascribed to the term in the Merger Agreement.

NOW, THEREFORE, in consideration of the foregoing and the agreements, covenants and conditions set forth herein, the receipt and sufficiency of which is hereby acknowledged, the Consultant and IWEST hereby agree as follows:

ARTICLE I

1.1

ENGAGEMENT .  IWEST hereby engages Consultant on a non-exclusive basis, and Consultant hereby accepts such engagement upon the terms and conditions hereinafter set forth.  Upon reasonable prior notice to Consultant, the Consultant shall use his commercially reasonable efforts to



provide IWEST with the Consulting Services at the Chief Executive Officer of IWEST’s or IWEST’s Board’s request.  At the Chief Executive Officer of IWEST’s or its Board’s request, Consultant shall use commercially reasonable efforts to attend meetings of senior management of IWEST with respect to the near and long-term operations of IWEST and its Affiliates.  Consultant shall also provide such additional services as may be reasonably requested from time to time by the Board, consistent with the services provided to IWEST or any Service Provider prior to the date of this Agreement by Consultant, other than those services that are contemplated to be provided pursuant to the Services Agreements (as defined in the Merger Agreement) as of the date of this Agreement.  The Consulting Services to be provided hereunder require Consultant to attend, at the Chief Executive Officer of IWEST’s or its Board of Directors’ request, certain meetings of the Board of Directors or management team of IWEST of the kind and nature attended by Consultant prior to the date of this Agreement (i.e., Board of Directors meetings, management committee meetings, audit committee meetings and acquisition committee meetings).  Consultant acknowledges the Consulting Services are in addition to, and in no way limit, Consultant’s duties, as applicable, to IWEST as a director of IWEST but nothing in this Agreement shall have the effect of expanding the scope of fiduciary duties that Consultant may owe IWEST under applicable law.  IWEST acknowledges that Consultant is providing the Consulting Services solely in his capacity as a consultant and not as a director, if applicable, and that, with respect to Consulting Services, Consultant’s status shall be that of an independent contractor, and not that of an agent or employee of IWEST.  Consultant shall not hold himself out as, nor claim to be acting as, an employee or agent of IWEST solely as a result of providing the Consulting Services.  Consultant is not authorized to, and shall not, make or undertake any agreement, understanding, waiver or representation on behalf of IWEST in his capacity as Consultant, except as may be provided in a separate Ancillary Agreement.

1.2

ACTIVITIES AND DUTIES DURING ENGAGEMENT .  Consultant represents and warrants to IWEST that he is able to accept engagement by IWEST as Consultant; provided, however, that Consultant and IWEST acknowledge and agree that Consultant will devote a limited amount of time to his duties hereunder, and nothing contained herein shall restrict Consultant from being employed by or accepting employment, consulting arrangements or other positions with IWEST or other businesses, including businesses that may compete with the business conducted by IWEST, provided that such activities do not violate Article IV hereof.

ARTICLE II

2.1

TERM .  

(a)

Unless terminated earlier in accordance with Section 2.1(b) or Section 2.1(c) hereof, the term of this Agreement shall automatically commence on the Closing Date (as defined in the Merger Agreement) (but only upon the Closing Date) hereof and shall last for a period of three (3) years (such period being hereinafter referred to as the “Term”).  Notwithstanding the foregoing, IWEST may terminate this Agreement at any time, with or without cause (the Term, as it may be extended or terminated pursuant to this Article II, is herein referred to as the “Engagement Term”).

(b)

The Consultant shall have the option, but not the obligation, to terminate the Engagement Term upon the occurrence of any of the following events:

(i)

Disability of Consultant.  For purposes of this Agreement, the term “disability” (or any similar term) shall mean any bodily injury, disease, illness, or emotional or nervous disorder that prevents the Consultant from performing any or all Consulting Services for a period of at least thirty (30) consecutive days;



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(ii)

The failure of IWEST to perform its obligations provided herein and the continuance of such failure for a period of thirty (30) consecutive days after receipt by IWEST from the Consultant of written notice of such failure to perform ; or

(iii)

The occurrence of a Change in Control Event (as defined herein).

(c)

This Agreement shall automatically terminate upon the death of Consultant.

2.2

DEFINITION OF “CHANGE IN CONTROL EVENT” .

A “Change in Control Event” means the occurrence of one or more of the following:

(a)

Any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of IWEST to any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended; provided, however, that any sale, lease, exchange or transfer to (including, without limitation, any merger or other business combination with or into) any of the following shall not constitute a Change in Control Event:  (i) any Affiliate controlled by IWEST, (ii) Inland Real Estate Corporation, (iii) Inland American Real Estate Trust, Inc., (iv) The Inland Group, Inc., or (v) any Affiliate controlled by any of the persons listed in clauses (i) through (iv) above (all of the entities described in clauses (i) through (v) above to be hereinafter sometimes referred to as the “Inland Companies”);

(b)

The approval by the holders of the outstanding shares of IWEST of any plan or proposal for the liquidation or dissolution of IWEST;

(c)

Any person or group of related persons (other than any one or more of the Inland Companies) shall become the owner, directly or indirectly, beneficially or of record, of shares of IWEST representing more than twenty-five percent (25%) of the aggregate ordinary voting power represented by the issued and outstanding common shares of IWEST; or

(d)

Following any change in the composition of the board of directors of IWEST, a majority of the board of directors of IWEST are not either (i) members of the board of directors of IWEST as of the date hereof, or (ii) members of the board of directors of IWEST whose nomination for election or election to the board of directors of IWEST has been recommended, approved or ratified by at least eighty percent (80%) of the board of directors of IWEST then in office who were either members of the board of directors of IWEST as of the date hereof or whose election as a member of the board of directors of IWEST was previously so approved.

2.3

CESSATION OF RIGHTS AND OBLIGATIONS: SURVIVAL OF CERTAIN PROVISIONS .  On the date of expiration or termination of the Engagement Term for any reason, all of the respective rights, duties, obligations and covenants of the parties hereto, as set forth herein, shall, except as specifically provided herein to the contrary, cease and become of no further force or effect as of the date of said termination, and shall only survive as expressly provided for herein.

ARTICLE III

3.1

NO COMPENSATION .  During the Engagement Term, IWEST shall not pay to Consultant, and Consultant shall not be entitled to receive, any salary or other compensation for his services provided under this Agreement.



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3.2

REIMBURSEMENT OF EXPENSES .  IWEST shall reimburse Consultant for all ordinary and necessary out-of-pocket business expenses incurred by him and in connection with performing Consulting Services at the request of IWEST or IWEST’s Board hereunder, in the manner and time consistent with IWEST’s policy governing reimbursement of expenses incurred by employees.

ARTICLE IV

4.1

ASSIGNMENT .  This Agreement or any right or interest hereunder may not be assigned by either party without the prior written consent of the other party hereto.  Consultant shall not, without the prior written consent of IWEST, employ, contract with or use the services of any third party in connection with the performance of any of the services to be rendered under this Agreement, or otherwise designate the responsibility of performance of any services to be rendered under this Agreement to any third party.  Any attempted assignment, designation, employment or use in violation of this Section 4.1 shall be void and of no force or effect.

4.2

NON-DISCLOSURE OF CONFIDENTIAL INFORMATION .  Consultant hereby acknowledges and agrees that as a result of his engagement hereunder he may acquire and use information of a special and unique nature and value specifically relating to IWEST that is not generally known to the public such as financial or operating information, business or strategic plans identified as such, property acquisition memorandums or appraisals, entity valuation or models, and employee records (all such information being hereinafter referred to as “Confidential Information”); provided, however, that any information concerning tenants or prospective tenants of, investors or potential investors, or members of any broker-dealer group or potential broker-dealer group to, or of, IWEST shall not constitute “Confidential Information” unless IWEST is subject to a confidentiality agreement concerning such information.  Consultant further acknowledges and agrees that the Confidential Information is of great value to IWEST and that the restrictions and agreements contained in this Agreement are reasonably necessary to protect the Confidential Information and the goodwill of IWEST and its subsidiaries.  Accordingly, Consultant hereby covenants and agrees that:

(a)

During the Engagement Term or at any time thereafter, except to the extent authorized by IWEST or its Affiliates, Consultant will not, directly or indirectly, divulge to any person, firm, corporation, limited liability, company or other organization, other than IWEST or any of its subsidiaries (collectively, “Third Parties”), or use or cause or authorize any Third Parties to use, any Confidential Information (whether or not identified by IWEST as confidential), except to the extent required by law (and then only to the extent required by law and with reasonable prior notice to IWEST and its Board of Directors of such disclosure); and

(b)

Upon the termination of the Engagement Term, Consultant shall deliver or cause to be delivered to IWEST any and all Confidential Information, including drawings, notebooks, keys, data and other documents and materials belonging to IWEST or its subsidiaries which is in his possession or under his control relating to IWEST or its subsidiaries, regardless of the medium upon which it is stored, and will deliver to IWEST upon such termination of the Engagement Term any other property of IWEST or its subsidiaries which is in his possession or under his control; provided, however, that notwithstanding the foregoing, Consultant shall not be required to deliver or cause to be delivered to IWEST any Confidential Information (i) in the possession of Consultant received by Consultant in his capacity as a director of IWEST or (ii) if Consultant is otherwise employed by, or providing other services directly or indirectly through an affiliate of The Inland Group, Inc., to IWEST or its subsidiaries.

Nothing contained in this Section 4.2 shall prohibit or restrict any party from disclosing any information (including Confidential Information):  (a) the disclosure of which is necessary to comply with



4



any applicable laws, including, without limitation, federal or state securities laws, or any exchange listing or similar rules and regulations; (b) the disclosure of which is ordered pursuant to a subpoena or other order from a court or governmental body of competent jurisdiction; (c) which is now, or hereafter is made, generally available to the public other than by disclosure in violation of this Agreement; (d) which was disclosed to the disclosing party by a Third Party that the disclosing party, in good faith, believes was not bound by an obligation of confidentiality; or (e) with respect to which IWEST has consented to the form and content of any such disclosure.  If any party learns that disclosure of such information is sought in or by a court or governmental body of competent jurisdiction or through other means, such party shall (1) give prompt notice to the other party prior to making such disclosure and allow such other party, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information, (2) reasonably cooperate with such other party in its efforts to prevent, or obtain a protective order for, such disclosure, and (3) disclose the minimum amount of information required to be disclosed.

4.3

REMEDIES .  Consultant hereby acknowledges and agrees that the Consulting Services to be rendered by him to IWEST hereunder are of a special and unique nature and that it would be very difficult or impossible to measure the damages resulting from a breach of this Agreement. Consultant hereby further acknowledges and agrees that the restrictions herein are reasonable and necessary for the protection of the business and the goodwill of IWEST and its subsidiaries and that a violation by the Consultant of any such covenant could cause irreparable damage to IWEST or its subsidiaries.  Consultant therefore agrees that any breach by him of any of the covenants or provisions of Article IV of this Agreement shall entitle IWEST or its subsidiaries, in addition to any other remedy available to them under this Agreement, at law or in equity, to a temporary and permanent injunction or any other applicable decree of specific performance, without any bond or security being required thereof, in order to enjoin such breach.  The parties understand and intend that each covenant, provision and restriction agreed to in this Article IV shall be construed as separate and divisible from every other provision and restriction and that the unenforceability of any one provision or restriction shall not limit the enforceability, in whole or in part, of any other provision or restriction and that one or more of all of such provisions or restrictions may be enforced, in whole or in part, as the circumstances warrant.

ARTICLE V
MISCELLANEOUS

5.1

NOTICES .  All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given or delivered: (i) when delivered personally or by commercial messenger; (ii) one business day following deposit with a recognized overnight courier service, provided such deposit occurs prior to the deadline imposed by such service for overnight delivery; (iii) when transmitted, if sent by facsimile copy, provided confirmation of receipt is received by sender and such notice is sent by an additional method provided hereunder, in each case above provided such communication is addressed to the intended recipient thereof as set forth below:

To Consultant at:

Robert D. Parks

2901 Butterfield Road

Oak Brook, Illinois 60523

Facsimile: (630) 218-8033


With a copy to:


Jenner & Block LLP

330 N. Wabash Avenue

Chicago, IL 60611-7603

Attn:  Arnold S. Harrison



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Facsimile: (312) 923-2702



To IWEST at:

Inland Western Retail Real Estate Trust, Inc.

2901 Butterfield Road

Oak Brook, Illinois 60523

Attn:_____________

Facsimile:_____________


With a copy to:


Duane Morris LLP

227 West Monroe Street

Suite 3400

Chicago, Illinois 60606

Attn:  David J. Kaufman

Facsimile: (312) 499-6701


Any party may change its address for purposes of this paragraph by giving the other party written notice of the new address in the manner set forth above.

5.2

ENTIRE AGREEMENT; AMENDMENTS, ETC .  This Agreement contains the entire agreement and understanding of the parties hereto, and supersedes all prior agreements and understandings relating to the subject matter thereof.  No modification, amendment, waiver or alteration of this Agreement or any provision or term hereof shall in any event be effective unless the same shall be in writing, executed by both parties hereto, and any waiver so given shall be effective only in the specific instance and for the specific purpose for which given.

5.3

SUCCESSORS AND ASSIGNS .  Subject to the terms and restrictions contained in Section 4.1 above, this Agreement shall be binding upon, and inure to the benefit of, and shall be enforceable by, the successors, assignees and transferees of IWEST and its current or future subsidiaries.

5.4

NO CONSTRUCTIVE WAIVERS .  No failure or delay on the part of any party hereto in exercising any right, power or remedy hereunder or pursuant hereto shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder or pursuant thereto.

5.5

SEVERABILITY . Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law but, if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.  If any part of any covenant or other provision in this Agreement is determined by a court of law to be overly broad thereby making the covenant unenforceable, the parties hereto agree, and it is their desire, that the court shall substitute a judicially enforceable limitation in its place, and that as so modified the covenant shall be binding upon the parties as if originally set forth herein.

5.6

COMPLIANCE AND HEADINGS . The headings in this Agreement are intended to be for convenience and reference only, and shall not define or limit the scope, extent or intent or otherwise affect the meaning of any portion hereof.



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5.7

GOVERNING LAW . The parties agree that this Agreement shall be governed by, interpreted and construed in accordance with the internal laws of the State of Illinois.

5.8

A RBITRATION .   All disputes under this Agreement among the parties to this Agreement which are not resolved within thirty (30) days of a party’s sending of a notice of dispute with respect thereto (each an “Arbitrated Claim”), shall be resolved by binding arbitration, and each party hereto hereby waives any right it may otherwise have to such a resolution of any Arbitrated Claim by any means other than arbitration pursuant to this Section 5.8 .  As a minimum set of rules in the arbitration, the parties agree as follows:

(a)

The place of the arbitration shall be Chicago, Illinois.  The arbitration must be held in the English language in accordance with the Streamlined Arbitration Rules and Procedures of JAMS in effect on the date hereof, except as modified by this Agreement. The arbitration shall be governed by the Illinois Code of Civil Procedure.

(b)

The arbitration will be held before a single arbitrator selected by (i) IWEST and (ii) the Consultant.  If the parties in interest cannot agree on an arbitrator within fourteen (14) days of the delivery of an Arbitration Demand, JAMS will appoint such arbitrator.  The arbitrator will be knowledgeable regarding commercial transactions similar in nature to the transactions contemplated by this Agreement.

(c)

Any party or parties initiating arbitration (the “Arbitration Claimants”) will give to the other party or parties (the “Arbitration Respondents”) notice of their intention to arbitrate (the “Arbitration Demand”).  The Arbitration Demand will contain a notice regarding the nature of the claim.  The Arbitration Respondents will file an answering statement (the “Arbitration Answer”) within fourteen (14) days after the Arbitration Demand.  The Arbitration Answer will contain a statement setting forth in reasonable detail the Arbitration Respondents’ responses and defenses to the Arbitrated Claim.  If the Arbitration Respondents assert a counterclaim, (i) the Arbitration Respondents shall send it with the Arbitration Answer and such counterclaim must include a statement setting forth in reasonable detail the nature of the counterclaim, the amount involved, if any, and the remedy sought, and (ii) the Arbitration Claimants will file a reply statement (the “Arbitration Reply”) as soon as is reasonably practicable, but in no event later than fourteen (14) days, after the counterclaim. The Arbitration Reply will contain a statement setting forth in reasonable detail the Arbitration Claimants’ responses and defenses to the counterclaim.  If no Arbitration Answer or Arbitration Reply is given within the stated time, the claim or the counterclaim will be assumed to be denied.  Failure to file an Arbitration Answer or Arbitration Reply will not operate to delay the arbitration.

(d)

Unless the parties to the arbitration agree otherwise, the arbitrator may order depositions only for good cause and each party to the Arbitrated Claim may make such document requests and other discovery (other than depositions) as permitted in accordance with the Streamlined Arbitration Rules and Procedures of JAMS in effect on the date hereof.

(e)

The arbitration hearings will be conducted over a period not to exceed thirty (30) days commencing as of the date of the first hearing.  The arbitrator shall make a final decision on the Arbitrated Claim within thirty (30) days of the final hearing. The arbitrator may make such orders with regard to scheduling, allocation of hearing time, or otherwise as he or she deems appropriate to achieve compliance with these time limitations.    The parties have included the foregoing provisions limiting the scope and extent of the arbitration with the intention of providing for prompt, economic and fair resolution of any dispute submitted to arbitration.



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(f)

The Arbitration Claimants, on the one hand, and the Arbitration Respondents, on the other, will, as an initial matter, equally bear the costs and fees of the arbitration, if applicable, but the arbitrator shall award such costs in inverse proportion as the Arbitration Claimants, on the one hand, and the Arbitration Respondents, on the other, may prevail on the matters resolved by the arbitrator (based on the variance of their respective proposed Arbitration Demand, Arbitration Answer and/or Arbitration Reply, as applicable, from the determination of the arbitrator), which proportionate allocations shall be determined by the arbitrator at the time the determination of the arbitrator is rendered on the merits of the matters submitted.

(g)

The arbitrator shall enter a written award specifying the basis for his or her decision, including findings of fact and conclusions of law, the basis for the damages award and a breakdown of the damages awarded, and the basis for any other remedy.  Any Party dissatisfied with the award may invoke the JAMS Optional Arbitration Appeal Procedure (based on the rules therefor in effect at the time of this Agreement).  Such JAMS Optional Arbitration Appeal shall be limited to whether there are any erroneous conclusions of law, or any findings of fact not supported by substantial evidence.  The appellate arbitral panel may vacate, modify, correct, or affirm the award in whole or in any part.  The award (as modified, corrected, or affirmed by the appellate arbitral panel, or if no such JAMS appeal is taken, as originally rendered by the arbitrator) will be considered as a final and binding resolution of the disagreement.  

(h)

 Any arbitration proceeding will be conducted on a confidential basis, and any Confidential Material disclosed during any such proceeding will be kept confidential by the parties to such proceeding and by the arbitrator.

(i)

The arbitrator’s discretion to fashion remedies hereunder will be no broader or narrower than the legal and equitable remedies available to a court before which such Arbitrated Claim may have been brought but for this Section 5.8 , unless the parties expressly state elsewhere in this Agreement that parties will be subject to broader or narrower legal and equitable remedies than would be available under the law governing this Agreement.

(j)

The arbitral award will be the exclusive remedy of the parties for all claims, counterclaims, issues or accountings presented or pleaded to the arbitrator.  The award will include interest from the date of the Arbitrated Claim until the award is fully paid, computed at the then-prevailing U.S. prime rate, plus five percent (5%).  Any additional costs, fees or expenses incurred in enforcing the arbitral award (or successfully resisting it) will be borne by the party against which enforcement is sought if such award is successfully enforced (or borne by the party seeking to enforce such award if the resisting party successfully resists its enforcement).  Any party may enforce an arbitral award in any court of competent jurisdiction.

5.9

COUNTERPARTS . This Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument.

5.10

NO PRESUMPTION AGAINST DRAFTER . Each of the parties hereto has jointly participated in the negotiation and drafting of this Agreement.  In the event an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by each of the parties hereto and no presumptions or burdens of proof shall arise favoring any party by virtue of the authorship of any provisions of this Agreement.

5.11

ENFORCEMENT .  In the event either of the parties to this Agreement shall bring an action against the other party with respect to the enforcement or breach of any provision of this



8



Agreement, the prevailing party in such action shall recover from the non-prevailing party the costs incurred by the prevailing party with respect to such action including court costs and reasonable attorneys’ fees.

5.12

RECITALS .  The Recitals set forth above are hereby incorporated in and made a part of this Agreement by this reference.

5.13

INDEMNIFICATION .  IWEST agrees to defend, indemnify and hold harmless Consultant for any and all acts taken or omitted to be taken by Consultant hereunder (except for bad faith, gross negligence or willful misconduct) as if Consultant was a director of IWEST as provided in IWEST’s charter and bylaws in accordance with the same terms, conditions, limitations, standards, duties, rights and obligations as a director.  If IWEST enters into an indemnification or similar agreement covering such indemnification matters with any IWEST director, IWEST will offer and enter into a similar indemnification agreement with Consultant.  The provisions of this Section 5.13 shall survive any termination of this Agreement.

[Signature page follows.]



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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed and delivered as of the day and year first above written.


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a Maryland corporation


By:

Name:

Its:



CONSULTANT



Robert D. Parks




[SIGNATURE PAGE TO CONSULTING AGREEMENT]




EXHIBIT 10.559

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (this “Agreement”) is made as of this 14th day of August, 2007, by and between INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a Maryland corporation (“IWEST”), and G. Joseph Cosenza (the “Consultant”).

RECITALS:

A.

IWEST is a real estate investment trust which owns, operates and acquires a diversified portfolio of real estate, primarily multi-tenant shopping centers and single-user net lease properties (the “Business”).

B.

IWEST, IWEST Acquisition 1, Inc., IWEST Acquisition 2, Inc., IWEST Acquisition 3, Inc., IWEST Acquisition 4, Inc., Inland Western Retail Real Estate Advisory Services, Inc. (the “Advisor”), Inland Southwest Management Corp. (“Southwest”), Inland Northwest Management Corp. (“Northwest”), Inland Western Management Corp. (“Western”), Inland Real Estate Investment Corporation, and IWEST Merger Agent, LLC, in its capacity as agent for certain stockholders, have entered into that certain Agreement and Plan of Merger, dated as of August 14, 2007 (the “Merger Agreement”), pursuant to which the Advisor, Southwest, Northwest and Western will each become a wholly-owned subsidiary of IWEST and/or its Affiliates (as defined herein) (collectively, the “Mergers”).

C.

Consultant, as an officer of an Affiliate of the Advisor has obtained certain unique and particular talents and abilities with regard to the Business and will provide IWEST with strategic and operational assistance for the Engagement Term (as defined herein), including, without limitation making recommendations and providing guidance to IWEST as to prospective investment, financing, acquisition, disposition, development, joint venture and other real estate opportunities contemplated from time to time by IWEST and the Board of Directors (collectively, the “Consulting Services”).  For purposes herein, the term (i) “Affiliate” means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified and (ii) “control” or any similar term means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting shares, by contract or otherwise.  

D.

The Consultant will receive benefits from consummating the Mergers as a shareholder of one or more of the Advisor, Southwest, Northwest and Western.

E.

IWEST and the Consultant are entering into this Agreement concurrently with the execution of the Merger Agreement, subject to the terms, conditions and covenants hereinafter set forth.  Terms not otherwise defined herein shall have the meaning ascribed to the term in the Merger Agreement.

NOW, THEREFORE, in consideration of the foregoing and the agreements, covenants and conditions set forth herein, the receipt and sufficiency of which is hereby acknowledged, the Consultant and IWEST hereby agree as follows:

ARTICLE I

1.1

ENGAGEMENT .  IWEST hereby engages Consultant on a non-exclusive basis, and Consultant hereby accepts such engagement upon the terms and conditions hereinafter set forth.  Upon reasonable prior notice to Consultant, the Consultant shall use his commercially reasonable efforts to



provide IWEST with the Consulting Services at the Chief Executive Officer of IWEST’s or IWEST’s Board’s request.  At the Chief Executive Officer of IWEST’s or its Board’s request, Consultant shall use commercially reasonable efforts to attend meetings of senior management of IWEST with respect to the near and long-term operations of IWEST and its Affiliates.  Consultant shall also provide such additional services as may be reasonably requested from time to time by the Board, consistent with the services provided to IWEST or any Service Provider prior to the date of this Agreement by Consultant, other than those services that are contemplated to be provided pursuant to the Services Agreements (as defined in the Merger Agreement) as of the date of this Agreement.  The Consulting Services to be provided hereunder require Consultant to attend, at the Chief Executive Officer of IWEST’s or its Board of Directors’ request, certain meetings of the Board of Directors or management team of IWEST of the kind and nature attended by Consultant prior to the date of this Agreement (i.e., Board of Directors meetings, management committee meetings, audit committee meetings and acquisition committee meetings).  Consultant acknowledges the Consulting Services are in addition to, and in no way limit, Consultant’s duties, as applicable, to IWEST as a director of IWEST but nothing in this Agreement shall have the effect of expanding the scope of fiduciary duties that Consultant may owe IWEST under applicable law.  IWEST acknowledges that Consultant is providing the Consulting Services solely in his capacity as a consultant and not as a director, if applicable, and that, with respect to Consulting Services, Consultant’s status shall be that of an independent contractor, and not that of an agent or employee of IWEST.  Consultant shall not hold himself out as, nor claim to be acting as, an employee or agent of IWEST solely as a result of providing the Consulting Services.  Consultant is not authorized to, and shall not, make or undertake any agreement, understanding, waiver or representation on behalf of IWEST in his capacity as Consultant, except as may be provided in a separate Ancillary Agreement.

1.2

ACTIVITIES AND DUTIES DURING ENGAGEMENT .  Consultant represents and warrants to IWEST that he is able to accept engagement by IWEST as Consultant; provided, however, that Consultant and IWEST acknowledge and agree that Consultant will devote a limited amount of time to his duties hereunder, and nothing contained herein shall restrict Consultant from being employed by or accepting employment, consulting arrangements or other positions with IWEST or other businesses, including businesses that may compete with the business conducted by IWEST, provided that such activities do not violate Article IV hereof.

ARTICLE II

2.1

TERM .  

(a)

Unless terminated earlier in accordance with Section 2.1(b) or Section 2.1(c) hereof, the term of this Agreement shall automatically commence on the Closing Date (as defined in the Merger Agreement) (but only upon the Closing Date) hereof and shall last for a period of three (3) years (such period being hereinafter referred to as the “Term”).  Notwithstanding the foregoing, IWEST may terminate this Agreement at any time, with or without cause (the Term, as it may be extended or terminated pursuant to this Article II, is herein referred to as the “Engagement Term”).

(b)

The Consultant shall have the option, but not the obligation, to terminate the Engagement Term upon the occurrence of any of the following events:

(i)

Disability of Consultant.  For purposes of this Agreement, the term “disability” (or any similar term) shall mean any bodily injury, disease, illness, or emotional or nervous disorder that prevents the Consultant from performing any or all Consulting Services for a period of at least thirty (30) consecutive days;



2



(ii)

The failure of IWEST to perform its obligations provided herein and the continuance of such failure for a period of thirty (30) consecutive days after receipt by IWEST from the Consultant of written notice of such failure to perform ; or

(iii)

The occurrence of a Change in Control Event (as defined herein).

(c)

This Agreement shall automatically terminate upon the death of Consultant.

2.2

DEFINITION OF “CHANGE IN CONTROL EVENT” .

A “Change in Control Event” means the occurrence of one or more of the following:

(a)

Any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of IWEST to any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended; provided, however, that any sale, lease, exchange or transfer to (including, without limitation, any merger or other business combination with or into) any of the following shall not constitute a Change in Control Event:  (i) any Affiliate controlled by IWEST, (ii) Inland Real Estate Corporation, (iii) Inland American Real Estate Trust, Inc., (iv) The Inland Group, Inc., or (v) any Affiliate controlled by any of the persons listed in clauses (i) through (iv) above (all of the entities described in clauses (i) through (v) above to be hereinafter sometimes referred to as the “Inland Companies”);

(b)

The approval by the holders of the outstanding shares of IWEST of any plan or proposal for the liquidation or dissolution of IWEST;

(c)

Any person or group of related persons (other than any one or more of the Inland Companies) shall become the owner, directly or indirectly, beneficially or of record, of shares of IWEST representing more than twenty-five percent (25%) of the aggregate ordinary voting power represented by the issued and outstanding common shares of IWEST; or

(d)

Following any change in the composition of the board of directors of IWEST, a majority of the board of directors of IWEST are not either (i) members of the board of directors of IWEST as of the date hereof, or (ii) members of the board of directors of IWEST whose nomination for election or election to the board of directors of IWEST has been recommended, approved or ratified by at least eighty percent (80%) of the board of directors of IWEST then in office who were either members of the board of directors of IWEST as of the date hereof or whose election as a member of the board of directors of IWEST was previously so approved.

2.3

CESSATION OF RIGHTS AND OBLIGATIONS: SURVIVAL OF CERTAIN PROVISIONS .  On the date of expiration or termination of the Engagement Term for any reason, all of the respective rights, duties, obligations and covenants of the parties hereto, as set forth herein, shall, except as specifically provided herein to the contrary, cease and become of no further force or effect as of the date of said termination, and shall only survive as expressly provided for herein.

ARTICLE III

3.1

NO COMPENSATION .  During the Engagement Term, IWEST shall not pay to Consultant, and Consultant shall not be entitled to receive, any salary or other compensation for his services provided under this Agreement.



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3.2

REIMBURSEMENT OF EXPENSES .  IWEST shall reimburse Consultant for all ordinary and necessary out-of-pocket business expenses incurred by him and in connection with performing Consulting Services at the request of IWEST or IWEST’s Board hereunder, in the manner and time consistent with IWEST’s policy governing reimbursement of expenses incurred by employees.

ARTICLE IV

4.1

ASSIGNMENT .  This Agreement or any right or interest hereunder may not be assigned by either party without the prior written consent of the other party hereto.  Consultant shall not, without the prior written consent of IWEST, employ, contract with or use the services of any third party in connection with the performance of any of the services to be rendered under this Agreement, or otherwise designate the responsibility of performance of any services to be rendered under this Agreement to any third party.  Any attempted assignment, designation, employment or use in violation of this Section 4.1 shall be void and of no force or effect.

4.2

NON-DISCLOSURE OF CONFIDENTIAL INFORMATION .  Consultant hereby acknowledges and agrees that as a result of his engagement hereunder he may acquire and use information of a special and unique nature and value specifically relating to IWEST that is not generally known to the public such as financial or operating information, business or strategic plans identified as such, property acquisition memorandums or appraisals, entity valuation or models, and employee records (all such information being hereinafter referred to as “Confidential Information”); provided, however, that any information concerning tenants or prospective tenants of, investors or potential investors, or members of any broker-dealer group or potential broker-dealer group to, or of, IWEST shall not constitute “Confidential Information” unless IWEST is subject to a confidentiality agreement concerning such information.  Consultant further acknowledges and agrees that the Confidential Information is of great value to IWEST and that the restrictions and agreements contained in this Agreement are reasonably necessary to protect the Confidential Information and the goodwill of IWEST and its subsidiaries.  Accordingly, Consultant hereby covenants and agrees that:

(a)

During the Engagement Term or at any time thereafter, except to the extent authorized by IWEST or its Affiliates, Consultant will not, directly or indirectly, divulge to any person, firm, corporation, limited liability, company or other organization, other than IWEST or any of its subsidiaries (collectively, “Third Parties”), or use or cause or authorize any Third Parties to use, any Confidential Information (whether or not identified by IWEST as confidential), except to the extent required by law (and then only to the extent required by law and with reasonable prior notice to IWEST and its Board of Directors of such disclosure); and

(b)

Upon the termination of the Engagement Term, Consultant shall deliver or cause to be delivered to IWEST any and all Confidential Information, including drawings, notebooks, keys, data and other documents and materials belonging to IWEST or its subsidiaries which is in his possession or under his control relating to IWEST or its subsidiaries, regardless of the medium upon which it is stored, and will deliver to IWEST upon such termination of the Engagement Term any other property of IWEST or its subsidiaries which is in his possession or under his control; provided, however, that notwithstanding the foregoing, Consultant shall not be required to deliver or cause to be delivered to IWEST any Confidential Information (i) in the possession of Consultant received by Consultant in his capacity as a director of IWEST or (ii) if Consultant is otherwise employed by, or providing other services directly or indirectly through an affiliate of The Inland Group, Inc., to IWEST or its subsidiaries.

Nothing contained in this Section 4.2 shall prohibit or restrict any party from disclosing any information (including Confidential Information):  (a) the disclosure of which is necessary to comply with



4



any applicable laws, including, without limitation, federal or state securities laws, or any exchange listing or similar rules and regulations; (b) the disclosure of which is ordered pursuant to a subpoena or other order from a court or governmental body of competent jurisdiction; (c) which is now, or hereafter is made, generally available to the public other than by disclosure in violation of this Agreement; (d) which was disclosed to the disclosing party by a Third Party that the disclosing party, in good faith, believes was not bound by an obligation of confidentiality; or (e) with respect to which IWEST has consented to the form and content of any such disclosure.  If any party learns that disclosure of such information is sought in or by a court or governmental body of competent jurisdiction or through other means, such party shall (1) give prompt notice to the other party prior to making such disclosure and allow such other party, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information, (2) reasonably cooperate with such other party in its efforts to prevent, or obtain a protective order for, such disclosure, and (3) disclose the minimum amount of information required to be disclosed.

4.3

REMEDIES .  Consultant hereby acknowledges and agrees that the Consulting Services to be rendered by him to IWEST hereunder are of a special and unique nature and that it would be very difficult or impossible to measure the damages resulting from a breach of this Agreement. Consultant hereby further acknowledges and agrees that the restrictions herein are reasonable and necessary for the protection of the business and the goodwill of IWEST and its subsidiaries and that a violation by the Consultant of any such covenant could cause irreparable damage to IWEST or its subsidiaries.  Consultant therefore agrees that any breach by him of any of the covenants or provisions of Article IV of this Agreement shall entitle IWEST or its subsidiaries, in addition to any other remedy available to them under this Agreement, at law or in equity, to a temporary and permanent injunction or any other applicable decree of specific performance, without any bond or security being required thereof, in order to enjoin such breach.  The parties understand and intend that each covenant, provision and restriction agreed to in this Article IV shall be construed as separate and divisible from every other provision and restriction and that the unenforceability of any one provision or restriction shall not limit the enforceability, in whole or in part, of any other provision or restriction and that one or more of all of such provisions or restrictions may be enforced, in whole or in part, as the circumstances warrant.

ARTICLE V
MISCELLANEOUS

5.1

NOTICES .  All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given or delivered: (i) when delivered personally or by commercial messenger; (ii) one business day following deposit with a recognized overnight courier service, provided such deposit occurs prior to the deadline imposed by such service for overnight delivery; (iii) when transmitted, if sent by facsimile copy, provided confirmation of receipt is received by sender and such notice is sent by an additional method provided hereunder, in each case above provided such communication is addressed to the intended recipient thereof as set forth below:

To Consultant at:

G. Joseph Cosenza

2901 Butterfield Road

Oak Brook, Illinois 60523

Facsimile: (630) 218-8033


With a copy to:


Jenner & Block LLP

330 N. Wabash Avenue

Chicago, IL 60611-7603

Attn:  Arnold S. Harrison



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Facsimile: (312) 923-2702



To IWEST at:

Inland Western Retail Real Estate Trust, Inc.

2901 Butterfield Road

Oak Brook, Illinois 60523

Attn:_____________

Facsimile:_____________


With a copy to:


Duane Morris LLP

227 West Monroe Street

Suite 3400

Chicago, Illinois 60606

Attn:  David J. Kaufman

Facsimile: (312) 499-6701


Any party may change its address for purposes of this paragraph by giving the other party written notice of the new address in the manner set forth above.

5.2

ENTIRE AGREEMENT; AMENDMENTS, ETC .  This Agreement contains the entire agreement and understanding of the parties hereto, and supersedes all prior agreements and understandings relating to the subject matter thereof.  No modification, amendment, waiver or alteration of this Agreement or any provision or term hereof shall in any event be effective unless the same shall be in writing, executed by both parties hereto, and any waiver so given shall be effective only in the specific instance and for the specific purpose for which given.

5.3

SUCCESSORS AND ASSIGNS .  Subject to the terms and restrictions contained in Section 4.1 above, this Agreement shall be binding upon, and inure to the benefit of, and shall be enforceable by, the successors, assignees and transferees of IWEST and its current or future subsidiaries.

5.4

NO CONSTRUCTIVE WAIVERS .  No failure or delay on the part of any party hereto in exercising any right, power or remedy hereunder or pursuant hereto shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder or pursuant thereto.

5.5

SEVERABILITY . Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law but, if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.  If any part of any covenant or other provision in this Agreement is determined by a court of law to be overly broad thereby making the covenant unenforceable, the parties hereto agree, and it is their desire, that the court shall substitute a judicially enforceable limitation in its place, and that as so modified the covenant shall be binding upon the parties as if originally set forth herein.

5.6

COMPLIANCE AND HEADINGS . The headings in this Agreement are intended to be for convenience and reference only, and shall not define or limit the scope, extent or intent or otherwise affect the meaning of any portion hereof.



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5.7

GOVERNING LAW . The parties agree that this Agreement shall be governed by, interpreted and construed in accordance with the internal laws of the State of Illinois.

5.8

A RBITRATION .   All disputes under this Agreement among the parties to this Agreement which are not resolved within thirty (30) days of a party’s sending of a notice of dispute with respect thereto (each an “Arbitrated Claim”), shall be resolved by binding arbitration, and each party hereto hereby waives any right it may otherwise have to such a resolution of any Arbitrated Claim by any means other than arbitration pursuant to this Section 5.8 .  As a minimum set of rules in the arbitration, the parties agree as follows:

(a)

The place of the arbitration shall be Chicago, Illinois.  The arbitration must be held in the English language in accordance with the Streamlined Arbitration Rules and Procedures of JAMS in effect on the date hereof, except as modified by this Agreement. The arbitration shall be governed by the Illinois Code of Civil Procedure.

(b)

The arbitration will be held before a single arbitrator selected by (i) IWEST and (ii) the Consultant.  If the parties in interest cannot agree on an arbitrator within fourteen (14) days of the delivery of an Arbitration Demand, JAMS will appoint such arbitrator.  The arbitrator will be knowledgeable regarding commercial transactions similar in nature to the transactions contemplated by this Agreement.

(c)

Any party or parties initiating arbitration (the “Arbitration Claimants”) will give to the other party or parties (the “Arbitration Respondents”) notice of their intention to arbitrate (the “Arbitration Demand”).  The Arbitration Demand will contain a notice regarding the nature of the claim.  The Arbitration Respondents will file an answering statement (the “Arbitration Answer”) within fourteen (14) days after the Arbitration Demand.  The Arbitration Answer will contain a statement setting forth in reasonable detail the Arbitration Respondents’ responses and defenses to the Arbitrated Claim.  If the Arbitration Respondents assert a counterclaim, (i) the Arbitration Respondents shall send it with the Arbitration Answer and such counterclaim must include a statement setting forth in reasonable detail the nature of the counterclaim, the amount involved, if any, and the remedy sought, and (ii) the Arbitration Claimants will file a reply statement (the “Arbitration Reply”) as soon as is reasonably practicable, but in no event later than fourteen (14) days, after the counterclaim. The Arbitration Reply will contain a statement setting forth in reasonable detail the Arbitration Claimants’ responses and defenses to the counterclaim.  If no Arbitration Answer or Arbitration Reply is given within the stated time, the claim or the counterclaim will be assumed to be denied.  Failure to file an Arbitration Answer or Arbitration Reply will not operate to delay the arbitration.

(d)

Unless the parties to the arbitration agree otherwise, the arbitrator may order depositions only for good cause and each party to the Arbitrated Claim may make such document requests and other discovery (other than depositions) as permitted in accordance with the Streamlined Arbitration Rules and Procedures of JAMS in effect on the date hereof.

(e)

The arbitration hearings will be conducted over a period not to exceed thirty (30) days commencing as of the date of the first hearing.  The arbitrator shall make a final decision on the Arbitrated Claim within thirty (30) days of the final hearing. The arbitrator may make such orders with regard to scheduling, allocation of hearing time, or otherwise as he or she deems appropriate to achieve compliance with these time limitations.    The parties have included the foregoing provisions limiting the scope and extent of the arbitration with the intention of providing for prompt, economic and fair resolution of any dispute submitted to arbitration.



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(f)

The Arbitration Claimants, on the one hand, and the Arbitration Respondents, on the other, will, as an initial matter, equally bear the costs and fees of the arbitration, if applicable, but the arbitrator shall award such costs in inverse proportion as the Arbitration Claimants, on the one hand, and the Arbitration Respondents, on the other, may prevail on the matters resolved by the arbitrator (based on the variance of their respective proposed Arbitration Demand, Arbitration Answer and/or Arbitration Reply, as applicable, from the determination of the arbitrator), which proportionate allocations shall be determined by the arbitrator at the time the determination of the arbitrator is rendered on the merits of the matters submitted.

(g)

The arbitrator shall enter a written award specifying the basis for his or her decision, including findings of fact and conclusions of law, the basis for the damages award and a breakdown of the damages awarded, and the basis for any other remedy.  Any Party dissatisfied with the award may invoke the JAMS Optional Arbitration Appeal Procedure (based on the rules therefor in effect at the time of this Agreement).  Such JAMS Optional Arbitration Appeal shall be limited to whether there are any erroneous conclusions of law, or any findings of fact not supported by substantial evidence.  The appellate arbitral panel may vacate, modify, correct, or affirm the award in whole or in any part.  The award (as modified, corrected, or affirmed by the appellate arbitral panel, or if no such JAMS appeal is taken, as originally rendered by the arbitrator) will be considered as a final and binding resolution of the disagreement.  

(h)

 Any arbitration proceeding will be conducted on a confidential basis, and any Confidential Material disclosed during any such proceeding will be kept confidential by the parties to such proceeding and by the arbitrator.

(i)

The arbitrator’s discretion to fashion remedies hereunder will be no broader or narrower than the legal and equitable remedies available to a court before which such Arbitrated Claim may have been brought but for this Section 5.8 , unless the parties expressly state elsewhere in this Agreement that parties will be subject to broader or narrower legal and equitable remedies than would be available under the law governing this Agreement.

(j)

The arbitral award will be the exclusive remedy of the parties for all claims, counterclaims, issues or accountings presented or pleaded to the arbitrator.  The award will include interest from the date of the Arbitrated Claim until the award is fully paid, computed at the then-prevailing U.S. prime rate, plus five percent (5%).  Any additional costs, fees or expenses incurred in enforcing the arbitral award (or successfully resisting it) will be borne by the party against which enforcement is sought if such award is successfully enforced (or borne by the party seeking to enforce such award if the resisting party successfully resists its enforcement).  Any party may enforce an arbitral award in any court of competent jurisdiction.

5.9

COUNTERPARTS . This Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument.

5.10

NO PRESUMPTION AGAINST DRAFTER . Each of the parties hereto has jointly participated in the negotiation and drafting of this Agreement.  In the event an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by each of the parties hereto and no presumptions or burdens of proof shall arise favoring any party by virtue of the authorship of any provisions of this Agreement.

5.11

ENFORCEMENT .  In the event either of the parties to this Agreement shall bring an action against the other party with respect to the enforcement or breach of any provision of this



8



Agreement, the prevailing party in such action shall recover from the non-prevailing party the costs incurred by the prevailing party with respect to such action including court costs and reasonable attorneys’ fees.

5.12

RECITALS .  The Recitals set forth above are hereby incorporated in and made a part of this Agreement by this reference.

5.13

INDEMNIFICATION .  IWEST agrees to defend, indemnify and hold harmless Consultant for any and all acts taken or omitted to be taken by Consultant hereunder (except for bad faith, gross negligence or willful misconduct) as if Consultant was a director of IWEST as provided in IWEST’s charter and bylaws in accordance with the same terms, conditions, limitations, standards, duties, rights and obligations as a director.  If IWEST enters into an indemnification or similar agreement covering such indemnification matters with any IWEST director, IWEST will offer and enter into a similar indemnification agreement with Consultant.  The provisions of this Section 5.13 shall survive any termination of this Agreement.

[Signature page follows.]



9





IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed and delivered as of the day and year first above written.


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a Maryland corporation


By:

Name:

Its:



CONSULTANT



G. Joseph Cosenza




[SIGNATURE PAGE TO CONSULTING AGREEMENT]






1



EXHIBIT 10.560


INDEMNIFICATION AGREEMENT



THIS INDEMNIFICATION AGREEMENT is made and entered into this 1 st day of

January, 2008 ("Agreement"), by and between INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a placeStateMaryland corporation (the "Company"), and Richard P. Imperiale ("Indemnitee").


WHEREAS, at the request of the Company, Indemnitee currently serves as a director of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of his service; and


WHEREAS, as an inducement to Indemnitee to continue to serve as such director, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings, to the maximum extent permitted by law; and

WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses;


NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:


SnplaceSnSection SnI.

Definitions. For purposes of this Agreement:


(a)

"Change in Control" means a change in control of the Company occurring after
the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the "Act"), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if after the Effective Date (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of the Company's then outstanding securities without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person attaining such percentage interest; (ii) there occurs a proxy contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) during any period of two consecutive years, other than as a result of an event described in clause (a)(ii) of this Section 1, individuals who at the beginning of such period constituted the Board of Directors (including for this purpose any new director whose election or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board of Directors.





(b)

"Corporate Status" means the status of a person who is or was a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise for which such person is or was serving at the request of the Company.


(c)

"Disinterested Director" means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.


(d)

"Effective Date" means the date set forth in the first paragraph of this Agreement.


(e)

"Expenses" shall include all reasonable and out-of-pocket attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.


(f)

"Independent Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to or witness in the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. If a Change of Control has not occurred, Independent Counsel shall be selected by the Board of Directors, with the approval of Indemnitee, which approval will not be unreasonably withheld. If a Change of Control has occurred, Independent Counsel shall be selected by Indemnitee, with the approval of the Board of Directors, which approval will not be unreasonably withheld.


(g)

"Proceeding" includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative (including on appeal), except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee.


Section 2.

Services by Indemnitee. Indemnitee will serve as a director of the Company. However, this Agreement shall not impose any obligation on Indemnitee or the Company to continue Indemnitee's service to the Company beyond any period otherwise required by law or by other agreements or commitments of the parties, if any.


Section 3.

Indemnification - General. The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the maximum extent permitted by Maryland law in effect on the date hereof and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the date hereof. The rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set

forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law ("MGCL").


Section 4.

Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed Proceeding, other than a Proceeding by or in the right of the Company. Pursuant to this Section 4, Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding by reason of his Corporate Status unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty, (ii) Indemnitee actually received an improper personal benefit in money, property or services, or (iii) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his conduct was unlawful.


Section 5.

Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 5 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 5, Indemnitee shall be indemnified against all amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to such a Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (ii) Indemnitee actually received an improper personal benefit in money, property or services.


Section 6.

Court-Ordered Indemnification. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification in the following circumstances:


(a)

if it determines Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the expenses of securing such reimbursement; or


(b)

if it determines that Indemnitee is fairly and reasonably entitled to

indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding.



Section 7.      Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, and without limiting any

such provision, to the extent that Indemnitee is, by reason of his Corporate Status, made a party to and is successful, on the merits or otherwise, in the defense of any Proceeding, he shall be indemnified for all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.


Section 8.

Advance of Expenses. The Company shall advance all reasonable Expenses actually and reasonably incurred by or on behalf of Indemnitee in connection with any Proceeding (other than a Proceeding brought to enforce indemnification under this Agreement, applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors) to which Indemnitee is, or is threatened to be, made a party or a witness, within ten days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established that the standard of conduct has not been met and which have not been successfully resolved as described in Section 7. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee's financial ability to repay such advanced Expenses and without any requirement to post security therefor.


Section 9.

Procedure for Determination of Entitlement to Indemnification.


(a)

To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.



(b)

Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 9(a) hereof, a determination, if required by applicable law, with respect to Indemnitee's entitlement thereto shall promptly be made in the specific case: (i) if a Change in  

Control shall have occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred, (A) by the Board of Directors (or a duly authorized committee thereof) by a majority vote of a quorum consisting of Disinterested Directors (as herein defined), or (B) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 9. Any Expenses actually and reasonably incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.


Section 10.

Presumptions and Effect of Certain Proceedings.


(a)

In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.


(b)

The termination of any Proceeding by judgment, order, settlement, conviction, a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.


Section 11.

Remedies of Indemnitee.


(a)

If (i) a determination is made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 9(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 7 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 11(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his rights under Section 7 of this Agreement.

(b)

In any judicial proceeding or arbitration commenced pursuant to this Section 11 the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be.

(c)

If a determination shall have been made pursuant to Section 9(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification.

(d)

In the event that Indemnitee, pursuant to this Section 11, seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.

Section 12.

Defense of the Underlying Proceeding.

(a)

Indemnitee shall notify the Company promptly upon being served with or receiving any summons, citation, subpoena, complaint, indictment, information, notice, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder; provided, however, that the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company's ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

(b)

Subject to the provisions of the last sentence of this Section 12(b) and of Section 12(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 12(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which  (i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee. This Section 12(b) shall not apply to a Proceeding brought by Indemnitee under Section 11 above or Section 18 below.

(c)

Notwithstanding the provisions of Section 12(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee's Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that he may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company (subject to Section 11(d)), to represent Indemnitee in connection with any such matter.

Section 13.

Non-Exclusivity; Survival of Rights; Subrogation; Insurance.


(a)

The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.

(b)

In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(c)

The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.



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Section 14.

Insurance. The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors of the Company, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee for service as a director or officer of the Company and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee for service as a director or officer of the Company. Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and reasonable Expenses actually and reasonably incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence.


Section 15.

Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is or may be, by reason of his Corporate Status, a witness in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party but in which the Indemnitee receives a subpoena to testify, he shall be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.


Section 16.

Duration of Agreement; Binding Effect.


(a)

This Agreement shall continue until and terminate ten years after the date that Indemnitee's Corporate Status shall have ceased; provided, that the rights of Indemnitee hereunder shall continue until the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advance of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto.

(b)

The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the written request of the Company, and shall inure to the benefit of Indemnitee and his spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.


(c)

The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.





Section 17.

Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.


Section 18.

Exception to Right of Indemnification or Advance of Expenses. Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, unless (a) the Proceeding is brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Sections 8 and 11 of this Agreement, or (b) the Company's Bylaws, as amended, the Charter, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.


Section 19.

Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.


Section 20.

Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.


Section 21.

Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.


Section 22.

Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:


(a)

If to Indemnitee, to: The address set forth on the signature page hereto.



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(b)

If to the Company to:

Inland Western Retail Real Estate Trust, Inc.

Streetaddress2901 Butterfield Road

CityplaceCityOak Brook, StateIllinois  PostalCode60523

Attn:  Chief Operating Officer and Chief Financial Officer


With a copy to:

Inland Western Retail Real Estate Trust, Inc.

Streetaddress2901 Butterfield Road

CityplaceCityOak Brook, StateIllinois  PostalCode60523

Attn:  General Counsel


or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.


Section 23.

Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of placeStateMaryland, without regard to its conflicts of laws rules.

Section 24.

Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.


ATTEST:

COMPANY


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.


By:

(SEAL) Name:  Steven P. Grimes

Title:  

Chief Operating Officer and Chief Financial

Officer



WITNESS:

INDEMNITEE

Name:  

Richard P. Imperiale

Address:  Uniplan Advisors, Inc.-Investments

Streetaddress22929 West Overson Road

CityUnion Grove, PostalCodePostalCodeWI 53182





EXHIBIT A


FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED The Board of Directors of Inland Western Retail Real Estate Trust, Inc.


Re: Undertaking to Repay Expenses Advanced


Ladies and Gentlemen:


This undertaking is being provided pursuant to that certain Indemnification Agreement dated the

day of

, 200   , by and between Inland Western Retail Real Estate Trust, Inc. (the "Company") and the undersigned Indemnitee (the "Indemnification Agreement"), pursuant to which I am entitled to advance of expenses in connection with [Description of Proceeding] (the "Proceeding").


Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.


I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm that at all times, insofar as I was involved as an officer of the Company, in any of the facts or events giving rise to the Proceeding, I (1) acted in good faith and honestly, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.


In consideration of the advance of Expenses by the Company for reasonable attorneys' fees and related expenses incurred by me in connection with the Proceeding (the "Advanced Expenses"), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established and which have not been successfully resolved as described in Section 7 of the Indemnification Agreement. To the extent that Advanced Expenses do not relate to a specific claim, issue or matter in the Proceeding, I agree that such Expenses shall be allocated on a reasonable and proportionate basis.


IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this

day of

, 200__ .

WITNESS:



Endnotes

(SEAL)



10






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EXHIBIT 10.561


INDEMNIFICATION AGREEMENT



THIS INDEMNIFICATION AGREEMENT is made and entered into this 1 st day of

January, 2008 ("Agreement"), by and between INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a StateplaceMaryland corporation (the "Company"), and Kenneth E. Masick ("Indemnitee").


WHEREAS, at the request of the Company, Indemnitee currently serves as a director of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of his service; and


WHEREAS, as an inducement to Indemnitee to continue to serve as such director, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings, to the maximum extent permitted by law; and

WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses;


NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:


SnplaceSection SnI.

Definitions. For purposes of this Agreement:


(a)

"Change in Control" means a change in control of the Company occurring after
the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the "Act"), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if after the Effective Date (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of the Company's then outstanding securities without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person attaining such percentage interest; (ii) there occurs a proxy contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) during any period of two consecutive years, other than as a result of an event described in clause (a)(ii) of this Section 1, individuals who at the beginning of such period constituted the Board of Directors (including for this purpose any new director whose election or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board of Directors.





(b)

"Corporate Status" means the status of a person who is or was a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise for which such person is or was serving at the request of the Company.


(c)

"Disinterested Director" means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.


(d)

"Effective Date" means the date set forth in the first paragraph of this Agreement.


(e)

"Expenses" shall include all reasonable and out-of-pocket attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.


(f)

"Independent Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to or witness in the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. If a Change of Control has not occurred, Independent Counsel shall be selected by the Board of Directors, with the approval of Indemnitee, which approval will not be unreasonably withheld. If a Change of Control has occurred, Independent Counsel shall be selected by Indemnitee, with the approval of the Board of Directors, which approval will not be unreasonably withheld.


(g)

"Proceeding" includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative (including on appeal), except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee.


Section 2.

Services by Indemnitee. Indemnitee will serve as a director of the Company. However, this Agreement shall not impose any obligation on Indemnitee or the Company to continue Indemnitee's service to the Company beyond any period otherwise required by law or by other agreements or commitments of the parties, if any.


Section 3.

Indemnification - General. The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the maximum extent permitted by Maryland law in effect on the date hereof and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the date hereof. The rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set

forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law ("MGCL").


Section 4.

Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed Proceeding, other than a Proceeding by or in the right of the Company. Pursuant to this Section 4, Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding by reason of his Corporate Status unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty, (ii) Indemnitee actually received an improper personal benefit in money, property or services, or (iii) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his conduct was unlawful.


Section 5.

Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 5 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 5, Indemnitee shall be indemnified against all amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to such a Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (ii) Indemnitee actually received an improper personal benefit in money, property or services.


Section 6.

Court-Ordered Indemnification. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification in the following circumstances:


(a)

if it determines Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the expenses of securing such reimbursement; or


(b)

if it determines that Indemnitee is fairly and reasonably entitled to

indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding.



Section 7.      Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, and without limiting any

such provision, to the extent that Indemnitee is, by reason of his Corporate Status, made a party to and is successful, on the merits or otherwise, in the defense of any Proceeding, he shall be indemnified for all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.


Section 8.

Advance of Expenses. The Company shall advance all reasonable Expenses actually and reasonably incurred by or on behalf of Indemnitee in connection with any Proceeding (other than a Proceeding brought to enforce indemnification under this Agreement, applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors) to which Indemnitee is, or is threatened to be, made a party or a witness, within ten days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established that the standard of conduct has not been met and which have not been successfully resolved as described in Section 7. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee's financial ability to repay such advanced Expenses and without any requirement to post security therefor.


Section 9.

Procedure for Determination of Entitlement to Indemnification.


(a)

To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.



(b)

Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 9(a) hereof, a determination, if required by applicable law, with respect to Indemnitee's entitlement thereto shall promptly be made in the specific case: (i) if a Change in  

Control shall have occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred, (A) by the Board of Directors (or a duly authorized committee thereof) by a majority vote of a quorum consisting of Disinterested Directors (as herein defined), or (B) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 9. Any Expenses actually and reasonably incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.


Section 10.

Presumptions and Effect of Certain Proceedings.


(a)

In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.


(b)

The termination of any Proceeding by judgment, order, settlement, conviction, a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.


Section 11.

Remedies of Indemnitee.


(a)

If (i) a determination is made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 9(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 7 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 11(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his rights under Section 7 of this Agreement.

(b)

In any judicial proceeding or arbitration commenced pursuant to this Section 11 the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be.

(c)

If a determination shall have been made pursuant to Section 9(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification.

(d)

In the event that Indemnitee, pursuant to this Section 11, seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.

Section 12.

Defense of the Underlying Proceeding.

(a)

Indemnitee shall notify the Company promptly upon being served with or receiving any summons, citation, subpoena, complaint, indictment, information, notice, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder; provided, however, that the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company's ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

(b)

Subject to the provisions of the last sentence of this Section 12(b) and of Section 12(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 12(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which  (i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee. This Section 12(b) shall not apply to a Proceeding brought by Indemnitee under Section 11 above or Section 18 below.

(c)

Notwithstanding the provisions of Section 12(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee's Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that he may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company (subject to Section 11(d)), to represent Indemnitee in connection with any such matter.

Section 13.

Non-Exclusivity; Survival of Rights; Subrogation; Insurance.


(a)

The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.

(b)

In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(c)

The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.



1




Section 14.

Insurance. The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors of the Company, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee for service as a director or officer of the Company and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee for service as a director or officer of the Company. Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and reasonable Expenses actually and reasonably incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence.


Section 15.

Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is or may be, by reason of his Corporate Status, a witness in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party but in which the Indemnitee receives a subpoena to testify, he shall be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.


Section 16.

Duration of Agreement; Binding Effect.


(a)

This Agreement shall continue until and terminate ten years after the date that Indemnitee's Corporate Status shall have ceased; provided, that the rights of Indemnitee hereunder shall continue until the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advance of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto.

(b)

The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the written request of the Company, and shall inure to the benefit of Indemnitee and his spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.


(c)

The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.





Section 17.

Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.


Section 18.

Exception to Right of Indemnification or Advance of Expenses. Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, unless (a) the Proceeding is brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Sections 8 and 11 of this Agreement, or (b) the Company's Bylaws, as amended, the Charter, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.


Section 19.

Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.


Section 20.

Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.


Section 21.

Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.


Section 22.

Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:


(a)

If to Indemnitee, to: The address set forth on the signature page hereto.



1




(b)

If to the Company to:

Inland Western Retail Real Estate Trust, Inc.

Streetaddress2901 Butterfield Road

CityplaceOak Brook, StateIllinois  PostalCode60523

Attn:  Chief Operating Officer and Chief Financial Officer


With a copy to:

Inland Western Retail Real Estate Trust, Inc.

Streetaddress2901 Butterfield Road

CityplaceOak Brook, StateIllinois  PostalCode60523

Attn:  General Counsel


or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.


Section 23.

Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of StateplaceMaryland, without regard to its conflicts of laws rules.

Section 24.

Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

[SIGNATURE PAGE FOLLOWS]





IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.


ATTEST:

COMPANY


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.


By:

(SEAL) Name:  Steven P. Grimes

Title:  

Chief Operating Officer and Chief Financial

Officer



WITNESS:

INDEMNITEE

Name:  

Kenneth E. Masick

Address:  Wolf & Company

Streetaddress2100 Clearwater Drive

CityplaceOak Brook, PostalCodeIllinois PostalCode60523



11


EXHIBIT A


FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED The Board of Directors of Inland Western Retail Real Estate Trust, Inc.


Re: Undertaking to Repay Expenses Advanced


Ladies and Gentlemen:


This undertaking is being provided pursuant to that certain Indemnification Agreement dated the

day of

, 200   , by and between Inland Western Retail Real Estate Trust, Inc. (the "Company") and the undersigned Indemnitee (the "Indemnification Agreement"), pursuant to which I am entitled to advance of expenses in connection with [Description of Proceeding] (the "Proceeding").


Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.


I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm that at all times, insofar as I was involved as an officer of the Company, in any of the facts or events giving rise to the Proceeding, I (1) acted in good faith and honestly, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.


In consideration of the advance of Expenses by the Company for reasonable attorneys' fees and related expenses incurred by me in connection with the Proceeding (the "Advanced Expenses"), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established and which have not been successfully resolved as described in Section 7 of the Indemnification Agreement. To the extent that Advanced Expenses do not relate to a specific claim, issue or matter in the Proceeding, I agree that such Expenses shall be allocated on a reasonable and proportionate basis.


IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this

day of

, 200__ .

WITNESS:


Endnotes

(SEAL)









1




EXHIBIT 10.567


INDEMNIFICATION AGREEMENT



THIS INDEMNIFICATION AGREEMENT is made and entered into this 15 th day of

November, 2007 ("Agreement"), by and between INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a StateplaceMaryland corporation (the "Company"), and Ann M. Sharp ("Indemnitee").


WHEREAS, at the request of the Company, Indemnitee currently serves as an officer of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of his service; and


WHEREAS, as an inducement to Indemnitee to continue to serve as such officer, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings, to the maximum extent permitted by law; and

WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses;


NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:


SnplaceSection PostalCodeI.

Definitions. For purposes of this Agreement:


(a)

"Change in Control" means a change in control of the Company occurring after
the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the "Act"), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if after the Effective Date (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of the Company's then outstanding securities without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person attaining such percentage interest; (ii) there occurs a proxy contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) during any period of two consecutive years, other than as a result of an event described in clause (a)(ii) of this Section 1, individuals who at the beginning of such period constituted the Board of Directors (including for this purpose any new director whose election or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board of Directors.





(b)

"Corporate Status" means the status of a person who is or was a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise for which such person is or was serving at the request of the Company.


(c)

"Disinterested Director" means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.


(d)

"Effective Date" means the date set forth in the first paragraph of this Agreement.


(e)

"Expenses" shall include all reasonable and out-of-pocket attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.


(f)

"Independent Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to or witness in the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. If a Change of Control has not occurred, Independent Counsel shall be selected by the Board of Directors, with the approval of Indemnitee, which approval will not be unreasonably withheld. If a Change of Control has occurred, Independent Counsel shall be selected by Indemnitee, with the approval of the Board of Directors, which approval will not be unreasonably withheld.


(g)

"Proceeding" includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative (including on appeal), except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee.


Section 2.

Services by Indemnitee. Indemnitee will serve as an officer of the Company. However, this Agreement shall not impose any obligation on Indemnitee or the Company to continue Indemnitee's service to the Company beyond any period otherwise required by law or by other agreements or commitments of the parties, if any.


Section 3.

Indemnification - General. The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the maximum extent permitted by Maryland law in effect on the date hereof and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the date hereof. The rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set

forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law ("MGCL").


Section 4.

Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed Proceeding, other than a Proceeding by or in the right of the Company. Pursuant to this Section 4, Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding by reason of his Corporate Status unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty, (ii) Indemnitee actually received an improper personal benefit in money, property or services, or (iii) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his conduct was unlawful.


Section 5.

Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 5 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 5, Indemnitee shall be indemnified against all amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to such a Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (ii) Indemnitee actually received an improper personal benefit in money, property or services.


Section 6.

Court-Ordered Indemnification. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification in the following circumstances:


(a)

if it determines Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the expenses of securing such reimbursement; or


(b)

if it determines that Indemnitee is fairly and reasonably entitled to

indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding.


Section 7.

Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, and without limiting any

such provision, to the extent that Indemnitee is, by reason of his Corporate Status, made a party to and is successful, on the merits or otherwise, in the defense of any Proceeding, he shall be indemnified for all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.


Section 8.

Advance of Expenses. The Company shall advance all reasonable Expenses actually and reasonably incurred by or on behalf of Indemnitee in connection with any Proceeding (other than a Proceeding brought to enforce indemnification under this Agreement, applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors)

to which Indemnitee is, or is threatened to be, made a party or a witness, within ten days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established that the standard of conduct has not been met and which have not been successfully resolved as described in Section 7. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee's financial ability to repay such advanced Expenses and without any requirement to post security therefor.


Section 9.

Procedure for Determination of Entitlement to Indemnification.


(a)

To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.


(b)

Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 9(a) hereof, a determination, if required by applicable law, with respect to Indemnitee's entitlement thereto shall promptly be made in the specific case: (i) if a Change in

Control shall have occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred, (A) by the Board of Directors (or a duly authorized committee thereof) by a majority vote of a quorum consisting of Disinterested Directors (as herein defined), or (B) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 9. Any Expenses actually and reasonably incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.


Section 10.

Presumptions and Effect of Certain Proceedings.


(a)

In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.


(b)

The termination of any Proceeding by judgment, order, settlement, conviction, a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.


Section 11.

Remedies of Indemnitee.


(a)

If (i) a determination is made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 9(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 7 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 11(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his rights under Section 7 of this Agreement.

(b)

In any judicial proceeding or arbitration commenced pursuant to this Section 11 the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be.

(c)

If a determination shall have been made pursuant to Section 9(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification.

(d)

In the event that Indemnitee, pursuant to this Section 11, seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.

Section 12.

Defense of the Underlying Proceeding.

(a)

Indemnitee shall notify the Company promptly upon being served with or receiving any summons, citation, subpoena, complaint, indictment, information, notice, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder; provided, however, that the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company's ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

(b)

Subject to the provisions of the last sentence of this Section 12(b) and of Section 12(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 12(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which

(i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee. This Section 12(b) shall not apply to a Proceeding brought by Indemnitee under Section 11 above or Section 18 below.

(c)

Notwithstanding the provisions of Section 12(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee's Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that he may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company (subject to Section 11(d)), to represent Indemnitee in connection with any such matter.

Section 13.

Non-Exclusivity; Survival of Rights; Subrogation; Insurance.


(a)

The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.

(b)

In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(c)

The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.


Section 14.

Insurance. The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors of the Company, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee for service as a director or officer of the Company and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee for service as a director or officer of the Company. Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and reasonable Expenses actually and reasonably incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence.


Section 15.

Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is or may be, by reason of his Corporate Status, a witness in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party but in which the Indemnitee receives a subpoena to testify, he shall be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.


Section 16.

Duration of Agreement; Binding Effect.


(a)

This Agreement shall continue until and terminate ten years after the date that Indemnitee's Corporate Status shall have ceased; provided, that the rights of Indemnitee hereunder shall continue until the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advance of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto.

(b)

The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the written request of the Company, and shall inure to the benefit of Indemnitee and his spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.


(c)

The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.



1



Section 17.

Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.


Section 18.

Exception to Right of Indemnification or Advance of Expenses. Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, unless (a) the Proceeding is brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Sections 8 and 11 of this Agreement, or (b) the Company's Bylaws, as amended, the Charter, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.


Section 19.

Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.


Section 20.

Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.


Section 21.

Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.


Section 22.

Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:


(a)

If to Indemnitee, to: The address set forth on the signature page hereto.

(b)

If to the Company to:

Inland Western Retail Real Estate Trust, Inc.

PostalCodePostalCode2901 Butterfield Road

PostalCodePostalCodeOak Brook, PostalCodeIllinois  PostalCode60523

Attn:  Chief Operating Officer and Chief Financial Officer


With a copy to:

Inland Western Retail Real Estate Trust, Inc.

PostalCodePostalCode2901 Butterfield Road

PostalCodePostalCodeOak Brook, PostalCodeIllinois  PostalCode60523

Attn:  General Counsel


or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.


Section 23.

Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of PostalCodePostalCodeMaryland, without regard to its conflicts of laws rules.

Section 24.

Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

[SIGNATURE PAGE FOLLOWS]





IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.


ATTEST:

COMPANY


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.


By:

(SEAL) Name:  Steven P. Grimes

Title:  

Chief Operating Officer and Chief Financial

Officer



WITNESS:

INDEMNITEE

Name:  

Ann M. Sharp

Address:  Inland Western Retail Real

Estate Trust, Inc.

PostalCodePostalCode2907 Butterfield Road

PostalCodePostalCodeOak Brook, PostalCodeIL PostalCode60523



1



EXHIBIT A


FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED The Board of Directors of Inland Western Retail Real Estate Trust, Inc.


Re: Undertaking to Repay Expenses Advanced


Ladies and Gentlemen:


This undertaking is being provided pursuant to that certain Indemnification Agreement dated the

day of

, 200   , by and between Inland Western Retail Real Estate Trust, Inc. (the "Company") and the undersigned Indemnitee (the "Indemnification Agreement"), pursuant to which I am entitled to advance of expenses in connection with [Description of Proceeding] (the "Proceeding").


Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.


I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm that at all times, insofar as I was involved as an officer of the Company, in any of the facts or events giving rise to the Proceeding, I (1) acted in good faith and honestly, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.


In consideration of the advance of Expenses by the Company for reasonable attorneys' fees and related expenses incurred by me in connection with the Proceeding (the "Advanced Expenses"), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established and which have not been successfully resolved as described in Section 7 of the Indemnification Agreement. To the extent that Advanced Expenses do not relate to a specific claim, issue or matter in the Proceeding, I agree that such Expenses shall be allocated on a reasonable and proportionate basis.


IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this

day of

, 200__ .

WITNESS:


Endnotes

(SEAL)









11




EXHIBIT 10.562


INDEMNIFICATION AGREEMENT



THIS INDEMNIFICATION AGREEMENT is made and entered into this 15 th day of

November, 2007 ("Agreement"), by and between INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a StateplaceMaryland corporation (the "Company"), and Joseph A. Fleming ("Indemnitee").


WHEREAS, at the request of the Company, Indemnitee currently serves as an officer of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of his service; and


WHEREAS, as an inducement to Indemnitee to continue to serve as such officer, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings, to the maximum extent permitted by law; and

WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses;


NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:


SnplaceSection SnI.

Definitions. For purposes of this Agreement:


(a)

"Change in Control" means a change in control of the Company occurring after
the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the "Act"), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if after the Effective Date (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of the Company's then outstanding securities without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person attaining such percentage interest; (ii) there occurs a proxy contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) during any period of two consecutive years, other than as a result of an event described in clause (a)(ii) of this Section 1, individuals who at the beginning of such period constituted the Board of Directors (including for this purpose any new director whose election or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board of Directors.





(b)

"Corporate Status" means the status of a person who is or was a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise for which such person is or was serving at the request of the Company.


(c)

"Disinterested Director" means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.


(d)

"Effective Date" means the date set forth in the first paragraph of this Agreement.


(e)

"Expenses" shall include all reasonable and out-of-pocket attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.


(f)

"Independent Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to or witness in the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. If a Change of Control has not occurred, Independent Counsel shall be selected by the Board of Directors, with the approval of Indemnitee, which approval will not be unreasonably withheld. If a Change of Control has occurred, Independent Counsel shall be selected by Indemnitee, with the approval of the Board of Directors, which approval will not be unreasonably withheld.


(g)

"Proceeding" includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative (including on appeal), except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee.


Section 2.

Services by Indemnitee. Indemnitee will serve as an officer of the Company. However, this Agreement shall not impose any obligation on Indemnitee or the Company to continue Indemnitee's service to the Company beyond any period otherwise required by law or by other agreements or commitments of the parties, if any.


Section 3.

Indemnification - General. The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the maximum extent permitted by Maryland law in effect on the date hereof and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the date hereof. The rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set

forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law ("MGCL").


Section 4.

Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed Proceeding, other than a Proceeding by or in the right of the Company. Pursuant to this Section 4, Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding by reason of his Corporate Status unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty, (ii) Indemnitee actually received an improper personal benefit in money, property or services, or (iii) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his conduct was unlawful.


Section 5.

Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 5 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 5, Indemnitee shall be indemnified against all amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to such a Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (ii) Indemnitee actually received an improper personal benefit in money, property or services.


Section 6.

Court-Ordered Indemnification. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification in the following circumstances:


(a)

if it determines Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the expenses of securing such reimbursement; or


(b)

if it determines that Indemnitee is fairly and reasonably entitled to

indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding.


Section 7.

Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, and without limiting any

such provision, to the extent that Indemnitee is, by reason of his Corporate Status, made a party to and is successful, on the merits or otherwise, in the defense of any Proceeding, he shall be indemnified for all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.


Section 8.

Advance of Expenses. The Company shall advance all reasonable Expenses actually and reasonably incurred by or on behalf of Indemnitee in connection with any Proceeding (other than a Proceeding brought to enforce indemnification under this Agreement, applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors)

to which Indemnitee is, or is threatened to be, made a party or a witness, within ten days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established that the standard of conduct has not been met and which have not been successfully resolved as described in Section 7. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee's financial ability to repay such advanced Expenses and without any requirement to post security therefor.


Section 9.

Procedure for Determination of Entitlement to Indemnification.


(a)

To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.


(b)

Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 9(a) hereof, a determination, if required by applicable law, with respect to Indemnitee's entitlement thereto shall promptly be made in the specific case: (i) if a Change in

Control shall have occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred, (A) by the Board of Directors (or a duly authorized committee thereof) by a majority vote of a quorum consisting of Disinterested Directors (as herein defined), or (B) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 9. Any Expenses actually and reasonably incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.


Section 10.

Presumptions and Effect of Certain Proceedings.


(a)

In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.


(b)

The termination of any Proceeding by judgment, order, settlement, conviction, a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.


Section 11.

Remedies of Indemnitee.


(a)

If (i) a determination is made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 9(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 7 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 11(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his rights under Section 7 of this Agreement.

(b)

In any judicial proceeding or arbitration commenced pursuant to this Section 11 the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be.

(c)

If a determination shall have been made pursuant to Section 9(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification.

(d)

In the event that Indemnitee, pursuant to this Section 11, seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.

Section 12.

Defense of the Underlying Proceeding.

(a)

Indemnitee shall notify the Company promptly upon being served with or receiving any summons, citation, subpoena, complaint, indictment, information, notice, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder; provided, however, that the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company's ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

(b)

Subject to the provisions of the last sentence of this Section 12(b) and of Section 12(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 12(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee. This Section 12(b) shall not apply to a Proceeding brought by Indemnitee under Section 11 above or Section 18 below.

(c)

Notwithstanding the provisions of Section 12(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee's Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that he may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company (subject to Section 11(d)), to represent Indemnitee in connection with any such matter.

Section 13.

Non-Exclusivity; Survival of Rights; Subrogation; Insurance.


(a)

The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.

(b)

In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(c)

The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.



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Section 14.

Insurance. The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors of the Company, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee for service as a director or officer of the Company and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee for service as a director or officer of the Company. Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and reasonable Expenses actually and reasonably incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence.


Section 15.

Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is or may be, by reason of his Corporate Status, a witness in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party but in which the Indemnitee receives a subpoena to testify, he shall be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.


Section 16.

Duration of Agreement; Binding Effect.


(a)

This Agreement shall continue until and terminate ten years after the date that Indemnitee's Corporate Status shall have ceased; provided, that the rights of Indemnitee hereunder shall continue until the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advance of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto.

(b)

The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the written request of the Company, and shall inure to the benefit of Indemnitee and his spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.


(c)

The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.





Section 17.

Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.


Section 18.

Exception to Right of Indemnification or Advance of Expenses. Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, unless (a) the Proceeding is brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Sections 8 and 11 of this Agreement, or (b) the Company's Bylaws, as amended, the Charter, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.


Section 19.

Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.


Section 20.

Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.


Section 21.

Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.


Section 22.

Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:


(a)

If to Indemnitee, to: The address set forth on the signature page hereto.



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(b)

If to the Company to:

Inland Western Retail Real Estate Trust, Inc.

Streetaddress2901 Butterfield Road

CityplaceOak Brook, StateIllinois  PostalCode60523

Attn:  Chief Operating Officer and Chief Financial Officer


With a copy to:

Inland Western Retail Real Estate Trust, Inc.

Streetaddress2901 Butterfield Road

CityplaceOak Brook, StateIllinois  PostalCode60523

Attn:  General Counsel


or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.


Section 23.

Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of StateplaceMaryland, without regard to its conflicts of laws rules.

Section 24.

Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

[SIGNATURE PAGE FOLLOWS]





IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.


ATTEST:

COMPANY


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.


By:

(SEAL) Name:  Steven P. Grimes

Title:  

Chief Operating Officer and Chief Financial

Officer



WITNESS:

INDEMNITEE

Name:  

Joseph A. Fleming

Address:  

Inland Western Retail Real

Estate Trust, Inc.

Streetaddress2901 Butterfield Road

CityplaceOak Brook, PostalCodeIL PostalCode60523



11




EXHIBIT A


FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED The Board of Directors of Inland Western Retail Real Estate Trust, Inc.


Re: Undertaking to Repay Expenses Advanced


Ladies and Gentlemen:


This undertaking is being provided pursuant to that certain Indemnification Agreement dated the

day of

, 200   , by and between Inland Western Retail Real Estate Trust, Inc. (the "Company") and the undersigned Indemnitee (the "Indemnification Agreement"), pursuant to which I am entitled to advance of expenses in connection with [Description of Proceeding] (the "Proceeding").


Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.


I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm that at all times, insofar as I was involved as an officer of the Company, in any of the facts or events giving rise to the Proceeding, I (1) acted in good faith and honestly, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.


In consideration of the advance of Expenses by the Company for reasonable attorneys' fees and related expenses incurred by me in connection with the Proceeding (the "Advanced Expenses"), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established and which have not been successfully resolved as described in Section 7 of the Indemnification Agreement. To the extent that Advanced Expenses do not relate to a specific claim, issue or matter in the Proceeding, I agree that such Expenses shall be allocated on a reasonable and proportionate basis.


IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this

day of

, 200__ .

WITNESS:


Endnotes

(SEAL)









11




EXHIBIT 10.563


INDEMNIFICATION AGREEMENT



THIS INDEMNIFICATION AGREEMENT is made and entered into this 15 th day of

November, 2007 ("Agreement"), by and between INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a StateplaceMaryland corporation (the "Company"), and Dione K. McConnell ("Indemnitee").


WHEREAS, at the request of the Company, Indemnitee currently serves as an officer of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of his service; and


WHEREAS, as an inducement to Indemnitee to continue to serve as such officer, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings, to the maximum extent permitted by law; and

WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses;


NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:


SnplaceSection SnI.

Definitions. For purposes of this Agreement:


(a)

"Change in Control" means a change in control of the Company occurring after
the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the "Act"), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if after the Effective Date (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of the Company's then outstanding securities without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person attaining such percentage interest; (ii) there occurs a proxy contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) during any period of two consecutive years, other than as a result of an event described in clause (a)(ii) of this Section 1, individuals who at the beginning of such period constituted the Board of Directors (including for this purpose any new director whose election or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board of Directors.





(b)

"Corporate Status" means the status of a person who is or was a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise for which such person is or was serving at the request of the Company.


(c)

"Disinterested Director" means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.


(d)

"Effective Date" means the date set forth in the first paragraph of this Agreement.


(e)

"Expenses" shall include all reasonable and out-of-pocket attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.


(f)

"Independent Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to or witness in the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. If a Change of Control has not occurred, Independent Counsel shall be selected by the Board of Directors, with the approval of Indemnitee, which approval will not be unreasonably withheld. If a Change of Control has occurred, Independent Counsel shall be selected by Indemnitee, with the approval of the Board of Directors, which approval will not be unreasonably withheld.


(g)

"Proceeding" includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative (including on appeal), except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee.


Section 2.

Services by Indemnitee. Indemnitee will serve as an officer of the Company. However, this Agreement shall not impose any obligation on Indemnitee or the Company to continue Indemnitee's service to the Company beyond any period otherwise required by law or by other agreements or commitments of the parties, if any.


Section 3.

Indemnification - General. The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the maximum extent permitted by Maryland law in effect on the date hereof and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the date hereof. The rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set

forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law ("MGCL").


Section 4.

Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed Proceeding, other than a Proceeding by or in the right of the Company. Pursuant to this Section 4, Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding by reason of his Corporate Status unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty, (ii) Indemnitee actually received an improper personal benefit in money, property or services, or (iii) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his conduct was unlawful.


Section 5.

Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 5 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 5, Indemnitee shall be indemnified against all amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to such a Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (ii) Indemnitee actually received an improper personal benefit in money, property or services.


Section 6.

Court-Ordered Indemnification. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification in the following circumstances:


(a)

if it determines Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the expenses of securing such reimbursement; or


(b)

if it determines that Indemnitee is fairly and reasonably entitled to

indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding.


Section 7.

Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, and without limiting any

such provision, to the extent that Indemnitee is, by reason of his Corporate Status, made a party to and is successful, on the merits or otherwise, in the defense of any Proceeding, he shall be indemnified for all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.


Section 8.

Advance of Expenses. The Company shall advance all reasonable Expenses actually and reasonably incurred by or on behalf of Indemnitee in connection with any Proceeding (other than a Proceeding brought to enforce indemnification under this Agreement, applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors)

to which Indemnitee is, or is threatened to be, made a party or a witness, within ten days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established that the standard of conduct has not been met and which have not been successfully resolved as described in Section 7. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee's financial ability to repay such advanced Expenses and without any requirement to post security therefor.


Section 9.

Procedure for Determination of Entitlement to Indemnification.


(a)

To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.


(b)

Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 9(a) hereof, a determination, if required by applicable law, with respect to Indemnitee's entitlement thereto shall promptly be made in the specific case: (i) if a Change in

Control shall have occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred, (A) by the Board of Directors (or a duly authorized committee thereof) by a majority vote of a quorum consisting of Disinterested Directors (as herein defined), or (B) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 9. Any Expenses actually and reasonably incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.


Section 10.

Presumptions and Effect of Certain Proceedings.


(a)

In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.


(b)

The termination of any Proceeding by judgment, order, settlement, conviction, a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.


Section 11.

Remedies of Indemnitee.


(a)

If (i) a determination is made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 9(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 7 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 11(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his rights under Section 7 of this Agreement.

(b)

In any judicial proceeding or arbitration commenced pursuant to this Section 11 the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be.

(c)

If a determination shall have been made pursuant to Section 9(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification.

(d)

In the event that Indemnitee, pursuant to this Section 11, seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.

Section 12.

Defense of the Underlying Proceeding.

(a)

Indemnitee shall notify the Company promptly upon being served with or receiving any summons, citation, subpoena, complaint, indictment, information, notice, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder; provided, however, that the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company's ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

(b)

Subject to the provisions of the last sentence of this Section 12(b) and of Section 12(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 12(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee. This Section 12(b) shall not apply to a Proceeding brought by Indemnitee under Section 11 above or Section 18 below.

(c)

Notwithstanding the provisions of Section 12(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee's Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that he may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company (subject to Section 11(d)), to represent Indemnitee in connection with any such matter.

Section 13.

Non-Exclusivity; Survival of Rights; Subrogation; Insurance.


(a)

The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.

(b)

In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(c)

The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.



11




Section 14.

Insurance. The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors of the Company, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee for service as a director or officer of the Company and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee for service as a director or officer of the Company. Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and reasonable Expenses actually and reasonably incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence.


Section 15.

Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is or may be, by reason of his Corporate Status, a witness in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party but in which the Indemnitee receives a subpoena to testify, he shall be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.


Section 16.

Duration of Agreement; Binding Effect.


(a)

This Agreement shall continue until and terminate ten years after the date that Indemnitee's Corporate Status shall have ceased; provided, that the rights of Indemnitee hereunder shall continue until the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advance of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto.

(b)

The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the written request of the Company, and shall inure to the benefit of Indemnitee and his spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.


(c)

The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.





Section 17.

Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.


Section 18.

Exception to Right of Indemnification or Advance of Expenses. Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, unless (a) the Proceeding is brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Sections 8 and 11 of this Agreement, or (b) the Company's Bylaws, as amended, the Charter, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.


Section 19.

Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.


Section 20.

Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.


Section 21.

Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.


Section 22.

Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:


(a)

If to Indemnitee, to: The address set forth on the signature page hereto.



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(b)

If to the Company to:

Inland Western Retail Real Estate Trust, Inc.

Streetaddress2901 Butterfield Road

CityplaceOak Brook, StateIllinois  PostalCode60523

Attn:  Chief Operating Officer and Chief Financial Officer


With a copy to:

Inland Western Retail Real Estate Trust, Inc.

Streetaddress2901 Butterfield Road

CityplaceOak Brook, StateIllinois  PostalCode60523

Attn:  General Counsel


or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.


Section 23.

Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of StateplaceMaryland, without regard to its conflicts of laws rules.

Section 24.

Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

[SIGNATURE PAGE FOLLOWS]





IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.


ATTEST:

COMPANY


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.


By:

(SEAL) Name:  Steven P. Grimes

Title:  

Chief Operating Officer and Chief Financial

Officer



WITNESS:

INDEMNITEE

Name:  

Dione K. McConnell

Address:  

Inland Western Retail Real

Estate Trust, Inc.

Streetaddress2901 Butterfield Road

CityplaceOak Brook, PostalCodeIL PostalCode60523



11




EXHIBIT A


FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED The Board of Directors of Inland Western Retail Real Estate Trust, Inc.


Re: Undertaking to Repay Expenses Advanced


Ladies and Gentlemen:


This undertaking is being provided pursuant to that certain Indemnification Agreement dated the

day of

, 200   , by and between Inland Western Retail Real Estate Trust, Inc. (the "Company") and the undersigned Indemnitee (the "Indemnification Agreement"), pursuant to which I am entitled to advance of expenses in connection with [Description of Proceeding] (the "Proceeding").


Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.


I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm that at all times, insofar as I was involved as an officer of the Company, in any of the facts or events giving rise to the Proceeding, I (1) acted in good faith and honestly, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.


In consideration of the advance of Expenses by the Company for reasonable attorneys' fees and related expenses incurred by me in connection with the Proceeding (the "Advanced Expenses"), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established and which have not been successfully resolved as described in Section 7 of the Indemnification Agreement. To the extent that Advanced Expenses do not relate to a specific claim, issue or matter in the Proceeding, I agree that such Expenses shall be allocated on a reasonable and proportionate basis.


IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this

day of

, 200__ .

WITNESS:


Endnotes

(SEAL)









12






109412-1

EXHIBIT 10.564


INDEMNIFICATION AGREEMENT



THIS INDEMNIFICATION AGREEMENT is made and entered into this 15 th day of

November, 2007 ("Agreement"), by and between INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a StateplaceMaryland corporation (the "Company"), and David P. Bennett ("Indemnitee").


WHEREAS, at the request of the Company, Indemnitee currently serves as an officer of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of his service; and


WHEREAS, as an inducement to Indemnitee to continue to serve as such officer, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings, to the maximum extent permitted by law; and

WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses;


NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:


SnplaceSection SnI.

Definitions. For purposes of this Agreement:


(a)

"Change in Control" means a change in control of the Company occurring after
the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the "Act"), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if after the Effective Date (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of the Company's then outstanding securities without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person attaining such percentage interest; (ii) there occurs a proxy contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) during any period of two consecutive years, other than as a result of an event described in clause (a)(ii) of this Section 1, individuals who at the beginning of such period constituted the Board of Directors (including for this purpose any new director whose election or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board of Directors.





(b)

"Corporate Status" means the status of a person who is or was a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise for which such person is or was serving at the request of the Company.


(c)

"Disinterested Director" means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.


(d)

"Effective Date" means the date set forth in the first paragraph of this Agreement.


(e)

"Expenses" shall include all reasonable and out-of-pocket attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.


(f)

"Independent Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to or witness in the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. If a Change of Control has not occurred, Independent Counsel shall be selected by the Board of Directors, with the approval of Indemnitee, which approval will not be unreasonably withheld. If a Change of Control has occurred, Independent Counsel shall be selected by Indemnitee, with the approval of the Board of Directors, which approval will not be unreasonably withheld.


(g)

"Proceeding" includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative (including on appeal), except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee.


Section 2.

Services by Indemnitee. Indemnitee will serve as an officer of the Company. However, this Agreement shall not impose any obligation on Indemnitee or the Company to continue Indemnitee's service to the Company beyond any period otherwise required by law or by other agreements or commitments of the parties, if any.


Section 3.

Indemnification - General. The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the maximum extent permitted by Maryland law in effect on the date hereof and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the date hereof. The rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set

forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law ("MGCL").


Section 4.

Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed Proceeding, other than a Proceeding by or in the right of the Company. Pursuant to this Section 4, Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding by reason of his Corporate Status unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty, (ii) Indemnitee actually received an improper personal benefit in money, property or services, or (iii) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his conduct was unlawful.


Section 5.

Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 5 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 5, Indemnitee shall be indemnified against all amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to such a Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (ii) Indemnitee actually received an improper personal benefit in money, property or services.


Section 6.

Court-Ordered Indemnification. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification in the following circumstances:


(a)

if it determines Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the expenses of securing such reimbursement; or


(b)

if it determines that Indemnitee is fairly and reasonably entitled to

indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding.


Section 7.

Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, and without limiting any

such provision, to the extent that Indemnitee is, by reason of his Corporate Status, made a party to and is successful, on the merits or otherwise, in the defense of any Proceeding, he shall be indemnified for all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.


Section 8.

Advance of Expenses. The Company shall advance all reasonable Expenses actually and reasonably incurred by or on behalf of Indemnitee in connection with any Proceeding (other than a Proceeding brought to enforce indemnification under this Agreement, applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors)

to which Indemnitee is, or is threatened to be, made a party or a witness, within ten days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established that the standard of conduct has not been met and which have not been successfully resolved as described in Section 7. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee's financial ability to repay such advanced Expenses and without any requirement to post security therefor.


Section 9.

Procedure for Determination of Entitlement to Indemnification.


(a)

To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.


(b)

Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 9(a) hereof, a determination, if required by applicable law, with respect to Indemnitee's entitlement thereto shall promptly be made in the specific case: (i) if a Change in

Control shall have occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred, (A) by the Board of Directors (or a duly authorized committee thereof) by a majority vote of a quorum consisting of Disinterested Directors (as herein defined), or (B) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 9. Any Expenses actually and reasonably incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.


Section 10.

Presumptions and Effect of Certain Proceedings.


(a)

In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.


(b)

The termination of any Proceeding by judgment, order, settlement, conviction, a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.


Section 11.

Remedies of Indemnitee.


(a)

If (i) a determination is made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 9(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 7 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 11(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his rights under Section 7 of this Agreement.

(b)

In any judicial proceeding or arbitration commenced pursuant to this Section 11 the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be.

(c)

If a determination shall have been made pursuant to Section 9(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification.

(d)

In the event that Indemnitee, pursuant to this Section 11, seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.

Section 12.

Defense of the Underlying Proceeding.

(a)

Indemnitee shall notify the Company promptly upon being served with or receiving any summons, citation, subpoena, complaint, indictment, information, notice, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder; provided, however, that the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company's ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

(b)

Subject to the provisions of the last sentence of this Section 12(b) and of Section 12(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 12(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee. This Section 12(b) shall not apply to a Proceeding brought by Indemnitee under Section 11 above or Section 18 below.

(c)

Notwithstanding the provisions of Section 12(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee's Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that he may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company (subject to Section 11(d)), to represent Indemnitee in connection with any such matter.

Section 13.

Non-Exclusivity; Survival of Rights; Subrogation; Insurance.


(a)

The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.

(b)

In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(c)

The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.



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Section 14.

Insurance. The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors of the Company, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee for service as a director or officer of the Company and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee for service as a director or officer of the Company. Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and reasonable Expenses actually and reasonably incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence.


Section 15.

Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is or may be, by reason of his Corporate Status, a witness in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party but in which the Indemnitee receives a subpoena to testify, he shall be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.


Section 16.

Duration of Agreement; Binding Effect.


(a)

This Agreement shall continue until and terminate ten years after the date that Indemnitee's Corporate Status shall have ceased; provided, that the rights of Indemnitee hereunder shall continue until the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advance of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto.

(b)

The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the written request of the Company, and shall inure to the benefit of Indemnitee and his spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.


(c)

The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.





Section 17.

Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.


Section 18.

Exception to Right of Indemnification or Advance of Expenses. Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, unless (a) the Proceeding is brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Sections 8 and 11 of this Agreement, or (b) the Company's Bylaws, as amended, the Charter, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.


Section 19.

Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.


Section 20.

Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.


Section 21.

Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.


Section 22.

Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:


(a)

If to Indemnitee, to: The address set forth on the signature page hereto.



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(b)

If to the Company to:

Inland Western Retail Real Estate Trust, Inc.

Streetaddress2901 Butterfield Road

CityplaceOak Brook, StateIllinois  PostalCode60523

Attn:  Chief Operating Officer and Chief Financial Officer


With a copy to:

Inland Western Retail Real Estate Trust, Inc.

Streetaddress2901 Butterfield Road

CityplaceOak Brook, StateIllinois  PostalCode60523

Attn:  General Counsel


or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.


Section 23.

Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of StateplaceMaryland, without regard to its conflicts of laws rules.

Section 24.

Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

[SIGNATURE PAGE FOLLOWS]





IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.


ATTEST:

COMPANY


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.


By:

(SEAL) Name:  Steven P. Grimes

Title:  

Chief Operating Officer and Chief Financial

Officer



WITNESS:

INDEMNITEE

Name:  

David P. Bennett

Address:  

Inland Western Retail Real

Estate Trust, Inc.

Streetaddress2901 Butterfield Road

CityplaceOak Brook, PostalCodeIL PostalCode60523



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EXHIBIT A


FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED The Board of Directors of Inland Western Retail Real Estate Trust, Inc.


Re: Undertaking to Repay Expenses Advanced


Ladies and Gentlemen:


This undertaking is being provided pursuant to that certain Indemnification Agreement dated the

day of

, 200   , by and between Inland Western Retail Real Estate Trust, Inc. (the "Company") and the undersigned Indemnitee (the "Indemnification Agreement"), pursuant to which I am entitled to advance of expenses in connection with [Description of Proceeding] (the "Proceeding").


Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.


I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm that at all times, insofar as I was involved as an officer of the Company, in any of the facts or events giving rise to the Proceeding, I (1) acted in good faith and honestly, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.


In consideration of the advance of Expenses by the Company for reasonable attorneys' fees and related expenses incurred by me in connection with the Proceeding (the "Advanced Expenses"), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established and which have not been successfully resolved as described in Section 7 of the Indemnification Agreement. To the extent that Advanced Expenses do not relate to a specific claim, issue or matter in the Proceeding, I agree that such Expenses shall be allocated on a reasonable and proportionate basis.


IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this

day of

, 200__ .

WITNESS:


Endnotes

(SEAL)









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EXHIBIT 10.565


INDEMNIFICATION AGREEMENT



THIS INDEMNIFICATION AGREEMENT is made and entered into this 15 th day of

November, 2007 ("Agreement"), by and between INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a StateplaceMaryland corporation (the "Company"), and Kelly E. Tucek ("Indemnitee").


WHEREAS, at the request of the Company, Indemnitee currently serves as an officer of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of his service; and


WHEREAS, as an inducement to Indemnitee to continue to serve as such officer, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings, to the maximum extent permitted by law; and

WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses;


NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:


SnplaceSection SnI.

Definitions. For purposes of this Agreement:


(a)

"Change in Control" means a change in control of the Company occurring after
the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the "Act"), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if after the Effective Date (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of the Company's then outstanding securities without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person attaining such percentage interest; (ii) there occurs a proxy contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) during any period of two consecutive years, other than as a result of an event described in clause (a)(ii) of this Section 1, individuals who at the beginning of such period constituted the Board of Directors (including for this purpose any new director whose election or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board of Directors.





(b)

"Corporate Status" means the status of a person who is or was a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise for which such person is or was serving at the request of the Company.


(c)

"Disinterested Director" means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.


(d)

"Effective Date" means the date set forth in the first paragraph of this Agreement.


(e)

"Expenses" shall include all reasonable and out-of-pocket attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.


(f)

"Independent Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to or witness in the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. If a Change of Control has not occurred, Independent Counsel shall be selected by the Board of Directors, with the approval of Indemnitee, which approval will not be unreasonably withheld. If a Change of Control has occurred, Independent Counsel shall be selected by Indemnitee, with the approval of the Board of Directors, which approval will not be unreasonably withheld.


(g)

"Proceeding" includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative (including on appeal), except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee.


Section 2.

Services by Indemnitee. Indemnitee will serve as an officer of the Company. However, this Agreement shall not impose any obligation on Indemnitee or the Company to continue Indemnitee's service to the Company beyond any period otherwise required by law or by other agreements or commitments of the parties, if any.


Section 3.

Indemnification - General. The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the maximum extent permitted by Maryland law in effect on the date hereof and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the date hereof. The rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set

forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law ("MGCL").


Section 4.

Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed Proceeding, other than a Proceeding by or in the right of the Company. Pursuant to this Section 4, Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding by reason of his Corporate Status unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty, (ii) Indemnitee actually received an improper personal benefit in money, property or services, or (iii) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his conduct was unlawful.


Section 5.

Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 5 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 5, Indemnitee shall be indemnified against all amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to such a Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (ii) Indemnitee actually received an improper personal benefit in money, property or services.


Section 6.

Court-Ordered Indemnification. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification in the following circumstances:


(a)

if it determines Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the expenses of securing such reimbursement; or


(b)

if it determines that Indemnitee is fairly and reasonably entitled to

indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding.


Section 7.

Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, and without limiting any

such provision, to the extent that Indemnitee is, by reason of his Corporate Status, made a party to and is successful, on the merits or otherwise, in the defense of any Proceeding, he shall be indemnified for all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.


Section 8.

Advance of Expenses. The Company shall advance all reasonable Expenses actually and reasonably incurred by or on behalf of Indemnitee in connection with any Proceeding (other than a Proceeding brought to enforce indemnification under this Agreement, applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors)

to which Indemnitee is, or is threatened to be, made a party or a witness, within ten days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established that the standard of conduct has not been met and which have not been successfully resolved as described in Section 7. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee's financial ability to repay such advanced Expenses and without any requirement to post security therefor.


Section 9.

Procedure for Determination of Entitlement to Indemnification.


(a)

To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.


(b)

Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 9(a) hereof, a determination, if required by applicable law, with respect to Indemnitee's entitlement thereto shall promptly be made in the specific case: (i) if a Change in

Control shall have occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred, (A) by the Board of Directors (or a duly authorized committee thereof) by a majority vote of a quorum consisting of Disinterested Directors (as herein defined), or (B) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 9. Any Expenses actually and reasonably incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.


Section 10.

Presumptions and Effect of Certain Proceedings.


(a)

In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.


(b)

The termination of any Proceeding by judgment, order, settlement, conviction, a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.


Section 11.

Remedies of Indemnitee.


(a)

If (i) a determination is made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 9(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 7 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 11(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his rights under Section 7 of this Agreement.

(b)

In any judicial proceeding or arbitration commenced pursuant to this Section 11 the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be.

(c)

If a determination shall have been made pursuant to Section 9(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification.

(d)

In the event that Indemnitee, pursuant to this Section 11, seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.

Section 12.

Defense of the Underlying Proceeding.

(a)

Indemnitee shall notify the Company promptly upon being served with or receiving any summons, citation, subpoena, complaint, indictment, information, notice, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder; provided, however, that the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company's ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

(b)

Subject to the provisions of the last sentence of this Section 12(b) and of Section 12(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 12(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee. This Section 12(b) shall not apply to a Proceeding brought by Indemnitee under Section 11 above or Section 18 below.

(c)

Notwithstanding the provisions of Section 12(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee's Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that he may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company (subject to Section 11(d)), to represent Indemnitee in connection with any such matter.

Section 13.

Non-Exclusivity; Survival of Rights; Subrogation; Insurance.


(a)

The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.

(b)

In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(c)

The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.



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Section 14.

Insurance. The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors of the Company, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee for service as a director or officer of the Company and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee for service as a director or officer of the Company. Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and reasonable Expenses actually and reasonably incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence.


Section 15.

Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is or may be, by reason of his Corporate Status, a witness in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party but in which the Indemnitee receives a subpoena to testify, he shall be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.


Section 16.

Duration of Agreement; Binding Effect.


(a)

This Agreement shall continue until and terminate ten years after the date that Indemnitee's Corporate Status shall have ceased; provided, that the rights of Indemnitee hereunder shall continue until the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advance of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto.

(b)

The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the written request of the Company, and shall inure to the benefit of Indemnitee and his spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.


(c)

The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.





Section 17.

Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.


Section 18.

Exception to Right of Indemnification or Advance of Expenses. Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, unless (a) the Proceeding is brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Sections 8 and 11 of this Agreement, or (b) the Company's Bylaws, as amended, the Charter, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.


Section 19.

Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.


Section 20.

Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.


Section 21.

Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.


Section 22.

Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:


(a)

If to Indemnitee, to: The address set forth on the signature page hereto.



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(b)

If to the Company to:

Inland Western Retail Real Estate Trust, Inc.

Streetaddress2901 Butterfield Road

CityplaceOak Brook, StateIllinois  PostalCode60523

Attn:  Chief Operating Officer and Chief Financial Officer


With a copy to:

Inland Western Retail Real Estate Trust, Inc.

Streetaddress2901 Butterfield Road

CityplaceOak Brook, StateIllinois  PostalCode60523

Attn:  General Counsel


or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.


Section 23.

Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of StateplaceMaryland, without regard to its conflicts of laws rules.

Section 24.

Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

[SIGNATURE PAGE FOLLOWS]





IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.


ATTEST:

COMPANY


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.


By:

(SEAL) Name:  Steven P. Grimes

Title:  

Chief Operating Officer and Chief Financial

Officer



WITNESS:

INDEMNITEE

Name:  

Kelly E. Tucek

Address:  

Inland Western Retail Real

Estate Trust, Inc.

Streetaddress2901 Butterfield Road

CityplaceOak Brook, PostalCodeIL PostalCode60523



12






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EXHIBIT A


FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED The Board of Directors of Inland Western Retail Real Estate Trust, Inc.


Re: Undertaking to Repay Expenses Advanced


Ladies and Gentlemen:


This undertaking is being provided pursuant to that certain Indemnification Agreement dated the

day of

, 200   , by and between Inland Western Retail Real Estate Trust, Inc. (the "Company") and the undersigned Indemnitee (the "Indemnification Agreement"), pursuant to which I am entitled to advance of expenses in connection with [Description of Proceeding] (the "Proceeding").


Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.


I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm that at all times, insofar as I was involved as an officer of the Company, in any of the facts or events giving rise to the Proceeding, I (1) acted in good faith and honestly, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.


In consideration of the advance of Expenses by the Company for reasonable attorneys' fees and related expenses incurred by me in connection with the Proceeding (the "Advanced Expenses"), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established and which have not been successfully resolved as described in Section 7 of the Indemnification Agreement. To the extent that Advanced Expenses do not relate to a specific claim, issue or matter in the Proceeding, I agree that such Expenses shall be allocated on a reasonable and proportionate basis.


IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this

day of

, 200__ .

WITNESS:


Endnotes

(SEAL)









11




EXHIBIT 10.566


INDEMNIFICATION AGREEMENT



THIS INDEMNIFICATION AGREEMENT is made and entered into this 15 th day of

November, 2007 ("Agreement"), by and between INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a StateplaceMaryland corporation (the "Company"), and James W. Kleifges ("Indemnitee").


WHEREAS, at the request of the Company, Indemnitee currently serves as an officer of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of his service; and


WHEREAS, as an inducement to Indemnitee to continue to serve as such officer, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings, to the maximum extent permitted by law; and

WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses;


NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:


SnplaceSection PostalCodeI.

Definitions. For purposes of this Agreement:


(a)

"Change in Control" means a change in control of the Company occurring after
the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the "Act"), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if after the Effective Date (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of the Company's then outstanding securities without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person attaining such percentage interest; (ii) there occurs a proxy contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) during any period of two consecutive years, other than as a result of an event described in clause (a)(ii) of this Section 1, individuals who at the beginning of such period constituted the Board of Directors (including for this purpose any new director whose election or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board of Directors.





(b)

"Corporate Status" means the status of a person who is or was a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise for which such person is or was serving at the request of the Company.


(c)

"Disinterested Director" means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.


(d)

"Effective Date" means the date set forth in the first paragraph of this Agreement.


(e)

"Expenses" shall include all reasonable and out-of-pocket attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.


(f)

"Independent Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to or witness in the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. If a Change of Control has not occurred, Independent Counsel shall be selected by the Board of Directors, with the approval of Indemnitee, which approval will not be unreasonably withheld. If a Change of Control has occurred, Independent Counsel shall be selected by Indemnitee, with the approval of the Board of Directors, which approval will not be unreasonably withheld.


(g)

"Proceeding" includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative (including on appeal), except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee.


Section 2.

Services by Indemnitee. Indemnitee will serve as an officer of the Company. However, this Agreement shall not impose any obligation on Indemnitee or the Company to continue Indemnitee's service to the Company beyond any period otherwise required by law or by other agreements or commitments of the parties, if any.


Section 3.

Indemnification - General. The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the maximum extent permitted by Maryland law in effect on the date hereof and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the date hereof. The rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set

forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law ("MGCL").


Section 4.

Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed Proceeding, other than a Proceeding by or in the right of the Company. Pursuant to this Section 4, Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding by reason of his Corporate Status unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty, (ii) Indemnitee actually received an improper personal benefit in money, property or services, or (iii) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his conduct was unlawful.


Section 5.

Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 5 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 5, Indemnitee shall be indemnified against all amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to such a Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (ii) Indemnitee actually received an improper personal benefit in money, property or services.


Section 6.

Court-Ordered Indemnification. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification in the following circumstances:


(a)

if it determines Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the expenses of securing such reimbursement; or


(b)

if it determines that Indemnitee is fairly and reasonably entitled to

indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding.


Section 7.

Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, and without limiting any

such provision, to the extent that Indemnitee is, by reason of his Corporate Status, made a party to and is successful, on the merits or otherwise, in the defense of any Proceeding, he shall be indemnified for all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.


Section 8.

Advance of Expenses. The Company shall advance all reasonable Expenses actually and reasonably incurred by or on behalf of Indemnitee in connection with any Proceeding (other than a Proceeding brought to enforce indemnification under this Agreement, applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors)

to which Indemnitee is, or is threatened to be, made a party or a witness, within ten days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established that the standard of conduct has not been met and which have not been successfully resolved as described in Section 7. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee's financial ability to repay such advanced Expenses and without any requirement to post security therefor.


Section 9.

Procedure for Determination of Entitlement to Indemnification.


(a)

To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.


(b)

Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 9(a) hereof, a determination, if required by applicable law, with respect to Indemnitee's entitlement thereto shall promptly be made in the specific case: (i) if a Change in

Control shall have occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred, (A) by the Board of Directors (or a duly authorized committee thereof) by a majority vote of a quorum consisting of Disinterested Directors (as herein defined), or (B) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 9. Any Expenses actually and reasonably incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.


Section 10.

Presumptions and Effect of Certain Proceedings.


(a)

In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.


(b)

The termination of any Proceeding by judgment, order, settlement, conviction, a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.


Section 11.

Remedies of Indemnitee.


(a)

If (i) a determination is made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 9(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 7 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 11(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his rights under Section 7 of this Agreement.

(b)

In any judicial proceeding or arbitration commenced pursuant to this Section 11 the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be.

(c)

If a determination shall have been made pursuant to Section 9(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification.

(d)

In the event that Indemnitee, pursuant to this Section 11, seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.

Section 12.

Defense of the Underlying Proceeding.

(a)

Indemnitee shall notify the Company promptly upon being served with or receiving any summons, citation, subpoena, complaint, indictment, information, notice, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder; provided, however, that the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company's ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

(b)

Subject to the provisions of the last sentence of this Section 12(b) and of Section 12(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 12(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee. This Section 12(b) shall not apply to a Proceeding brought by Indemnitee under Section 11 above or Section 18 below.

(c)

Notwithstanding the provisions of Section 12(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee's Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that he may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company (subject to Section 11(d)), to represent Indemnitee in connection with any such matter.

Section 13.

Non-Exclusivity; Survival of Rights; Subrogation; Insurance.


(a)

The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.

(b)

In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(c)

The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.



11




Section 14.

Insurance. The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors of the Company, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee for service as a director or officer of the Company and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee for service as a director or officer of the Company. Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and reasonable Expenses actually and reasonably incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence.


Section 15.

Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is or may be, by reason of his Corporate Status, a witness in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party but in which the Indemnitee receives a subpoena to testify, he shall be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.


Section 16.

Duration of Agreement; Binding Effect.


(a)

This Agreement shall continue until and terminate ten years after the date that Indemnitee's Corporate Status shall have ceased; provided, that the rights of Indemnitee hereunder shall continue until the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advance of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto.

(b)

The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the written request of the Company, and shall inure to the benefit of Indemnitee and his spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.


(c)

The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.





Section 17.

Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.


Section 18.

Exception to Right of Indemnification or Advance of Expenses. Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, unless (a) the Proceeding is brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Sections 8 and 11 of this Agreement, or (b) the Company's Bylaws, as amended, the Charter, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.


Section 19.

Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.


Section 20.

Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.


Section 21.

Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.


Section 22.

Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:


(a)

If to Indemnitee, to: The address set forth on the signature page hereto.



11




(b)

If to the Company to:

Inland Western Retail Real Estate Trust, Inc.

PostalCodePostalCode2901 Butterfield Road

PostalCodePostalCodeOak Brook, PostalCodeIllinois  PostalCode60523

Attn:  Chief Operating Officer and Chief Financial Officer


With a copy to:

Inland Western Retail Real Estate Trust, Inc.

PostalCodePostalCode2901 Butterfield Road

PostalCodePostalCodeOak Brook, PostalCodeIllinois  PostalCode60523

Attn:  General Counsel


or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.


Section 23.

Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of PostalCodePostalCodeMaryland, without regard to its conflicts of laws rules.

Section 24.

Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

[SIGNATURE PAGE FOLLOWS]





IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.


ATTEST:

COMPANY


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.


By:

(SEAL) Name:  Steven P. Grimes

Title:  

Chief Operating Officer and Chief Financial

Officer



WITNESS:

INDEMNITEE

Name:  

James W. Kleifges

Address:  

Inland Western Retail Real

Estate Trust, Inc.

PostalCodePostalCode2901 Butterfield Road

PostalCodePostalCodeOak Brook, PostalCodeIL PostalCode60523



11




EXHIBIT A


FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED The Board of Directors of Inland Western Retail Real Estate Trust, Inc.


Re: Undertaking to Repay Expenses Advanced


Ladies and Gentlemen:


This undertaking is being provided pursuant to that certain Indemnification Agreement dated the

day of

, 200   , by and between Inland Western Retail Real Estate Trust, Inc. (the "Company") and the undersigned Indemnitee (the "Indemnification Agreement"), pursuant to which I am entitled to advance of expenses in connection with [Description of Proceeding] (the "Proceeding").


Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.


I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm that at all times, insofar as I was involved as an officer of the Company, in any of the facts or events giving rise to the Proceeding, I (1) acted in good faith and honestly, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.


In consideration of the advance of Expenses by the Company for reasonable attorneys' fees and related expenses incurred by me in connection with the Proceeding (the "Advanced Expenses"), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established and which have not been successfully resolved as described in Section 7 of the Indemnification Agreement. To the extent that Advanced Expenses do not relate to a specific claim, issue or matter in the Proceeding, I agree that such Expenses shall be allocated on a reasonable and proportionate basis.


IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this

day of

, 200__ .

WITNESS:


Endnotes

(SEAL)









11




EXHIBIT 10.568


INDEMNIFICATION AGREEMENT



THIS INDEMNIFICATION AGREEMENT is made and entered into this 15 th day of

November, 2007 ("Agreement"), by and between INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a StateplaceMaryland corporation (the "Company"), and Dennis K. Holland ("Indemnitee").


WHEREAS, at the request of the Company, Indemnitee currently serves as an officer of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of his service; and


WHEREAS, as an inducement to Indemnitee to continue to serve as such officer, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings, to the maximum extent permitted by law; and

WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses;


NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:


SnplaceSection SnI.

Definitions. For purposes of this Agreement:


(a)

"Change in Control" means a change in control of the Company occurring after
the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the "Act"), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if after the Effective Date (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of the Company's then outstanding securities without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person attaining such percentage interest; (ii) there occurs a proxy contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) during any period of two consecutive years, other than as a result of an event described in clause (a)(ii) of this Section 1, individuals who at the beginning of such period constituted the Board of Directors (including for this purpose any new director whose election or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board of Directors.





(b)

"Corporate Status" means the status of a person who is or was a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise for which such person is or was serving at the request of the Company.


(c)

"Disinterested Director" means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.


(d)

"Effective Date" means the date set forth in the first paragraph of this Agreement.


(e)

"Expenses" shall include all reasonable and out-of-pocket attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.


(f)

"Independent Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to or witness in the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. If a Change of Control has not occurred, Independent Counsel shall be selected by the Board of Directors, with the approval of Indemnitee, which approval will not be unreasonably withheld. If a Change of Control has occurred, Independent Counsel shall be selected by Indemnitee, with the approval of the Board of Directors, which approval will not be unreasonably withheld.


(g)

"Proceeding" includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative (including on appeal), except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee.


Section 2.

Services by Indemnitee. Indemnitee will serve as an officer of the Company. However, this Agreement shall not impose any obligation on Indemnitee or the Company to continue Indemnitee's service to the Company beyond any period otherwise required by law or by other agreements or commitments of the parties, if any.


Section 3.

Indemnification - General. The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the maximum extent permitted by Maryland law in effect on the date hereof and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the date hereof. The rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set

forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law ("MGCL").


Section 4.

Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed Proceeding, other than a Proceeding by or in the right of the Company. Pursuant to this Section 4, Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding by reason of his Corporate Status unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty, (ii) Indemnitee actually received an improper personal benefit in money, property or services, or (iii) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his conduct was unlawful.


Section 5.

Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 5 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 5, Indemnitee shall be indemnified against all amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to such a Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (ii) Indemnitee actually received an improper personal benefit in money, property or services.


Section 6.

Court-Ordered Indemnification. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification in the following circumstances:


(a)

if it determines Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the expenses of securing such reimbursement; or


(b)

if it determines that Indemnitee is fairly and reasonably entitled to

indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding.


Section 7.

Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, and without limiting any

such provision, to the extent that Indemnitee is, by reason of his Corporate Status, made a party to and is successful, on the merits or otherwise, in the defense of any Proceeding, he shall be indemnified for all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.


Section 8.

Advance of Expenses. The Company shall advance all reasonable Expenses actually and reasonably incurred by or on behalf of Indemnitee in connection with any Proceeding (other than a Proceeding brought to enforce indemnification under this Agreement, applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors)

to which Indemnitee is, or is threatened to be, made a party or a witness, within ten days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established that the standard of conduct has not been met and which have not been successfully resolved as described in Section 7. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee's financial ability to repay such advanced Expenses and without any requirement to post security therefor.


Section 9.

Procedure for Determination of Entitlement to Indemnification.


(a)

To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.


(b)

Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 9(a) hereof, a determination, if required by applicable law, with respect to Indemnitee's entitlement thereto shall promptly be made in the specific case: (i) if a Change in

Control shall have occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred, (A) by the Board of Directors (or a duly authorized committee thereof) by a majority vote of a quorum consisting of Disinterested Directors (as herein defined), or (B) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 9. Any Expenses actually and reasonably incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.


Section 10.

Presumptions and Effect of Certain Proceedings.


(a)

In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.


(b)

The termination of any Proceeding by judgment, order, settlement, conviction, a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.


Section 11.

Remedies of Indemnitee.


(a)

If (i) a determination is made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 9(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 7 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 11(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his rights under Section 7 of this Agreement.

(b)

In any judicial proceeding or arbitration commenced pursuant to this Section 11 the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be.

(c)

If a determination shall have been made pursuant to Section 9(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification.

(d)

In the event that Indemnitee, pursuant to this Section 11, seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.

Section 12.

Defense of the Underlying Proceeding.

(a)

Indemnitee shall notify the Company promptly upon being served with or receiving any summons, citation, subpoena, complaint, indictment, information, notice, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder; provided, however, that the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company's ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

(b)

Subject to the provisions of the last sentence of this Section 12(b) and of Section 12(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 12(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee. This Section 12(b) shall not apply to a Proceeding brought by Indemnitee under Section 11 above or Section 18 below.

(c)

Notwithstanding the provisions of Section 12(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee's Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that he may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company (subject to Section 11(d)), to represent Indemnitee in connection with any such matter.

Section 13.

Non-Exclusivity; Survival of Rights; Subrogation; Insurance.


(a)

The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.

(b)

In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(c)

The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.



11




Section 14.

Insurance. The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors of the Company, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee for service as a director or officer of the Company and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee for service as a director or officer of the Company. Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and reasonable Expenses actually and reasonably incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence.


Section 15.

Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is or may be, by reason of his Corporate Status, a witness in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party but in which the Indemnitee receives a subpoena to testify, he shall be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.


Section 16.

Duration of Agreement; Binding Effect.


(a)

This Agreement shall continue until and terminate ten years after the date that Indemnitee's Corporate Status shall have ceased; provided, that the rights of Indemnitee hereunder shall continue until the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advance of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto.

(b)

The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the written request of the Company, and shall inure to the benefit of Indemnitee and his spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.


(c)

The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.





Section 17.

Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.


Section 18.

Exception to Right of Indemnification or Advance of Expenses. Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, unless (a) the Proceeding is brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Sections 8 and 11 of this Agreement, or (b) the Company's Bylaws, as amended, the Charter, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.


Section 19.

Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.


Section 20.

Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.


Section 21.

Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.


Section 22.

Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:


(a)

If to Indemnitee, to: The address set forth on the signature page hereto.



11




(b)

If to the Company to:

Inland Western Retail Real Estate Trust, Inc.

Streetaddress2901 Butterfield Road

CityplaceOak Brook, StateIllinois  PostalCode60523

Attn:  Chief Operating Officer and Chief Financial Officer


With a copy to:

Inland Western Retail Real Estate Trust, Inc.

Streetaddress2901 Butterfield Road

CityplaceOak Brook, StateIllinois  PostalCode60523

Attn:  General Counsel


or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.


Section 23.

Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of StateplaceMaryland, without regard to its conflicts of laws rules.

Section 24.

Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

[SIGNATURE PAGE FOLLOWS]





IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.


ATTEST:

COMPANY


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.


By:

(SEAL) Name:  Steven P. Grimes

Title:  

Chief Operating Officer and Chief Financial

Officer



WITNESS:

INDEMNITEE

Name:  

Dennis K. Holland

Address:  

Inland Western Retail Real

Estate Trust, Inc.

Streetaddress2907 Butterfield Road

CityplaceOak Brook, PostalCodeIL PostalCode60523



11




EXHIBIT A


FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED The Board of Directors of Inland Western Retail Real Estate Trust, Inc.


Re: Undertaking to Repay Expenses Advanced


Ladies and Gentlemen:


This undertaking is being provided pursuant to that certain Indemnification Agreement dated the

day of

, 200   , by and between Inland Western Retail Real Estate Trust, Inc. (the "Company") and the undersigned Indemnitee (the "Indemnification Agreement"), pursuant to which I am entitled to advance of expenses in connection with [Description of Proceeding] (the "Proceeding").


Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.


I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm that at all times, insofar as I was involved as an officer of the Company, in any of the facts or events giving rise to the Proceeding, I (1) acted in good faith and honestly, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.


In consideration of the advance of Expenses by the Company for reasonable attorneys' fees and related expenses incurred by me in connection with the Proceeding (the "Advanced Expenses"), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established and which have not been successfully resolved as described in Section 7 of the Indemnification Agreement. To the extent that Advanced Expenses do not relate to a specific claim, issue or matter in the Proceeding, I agree that such Expenses shall be allocated on a reasonable and proportionate basis.


IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this

day of

, 200__ .

WITNESS:


Endnotes

(SEAL)









1






EXHIBIT 10.569


INDEMNIFICATION AGREEMENT



THIS INDEMNIFICATION AGREEMENT is made and entered into this 15 th day of

November, 2007 ("Agreement"), by and between INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a StateplaceMaryland corporation (the "Company"), and Niall J. Byrne ("Indemnitee").


WHEREAS, at the request of the Company, Indemnitee currently serves as an officer of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of his service; and


WHEREAS, as an inducement to Indemnitee to continue to serve as such officer, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings, to the maximum extent permitted by law; and

WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses;


NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:


SnplaceSection SnI.

Definitions. For purposes of this Agreement:


(a)

"Change in Control" means a change in control of the Company occurring after
the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the "Act"), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if after the Effective Date (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of the Company's then outstanding securities without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person attaining such percentage interest; (ii) there occurs a proxy contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) during any period of two consecutive years, other than as a result of an event described in clause (a)(ii) of this Section 1, individuals who at the beginning of such period constituted the Board of Directors (including for this purpose any new director whose election or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board of Directors.





(b)

"Corporate Status" means the status of a person who is or was a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise for which such person is or was serving at the request of the Company.


(c)

"Disinterested Director" means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.


(d)

"Effective Date" means the date set forth in the first paragraph of this Agreement.


(e)

"Expenses" shall include all reasonable and out-of-pocket attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.


(f)

"Independent Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to or witness in the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. If a Change of Control has not occurred, Independent Counsel shall be selected by the Board of Directors, with the approval of Indemnitee, which approval will not be unreasonably withheld. If a Change of Control has occurred, Independent Counsel shall be selected by Indemnitee, with the approval of the Board of Directors, which approval will not be unreasonably withheld.


(g)

"Proceeding" includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative (including on appeal), except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee.


Section 2.

Services by Indemnitee. Indemnitee will serve as an officer of the Company. However, this Agreement shall not impose any obligation on Indemnitee or the Company to continue Indemnitee's service to the Company beyond any period otherwise required by law or by other agreements or commitments of the parties, if any.


Section 3.

Indemnification - General. The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the maximum extent permitted by Maryland law in effect on the date hereof and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the date hereof. The rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set

forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law ("MGCL").


Section 4.

Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed Proceeding, other than a Proceeding by or in the right of the Company. Pursuant to this Section 4, Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding by reason of his Corporate Status unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty, (ii) Indemnitee actually received an improper personal benefit in money, property or services, or (iii) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his conduct was unlawful.


Section 5.

Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 5 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 5, Indemnitee shall be indemnified against all amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to such a Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (ii) Indemnitee actually received an improper personal benefit in money, property or services.


Section 6.

Court-Ordered Indemnification. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification in the following circumstances:


(a)

if it determines Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the expenses of securing such reimbursement; or


(b)

if it determines that Indemnitee is fairly and reasonably entitled to

indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding.


Section 7.

Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, and without limiting any

such provision, to the extent that Indemnitee is, by reason of his Corporate Status, made a party to and is successful, on the merits or otherwise, in the defense of any Proceeding, he shall be indemnified for all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.


Section 8.

Advance of Expenses. The Company shall advance all reasonable Expenses actually and reasonably incurred by or on behalf of Indemnitee in connection with any Proceeding (other than a Proceeding brought to enforce indemnification under this Agreement, applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors)

to which Indemnitee is, or is threatened to be, made a party or a witness, within ten days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established that the standard of conduct has not been met and which have not been successfully resolved as described in Section 7. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee's financial ability to repay such advanced Expenses and without any requirement to post security therefor.


Section 9.

Procedure for Determination of Entitlement to Indemnification.


(a)

To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.


(b)

Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 9(a) hereof, a determination, if required by applicable law, with respect to Indemnitee's entitlement thereto shall promptly be made in the specific case: (i) if a Change in

Control shall have occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred, (A) by the Board of Directors (or a duly authorized committee thereof) by a majority vote of a quorum consisting of Disinterested Directors (as herein defined), or (B) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 9. Any Expenses actually and reasonably incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.


Section 10.

Presumptions and Effect of Certain Proceedings.


(a)

In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.


(b)

The termination of any Proceeding by judgment, order, settlement, conviction, a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.


Section 11.

Remedies of Indemnitee.


(a)

If (i) a determination is made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 9(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 7 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 11(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his rights under Section 7 of this Agreement.

(b)

In any judicial proceeding or arbitration commenced pursuant to this Section 11 the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be.

(c)

If a determination shall have been made pursuant to Section 9(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification.

(d)

In the event that Indemnitee, pursuant to this Section 11, seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.

Section 12.

Defense of the Underlying Proceeding.

(a)

Indemnitee shall notify the Company promptly upon being served with or receiving any summons, citation, subpoena, complaint, indictment, information, notice, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder; provided, however, that the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company's ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

(b)

Subject to the provisions of the last sentence of this Section 12(b) and of Section 12(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 12(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee. This Section 12(b) shall not apply to a Proceeding brought by Indemnitee under Section 11 above or Section 18 below.

(c)

Notwithstanding the provisions of Section 12(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee's Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that he may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company (subject to Section 11(d)), to represent Indemnitee in connection with any such matter.

Section 13.

Non-Exclusivity; Survival of Rights; Subrogation; Insurance.


(a)

The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.

(b)

In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(c)

The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.



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Section 14.

Insurance. The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors of the Company, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee for service as a director or officer of the Company and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee for service as a director or officer of the Company. Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and reasonable Expenses actually and reasonably incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence.


Section 15.

Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is or may be, by reason of his Corporate Status, a witness in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party but in which the Indemnitee receives a subpoena to testify, he shall be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.


Section 16.

Duration of Agreement; Binding Effect.


(a)

This Agreement shall continue until and terminate ten years after the date that Indemnitee's Corporate Status shall have ceased; provided, that the rights of Indemnitee hereunder shall continue until the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advance of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto.

(b)

The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the written request of the Company, and shall inure to the benefit of Indemnitee and his spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.


(c)

The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.





Section 17.

Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.


Section 18.

Exception to Right of Indemnification or Advance of Expenses. Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, unless (a) the Proceeding is brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Sections 8 and 11 of this Agreement, or (b) the Company's Bylaws, as amended, the Charter, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.


Section 19.

Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.


Section 20.

Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.


Section 21.

Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.


Section 22.

Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:


(a)

If to Indemnitee, to: The address set forth on the signature page hereto.



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(b)

If to the Company to:

Inland Western Retail Real Estate Trust, Inc.

Streetaddress2901 Butterfield Road

CityplaceOak Brook, StateIllinois  PostalCode60523

Attn:  Chief Operating Officer and Chief Financial Officer


With a copy to:

Inland Western Retail Real Estate Trust, Inc.

Streetaddress2901 Butterfield Road

CityplaceOak Brook, StateIllinois  PostalCode60523

Attn:  General Counsel


or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.


Section 23.

Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of StateplaceMaryland, without regard to its conflicts of laws rules.

Section 24.

Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

[SIGNATURE PAGE FOLLOWS]





IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.


ATTEST:

COMPANY


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.


By:

(SEAL) Name:  Steven P. Grimes

Title:  

Chief Operating Officer and Chief Financial

Officer



WITNESS:

INDEMNITEE

Name:  

Niall J. Byrne

Address:  Inland Western Retail Real

Estate Trust, Inc.

Streetaddress2907 Butterfield Road

CityplaceOak Brook, PostalCodeIL PostalCode60523



1






EXHIBIT A


FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED The Board of Directors of Inland Western Retail Real Estate Trust, Inc.


Re: Undertaking to Repay Expenses Advanced


Ladies and Gentlemen:


This undertaking is being provided pursuant to that certain Indemnification Agreement dated the

day of

, 200   , by and between Inland Western Retail Real Estate Trust, Inc. (the "Company") and the undersigned Indemnitee (the "Indemnification Agreement"), pursuant to which I am entitled to advance of expenses in connection with [Description of Proceeding] (the "Proceeding").


Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.


I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm that at all times, insofar as I was involved as an officer of the Company, in any of the facts or events giving rise to the Proceeding, I (1) acted in good faith and honestly, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.


In consideration of the advance of Expenses by the Company for reasonable attorneys' fees and related expenses incurred by me in connection with the Proceeding (the "Advanced Expenses"), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established and which have not been successfully resolved as described in Section 7 of the Indemnification Agreement. To the extent that Advanced Expenses do not relate to a specific claim, issue or matter in the Proceeding, I agree that such Expenses shall be allocated on a reasonable and proportionate basis.


IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this

day of

, 200__ .


WITNESS:


Endnotes

(SEAL)









11



EXHIBIT 10.570


INDEMNIFICATION AGREEMENT



THIS INDEMNIFICATION AGREEMENT is made and entered into this 15 th day of

November, 2007 ("Agreement"), by and between INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a placeStateMaryland corporation (the "Company"), and Shane Garrison ("Indemnitee").


WHEREAS, at the request of the Company, Indemnitee currently serves as an officer of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of his service; and


WHEREAS, as an inducement to Indemnitee to continue to serve as such officer, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings, to the maximum extent permitted by law; and

WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses;


NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:


placeSnSection SnI.

Definitions. For purposes of this Agreement:


(a)

"Change in Control" means a change in control of the Company occurring after
the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the "Act"), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if after the Effective Date (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of the Company's then outstanding securities without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person attaining such percentage interest; (ii) there occurs a proxy contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) during any period of two consecutive years, other than as a result of an event described in clause (a)(ii) of this Section 1, individuals who at the beginning of such period constituted the Board of Directors (including for this purpose any new director whose election or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board of Directors.





(b)

"Corporate Status" means the status of a person who is or was a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise for which such person is or was serving at the request of the Company.


(c)

"Disinterested Director" means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.


(d)

"Effective Date" means the date set forth in the first paragraph of this Agreement.


(e)

"Expenses" shall include all reasonable and out-of-pocket attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.


(f)

"Independent Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to or witness in the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. If a Change of Control has not occurred, Independent Counsel shall be selected by the Board of Directors, with the approval of Indemnitee, which approval will not be unreasonably withheld. If a Change of Control has occurred, Independent Counsel shall be selected by Indemnitee, with the approval of the Board of Directors, which approval will not be unreasonably withheld.


(g)

"Proceeding" includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative (including on appeal), except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee.


Section 2.

Services by Indemnitee. Indemnitee will serve as an officer of the Company. However, this Agreement shall not impose any obligation on Indemnitee or the Company to continue Indemnitee's service to the Company beyond any period otherwise required by law or by other agreements or commitments of the parties, if any.


Section 3.

Indemnification - General. The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the maximum extent permitted by Maryland law in effect on the date hereof and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the date hereof. The rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set

forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law ("MGCL").


Section 4.

Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed Proceeding, other than a Proceeding by or in the right of the Company. Pursuant to this Section 4, Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding by reason of his Corporate Status unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty, (ii) Indemnitee actually received an improper personal benefit in money, property or services, or (iii) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his conduct was unlawful.


Section 5.

Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 5 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 5, Indemnitee shall be indemnified against all amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to such a Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (ii) Indemnitee actually received an improper personal benefit in money, property or services.


Section 6.

Court-Ordered Indemnification. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification in the following circumstances:


(a)

if it determines Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the expenses of securing such reimbursement; or


(b)

if it determines that Indemnitee is fairly and reasonably entitled to

indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding.


Section 7.      Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, and without limiting any

such provision, to the extent that Indemnitee is, by reason of his Corporate Status, made a party to and is successful, on the merits or otherwise, in the defense of any Proceeding, he shall be indemnified for all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.


Section 8.

Advance of Expenses. The Company shall advance all reasonable Expenses actually and reasonably incurred by or on behalf of Indemnitee in connection with any Proceeding (other than a Proceeding brought to enforce indemnification under this Agreement, applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors)

to which Indemnitee is, or is threatened to be, made a party or a witness, within ten days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established that the standard of conduct has not been met and which have not been successfully resolved as described in Section 7. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee's financial ability to repay such advanced Expenses and without any requirement to post security therefor.


Section 9.

Procedure for Determination of Entitlement to Indemnification.


(a)

To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.


(b)

Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 9(a) hereof, a determination, if required by applicable law, with respect to Indemnitee's entitlement thereto shall promptly be made in the specific case: (i) if a Change in  

Control shall have occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred, (A) by the Board of Directors (or a duly authorized committee thereof) by a majority vote of a quorum consisting of Disinterested Directors (as herein defined), or (B) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 9. Any Expenses actually and reasonably incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.


Section 10.

Presumptions and Effect of Certain Proceedings.


(a)

In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.


(b)

The termination of any Proceeding by judgment, order, settlement, conviction, a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.


Section 11.

Remedies of Indemnitee.


(a)

If (i) a determination is made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 9(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 7 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 11(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his rights under Section 7 of this Agreement.

(b)

In any judicial proceeding or arbitration commenced pursuant to this Section 11 the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be.

(c)

If a determination shall have been made pursuant to Section 9(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification.

(d)

In the event that Indemnitee, pursuant to this Section 11, seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.

Section 12.

Defense of the Underlying Proceeding.

(a)

Indemnitee shall notify the Company promptly upon being served with or receiving any summons, citation, subpoena, complaint, indictment, information, notice, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder; provided, however, that the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company's ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

(b)

Subject to the provisions of the last sentence of this Section 12(b) and of Section 12(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 12(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which  (i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee. This Section 12(b) shall not apply to a Proceeding brought by Indemnitee under Section 11 above or Section 18 below.

(c)

Notwithstanding the provisions of Section 12(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee's Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that he may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company (subject to Section 11(d)), to represent Indemnitee in connection with any such matter.

Section 13.

Non-Exclusivity; Survival of Rights; Subrogation; Insurance.


(a)

The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.

(b)

In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(c)

The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.



11



Section 14.

Insurance. The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors of the Company, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee for service as a director or officer of the Company and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee for service as a director or officer of the Company. Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and reasonable Expenses actually and reasonably incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence.


Section 15.

Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is or may be, by reason of his Corporate Status, a witness in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party but in which the Indemnitee receives a subpoena to testify, he shall be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.


Section 16.

Duration of Agreement; Binding Effect.


(a)

This Agreement shall continue until and terminate ten years after the date that Indemnitee's Corporate Status shall have ceased; provided, that the rights of Indemnitee hereunder shall continue until the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advance of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto.

(b)

The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the written request of the Company, and shall inure to the benefit of Indemnitee and his spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.


(c)

The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.





Section 17.

Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.


Section 18.

Exception to Right of Indemnification or Advance of Expenses. Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, unless (a) the Proceeding is brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Sections 8 and 11 of this Agreement, or (b) the Company's Bylaws, as amended, the Charter, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.


Section 19.

Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.


Section 20.

Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.


Section 21.

Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.


Section 22.

Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:


(a)

If to Indemnitee, to: The address set forth on the signature page hereto.



11



(b)

If to the Company to:

Inland Western Retail Real Estate Trust, Inc.

addressStreet2901 Butterfield Road

placeCityOak Brook, StateIllinois  PostalCode60523

Attn:  Chief Operating Officer and Chief Financial Officer


With a copy to:

Inland Western Retail Real Estate Trust, Inc.

addressStreet2901 Butterfield Road

placeCityOak Brook, StateIllinois  PostalCode60523

Attn:  General Counsel


or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.


Section 23.

Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of placeStateMaryland, without regard to its conflicts of laws rules.

Section 24.

Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

[SIGNATURE PAGE FOLLOWS]





IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.


ATTEST:

COMPANY


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.


By:

(SEAL) Name:  Steven P. Grimes

Title:  

Chief Operating Officer and Chief Financial

Officer



WITNESS:

INDEMNITEE

Name:  

Shane Garrison

Address:  Inland Western Retail Real

Estate Trust, Inc.

addressStreet2907 Butterfield Road

placeCityOak Brook, StateIL PostalCode60523



11



EXHIBIT A


FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED The Board of Directors of Inland Western Retail Real Estate Trust, Inc.


Re: Undertaking to Repay Expenses Advanced


Ladies and Gentlemen:


This undertaking is being provided pursuant to that certain Indemnification Agreement dated the

day of

, 200   , by and between Inland Western Retail Real Estate Trust, Inc. (the "Company") and the undersigned Indemnitee (the "Indemnification Agreement"), pursuant to which I am entitled to advance of expenses in connection with [Description of Proceeding] (the "Proceeding").


Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.


I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm that at all times, insofar as I was involved as an officer of the Company, in any of the facts or events giving rise to the Proceeding, I (1) acted in good faith and honestly, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.


In consideration of the advance of Expenses by the Company for reasonable attorneys' fees and related expenses incurred by me in connection with the Proceeding (the "Advanced Expenses"), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established and which have not been successfully resolved as described in Section 7 of the Indemnification Agreement. To the extent that Advanced Expenses do not relate to a specific claim, issue or matter in the Proceeding, I agree that such Expenses shall be allocated on a reasonable and proportionate basis.


IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this

day of

, 200__ .

WITNESS:


Endnotes

(SEAL)









1





109211-1

EXHIBIT 99.43


INDEMNIFICATION AGREEMENT



THIS INDEMNIFICATION AGREEMENT is made and entered into this 15 th day of

November, 2007 ("Agreement"), by and between INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a StateplaceMaryland corporation (the "Company"), and Michael J. O’Hanlon ("Indemnitee").


WHEREAS, at the request of the Company, Indemnitee currently serves as an officer of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of his service; and


WHEREAS, as an inducement to Indemnitee to continue to serve as such officer, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings, to the maximum extent permitted by law; and

WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses;


NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:


SnSnPostalCodeplaceSection PostalCodeSnI.

Definitions. For purposes of this Agreement:


(a)

"Change in Control" means a change in control of the Company occurring after
the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the "Act"), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if after the Effective Date (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of the Company's then outstanding securities without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person attaining such percentage interest; (ii) there occurs a proxy contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) during any period of two consecutive years, other than as a result of an event described in clause (a)(ii) of this Section 1, individuals who at the beginning of such period constituted the Board of Directors (including for this purpose any new director whose election or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board of Directors.





(b)

"Corporate Status" means the status of a person who is or was a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise for which such person is or was serving at the request of the Company.


(c)

"Disinterested Director" means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.


(d)

"Effective Date" means the date set forth in the first paragraph of this Agreement.


(e)

"Expenses" shall include all reasonable and out-of-pocket attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.


(f)

"Independent Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to or witness in the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. If a Change of Control has not occurred, Independent Counsel shall be selected by the Board of Directors, with the approval of Indemnitee, which approval will not be unreasonably withheld. If a Change of Control has occurred, Independent Counsel shall be selected by Indemnitee, with the approval of the Board of Directors, which approval will not be unreasonably withheld.


(g)

"Proceeding" includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative (including on appeal), except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee.


Section 2.

Services by Indemnitee. Indemnitee will serve as an officer of the Company. However, this Agreement shall not impose any obligation on Indemnitee or the Company to continue Indemnitee's service to the Company beyond any period otherwise required by law or by other agreements or commitments of the parties, if any.


Section 3.

Indemnification - General. The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the maximum extent permitted by Maryland law in effect on the date hereof and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the date hereof. The rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set

forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law ("MGCL").


Section 4.

Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed Proceeding, other than a Proceeding by or in the right of the Company. Pursuant to this Section 4, Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding by reason of his Corporate Status unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty, (ii) Indemnitee actually received an improper personal benefit in money, property or services, or (iii) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his conduct was unlawful.


Section 5.

Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 5 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 5, Indemnitee shall be indemnified against all amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to such a Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (ii) Indemnitee actually received an improper personal benefit in money, property or services.


Section 6.

Court-Ordered Indemnification. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification in the following circumstances:


(a)

if it determines Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the expenses of securing such reimbursement; or


(b)

if it determines that Indemnitee is fairly and reasonably entitled to

indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding.


Section 7.          Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, and without limiting any

such provision, to the extent that Indemnitee is, by reason of his Corporate Status, made a party to and is successful, on the merits or otherwise, in the defense of any Proceeding, he shall be indemnified for all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.


Section 8.

Advance of Expenses. The Company shall advance all reasonable Expenses actually and reasonably incurred by or on behalf of Indemnitee in connection with any Proceeding (other than a Proceeding brought to enforce indemnification under this Agreement, applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors)

to which Indemnitee is, or is threatened to be, made a party or a witness, within ten days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established that the standard of conduct has not been met and which have not been successfully resolved as described in Section 7. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee's financial ability to repay such advanced Expenses and without any requirement to post security therefor.


Section 9.

Procedure for Determination of Entitlement to Indemnification.


(a)

To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.


(b)

Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 9(a) hereof, a determination, if required by applicable law, with respect to Indemnitee's entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred, (A) by the Board of Directors (or a duly authorized committee thereof) by a majority vote of a quorum consisting of Disinterested Directors (as herein defined), or (B) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 9. Any Expenses actually and reasonably incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.


Section 10.

Presumptions and Effect of Certain Proceedings.


(a)

In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.


(b)

The termination of any Proceeding by judgment, order, settlement, conviction, a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.


Section 11.

Remedies of Indemnitee.


(a)

If (i) a determination is made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 9(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 7 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 11(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his rights under Section 7 of this Agreement.

(b)

In any judicial proceeding or arbitration commenced pursuant to this Section 11 the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be.

(c)

If a determination shall have been made pursuant to Section 9(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification.

(d)

In the event that Indemnitee, pursuant to this Section 11, seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.

Section 12.

Defense of the Underlying Proceeding.

(a)

Indemnitee shall notify the Company promptly upon being served with or receiving any summons, citation, subpoena, complaint, indictment, information, notice, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder; provided, however, that the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company's ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

(b)

Subject to the provisions of the last sentence of this Section 12(b) and of Section 12(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 12(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee. This Section 12(b) shall not apply to a Proceeding brought by Indemnitee under Section 11 above or Section 18 below.

(c)

Notwithstanding the provisions of Section 12(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee's Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that he may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee's choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company (subject to Section 11(d)), to represent Indemnitee in connection with any such matter.

Section 13.

Non-Exclusivity; Survival of Rights; Subrogation; Insurance.


(a)

The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.

(b)

In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(c)

The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.


Section 14.

Insurance. The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors of the Company, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee for service as a director or officer of the Company and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee for service as a director or officer of the Company. Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and reasonable Expenses actually and reasonably incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence.


Section 15.

Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is or may be, by reason of his Corporate Status, a witness in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party but in which the Indemnitee receives a subpoena to testify, he shall be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.


Section 16.

Duration of Agreement; Binding Effect.


(a)

This Agreement shall continue until and terminate ten years after the date that Indemnitee's Corporate Status shall have ceased; provided, that the rights of Indemnitee hereunder shall continue until the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advance of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto.

(b)

The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the written request of the Company, and shall inure to the benefit of Indemnitee and his spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.


(c)

The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.



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Section 17.

Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.


Section 18.

Exception to Right of Indemnification or Advance of Expenses. Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, unless (a) the Proceeding is brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Sections 8 and 11 of this Agreement, or (b) the Company's Bylaws, as amended, the Charter, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.


Section 19.

Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.


Section 20.

Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.


Section 21.

Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.


Section 22.

Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:


(a)

If to Indemnitee, to: The address set forth on the signature page hereto.





(b)

If to the Company to:

Inland Western Retail Real Estate Trust, Inc.

PostalCodeaddressStreet2901 Butterfield Road

PostalCodePostalCodePostalCodeCityOak Brook, PostalCodePostalCodeIllinois  PostalCode60523

Attn:  Chief Operating Officer and Chief Financial Officer


With a copy to:

Inland Western Retail Real Estate Trust, Inc.

PostalCodePostalCodePostalCode2901 Butterfield Road

PostalCodePostalCodePostalCodeOak Brook, PostalCodePostalCodeIllinois  PostalCode60523

Attn:  General Counsel


or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.


Section 23.

Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of PostalCodePostalCodePostalCodeMaryland, without regard to its conflicts of laws rules.

Section 24.

Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

[SIGNATURE PAGE FOLLOWS]



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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.


ATTEST:

COMPANY


INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.


By:

(SEAL) Name:  Steven P. Grimes

Title:  

Chief Operating Officer and Chief Financial

Officer



WITNESS:

INDEMNITEE

Name:  

Michael J. O’Hanlon

Address:  Inland Western Retail Real

Estate Trust, Inc.

PostalCodePostalCodePostalCode2907 Butterfield Road

PostalCodePostalCodeOak Brook, PostalCodeIL PostalCode60523





EXHIBIT A


FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED The Board of Directors of Inland Western Retail Real Estate Trust, Inc.


Re: Undertaking to Repay Expenses Advanced


Ladies and Gentlemen:


This undertaking is being provided pursuant to that certain Indemnification Agreement dated the

day of

, 200   , by and between Inland Western Retail Real Estate Trust, Inc. (the "Company") and the undersigned Indemnitee (the "Indemnification Agreement"), pursuant to which I am entitled to advance of expenses in connection with [Description of Proceeding] (the "Proceeding").


Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.


I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm that at all times, insofar as I was involved as an officer of the Company, in any of the facts or events giving rise to the Proceeding, I (1) acted in good faith and honestly, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.


In consideration of the advance of Expenses by the Company for reasonable attorneys' fees and related expenses incurred by me in connection with the Proceeding (the "Advanced Expenses"), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established and which have not been successfully resolved as described in Section 7 of the Indemnification Agreement. To the extent that Advanced Expenses do not relate to a specific claim, issue or matter in the Proceeding, I agree that such Expenses shall be allocated on a reasonable and proportionate basis.


IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this

day of

, 200__ .

WITNESS:


Endnotes

(SEAL)



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