Exhibit 10.7

 

Loan No. 33-0924150

ENVIRONMENTAL INDEMNITY AGREEMENT

THIS ENVIRONMENTAL INDEMNITY AGREEMENT (this “Agreement”) made as of the 27th
day of June, 2014 by IREIT FLOWOOD DOGWOOD, L.L.C., a Delaware limited liability
company, having an office at 2901 Butterfield Road, Oak Brook, Illinois 60523
(“Borrower”) and INLAND REAL ESTATE INCOME TRUST, INC., a Maryland corporation,
having an office at 2901 Butterfield Road, Oak Brook, Illinois 60523
(“Guarantor”; Borrower and Guarantor, individually and/or collectively, as the
context may require, “Indemnitor”), in favor of WELLS FARGO BANK, NATIONAL
ASSOCIATION, having an address at Wells Fargo Center, 1901 Harrison Street, 2nd
Floor, MAC A0227-020, Oakland, California 94612 (together with its successors
and/or assigns, “Indemnitee”) and other Indemnified Parties (defined below).

RECITALS:

A. Indemnitee is prepared to make a loan (the “Loan”) to Borrower in the
principal amount of $24,351,750.00 pursuant to a Loan Agreement of even date
herewith between Borrower and Indemnitee (as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time, the “Loan
Agreement”). Capitalized terms not otherwise defined herein shall have the
meaning set forth in the Loan Agreement.

B. Indemnitee is unwilling to make the Loan unless Indemnitor agrees to provide
the indemnification, representations, warranties, covenants and other matters
described in this Agreement for the benefit of the Indemnified Parties.

C. Indemnitor is entering into this Agreement to induce Indemnitee to make the
Loan.

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AGREEMENT

NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Indemnitor hereby represents, warrants, covenants and agrees for the benefit of
the Indemnified Parties as follows:

1.               ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES. Except as
otherwise disclosed by that certain Phase I environmental report (or Phase II
environmental report, if required) in respect of the Property delivered to
Indemnitee (referred to below as the “Environmental Report”), a copy of which
has been provided to Indemnitee, (a) there are no Hazardous Substances (defined
below) or underground storage tanks in, on, or under the Property, except those
that are both (i) in compliance with all Environmental Laws (defined below) and
with permits issued pursuant thereto and (ii) fully disclosed to Indemnitee in
writing pursuant to the Environmental Report; (b) to the best of Indemnitor’s
knowledge, there are no past, present or threatened Releases (defined below) of
Hazardous Substances in, on, under or from the Property which have not been
fully remediated in accordance with Environmental Law; (c) to the best of
Indemnitor’s knowledge, there is no threat of any Release of Hazardous
Substances migrating to the Property; (d) to the best of Indemnitor’s knowledge,
there is no past or present non-compliance with Environmental Laws, or with
permits issued pursuant thereto, in connection with the Property which has not
been fully remediated in accordance with Environmental Law; (e) Indemnitor does
not know of, and has not received, any written or oral notice or other
communication from any Person (including but not limited to a governmental
entity) relating to Hazardous Substances or Remediation (defined below) thereof,
of possible liability of any Person pursuant to any Environmental Law, other
environmental conditions in connection with the Property, or any actual or
potential administrative or judicial proceedings in connection with any of the
foregoing; (f) Indemnitor has truthfully and fully provided to Indemnitee, in
writing, any and all information that has been requested by Lender relating to
conditions in, on, under or from the Property that is known to Indemnitor and
that is contained in files and records of Indemnitor, including but not limited
to any reports relating to Hazardous Substances in, on, under or from the
Property and/or to the environmental condition of the Property; (g) the Property
currently displays no evidence of water infiltration or water damage (h) to the
best of Indemnitor’s knowledge, there are no prior or current complaints by
tenants at the Property regarding water infiltration or water damage or leaks or
odors related thereto, and (i) the Property currently displays no conspicuous
evidence of the growth of Microbial Matter.

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2.               ENVIRONMENTAL COVENANTS. Indemnitor covenants and agrees that:
(a) all uses and operations on or of the Property, whether by Indemnitor or any
other Person, shall be in compliance with all Environmental Laws and permits
issued pursuant thereto; (b) there shall be no Releases of Hazardous Substances
in, on, under or from the Property; (c) there shall be no Hazardous Substances
in, on, or under the Property, except those that are both (i) in compliance with
all Environmental Laws and with permits issued pursuant thereto and (ii) in
de-minimis amounts necessary to operate the Property for the purposes set forth
in the Loan Agreement which will not result in an environmental condition in, on
or under the Property and which are otherwise permitted under and used in
compliance with Environmental Laws; (d) subject to a right to contest under
applicable environmental law, provided any such contest stays any enforcement
proceeding by the applicable authority, Indemnitor shall keep the Property free
and clear of all liens and other encumbrances imposed pursuant to any
Environmental Law, whether due to any act or omission of Indemnitor or any other
Person (the “Environmental Liens”); (e) Indemnitor shall, at its sole cost and
expense, fully and expeditiously cooperate in all activities pursuant to
Paragraph 3 of this Agreement, including but not limited to providing all
relevant information and making knowledgeable Persons available for interviews;
(f) Indemnitor shall, at its sole cost and expense, comply with all reasonable
written requests of Indemnitee made in the event that Indemnitee has a good
faith reason to believe based on credible evidence or information that an
environmental hazard exists on or affects the Property to (i) reasonably
effectuate Remediation of any condition (including but not limited to a Release
of a Hazardous Substance) in, on, under or from the Property; (ii) comply with
any Environmental Law; (iii) comply with any directive from any governmental
authority; and (iv) take any other reasonable action necessary or appropriate
for protection of human health or the environment; (g) Indemnitor shall not do
or allow any tenant or other user of the Property to do any act that materially
increases the dangers to human health or the environment, poses an unreasonable
risk of harm to any Person (whether on or off the Property), impairs or may
impair the value of the Property, is contrary to any requirement of any insurer,
involves Hazardous Substances or an environmental condition and constitutes a
public or private nuisance, involves Hazardous Substances or an environmental
condition and constitutes waste, or involves Hazardous Substances or an
environmental condition and constitutes and violates any covenant, condition,
agreement or easement applicable to the Property; (h) Indemnitor shall
immediately notify Indemnitee in writing of (A) any presence or Releases or
threatened Releases of Hazardous Substances in, on, under, from or migrating
towards the Property; (B) any non-compliance with any Environmental Laws related
in any way to the Property; (C) any actual or potential Environmental Lien; (D)
any required or proposed Remediation of environmental conditions relating to the
Property; and (E) any written or oral notice or other communication of which any
Indemnitor becomes aware from any source whatsoever (including but not limited
to a governmental entity) relating in any way to Hazardous Substances or
Remediation thereof, possible liability of any Person pursuant to any
Environmental Law, other environmental conditions in connection with the
Property, or any actual or potential administrative or judicial proceedings in
connection with anything referred to in this Agreement; (i) upon reasonable
written request by Indemnitee, Borrower shall engage an engineering consultant
reasonably acceptable to Indemnitee to conduct (and such consultant shall
conduct) an inspection for water

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damage, which inspection shall occur not more than once each calendar year
during the term of the Loan unless Lender has good faith reason to believe based
on credible evidence or information that water damage may then exist on the
Property; (j) upon reasonable written request by Indemnitee, Borrower shall
engage an environmental consultant reasonably acceptable to Indemnitee to
conduct (and such consultant shall conduct) an inspection for evidence of the
growth of Microbial Matter, which inspections shall occur not more than once
each calendar year during the term of the Loan unless Lender has good faith
reason to believe based on credible evidence or information that Microbial
Matter may then exist on the Property; (k) Borrower shall immediately adopt a
remediation plan reasonably acceptable to Indemnitee with respect to any water
damage or Microbial Matter identified as a result of such yearly environmental
and engineering inspections; (l) Borrower shall undertake any course of action
recommended by the Environmental Protection Agency to prevent the growth of
Microbial Matter; and (m) Borrower shall comply with any and all local, state or
federal laws, legislation, guidelines or statutes at any time in effect with
respect to Microbial Matter.

3.               INDEMNIFIED RIGHTS/COOPERATION AND ACCESS. In the event the
Indemnified Parties have good faith reason to believe based on credible evidence
or information that an environmental hazard exists on the Property that does
not, in the sole discretion of the Indemnified Parties, endanger any tenants or
other occupants of the Property or their guests or the general public or
materially and adversely affects the value of the Property, upon reasonable
notice from the Indemnitee, Indemnitor shall, at Indemnitor’s sole cost and
expense, promptly cause an engineer or consultant reasonably satisfactory to the
Indemnified Parties to conduct any environmental assessment or audit (the scope
of which shall be determined in the sole and absolute discretion of the
Indemnified Parties) and take any samples of soil, groundwater or other water,
air, or building materials or any other invasive testing reasonably requested by
Indemnitee and promptly deliver the results of any such assessment, audit,
sampling or other testing (and Indemnitee and the other Indemnified Parties
shall be entitled to rely on such reports and other results thereof); provided,
however, if such results are not delivered to the Indemnified Parties within a
reasonable period or if the Indemnified Parties have reason to believe that an
environmental hazard exists on the Property that, in the sole judgment of the
Indemnified Parties, endangers any tenant or other occupant of the Property or
their guests or the general public or may materially and adversely affect the
value of the Property, upon reasonable notice to Indemnitor, the Indemnified
Parties and any other Person designated by the Indemnified Parties, including
but not limited to any receiver, any representative of a governmental entity,
and any environmental consultant, shall have the right, but not the obligation,
to enter upon the Property at all reasonable times to assess any and all aspects
of the environmental condition of the Property and its use, including but not
limited to conducting any environmental assessment or audit (the scope of which
shall be determined in the sole and absolute discretion of the Indemnified
Parties) and taking samples of soil, groundwater or other water, air, or
building materials, and reasonably conducting other invasive testing. Indemnitor
shall cooperate with and provide the Indemnified Parties and any such Person
designated by the Indemnified Parties with access to the Property.

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4.               INDEMNIFICATION. Indemnitor covenants and agrees, at its sole
cost and expense, to protect, defend, indemnify, release and hold the
Indemnified Parties harmless from and against any and all Losses (defined below)
imposed upon or incurred by or asserted against any Indemnified Parties and
directly or indirectly arising out of or in any way relating to any one or more
of the following: (a) any presence of any Hazardous Substances in, on, above, or
under the Property; (b) any past, present or threatened Release of Hazardous
Substances in, on, above, under or from the Property; (c) any activity by
Indemnitor, any Person affiliated with Indemnitor, and any tenant or other user
of the Property in connection with any actual, proposed or threatened use,
treatment, storage, holding, existence, disposition or other Release,
generation, production, manufacturing, processing, refining, control,
management, abatement, removal, handling, transfer or transportation to or from
the Property of any Hazardous Substances at any time located in, under, on or
above the Property; (d) any activity by Indemnitor, any Person affiliated with
Indemnitor, and any tenant or other user of the Property in connection with any
actual or proposed Remediation of any Hazardous Substances at any time located
in, under, on or above the Property, whether or not such Remediation is
voluntary or pursuant to court or administrative order, including but not
limited to any removal, remedial or corrective action; (e) any past, present or
threatened non-compliance or violations of any Environmental Laws (or permits
issued pursuant to any Environmental Law) in connection with the Property or
operations thereon, including but not limited to any failure by Indemnitor, any
Person affiliated with Indemnitor, and any tenant or other user of the Property
to comply with any order of any governmental authority in connection with any
Environmental Laws; (f) the imposition, recording or filing or the threatened
imposition, recording or filing of any Environmental Lien encumbering the
Property; (g) any administrative processes or proceedings or judicial
proceedings in any way connected with any matter addressed in this Agreement;
(h) any past, present or threatened injury to, destruction of or loss of natural
resources in any way connected with the Property caused by Hazardous Substances
or any violation of Environmental Law, including, but not limited to, costs to
investigate and assess such injury, destruction or loss; (i) any acts of
Indemnitor, any Person affiliated with Indemnitor, and any tenant or other user
of the Property in arranging for disposal or treatment, or arranging with a
transporter for transport for disposal or treatment, of Hazardous Substances at
any facility or incineration vessel containing such or similar Hazardous
Substances; (j) any acts of Indemnitor, any Person affiliated with any
Indemnitor, and any tenant or other user of the Property in accepting any
Hazardous Substances for transport to disposal or treatment facilities,
incineration vessels or sites from which there is a Release, or a threatened
Release of any Hazardous Substance which causes the incurrence of costs for
Remediation; (k) any personal injury, wrongful death, or property or other
damage arising under any statutory or common law or tort law theory, including
but not limited to damages assessed for private or public nuisance or for the
conducting of an abnormally dangerous activity on or near the Property that are
caused by Hazardous Substances or any violation of Environmental Law; and (l)
any misrepresentation or inaccuracy in any representation or warranty or
material breach or failure to perform any covenants or other obligations
relating to Hazardous Substances and/or Environmental Law pursuant to this
Agreement, the Loan Agreement or the Security Instrument.

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5.               DUTY TO DEFEND AND ATTORNEYS AND OTHER FEES AND EXPENSES. Upon
written request by any Indemnified Party, Indemnitor shall defend same (if
requested by any Indemnified Party, in the name of the Indemnified Party) by
attorneys and other professionals reasonably approved by the Indemnified
Parties. Notwithstanding the foregoing, any Indemnified Parties may, in their
sole and absolute discretion, engage their own attorneys and other professionals
to defend or assist them, and, at the option of Indemnified Parties, their
attorneys shall control the resolution of any claim or proceeding, providing
that no compromise or settlement shall be entered without Indemnitor’s consent,
which consent shall not be unreasonably withheld. Upon demand, Indemnitor shall
pay or, in the sole and absolute discretion of the Indemnified Parties,
reimburse, the Indemnified Parties for the payment of reasonable fees and
disbursements of attorneys, engineers, environmental consultants, laboratories
and other professionals in connection therewith.

6.               DEFINITIONS. As used in this Agreement, the following terms
shall have the following meanings: The term “Environmental Law” means any
present and future federal, state and local laws, statutes, ordinances, rules,
regulations and the like, as well as common law, relating to protection of human
health or the environment, relating to Hazardous Substances, relating to
liability for or costs of other actual or threatened danger to human health or
the environment. The term “Environmental Law” includes, but is not limited to,
the following statutes, as amended, any successor thereto, and any regulations
promulgated pursuant thereto, and any state or local statutes, ordinances,
rules, regulations and the like addressing similar issues: the Comprehensive
Environmental Response, Compensation and Liability Act; the Emergency Planning
and Community Right-to-Know Act; the Hazardous Materials Transportation Act; the
Resource Conservation and Recovery Act (including but not limited to Subtitle I
relating to underground storage tanks); the Solid Waste Disposal Act; the Clean
Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe
Drinking Water Act; the Occupational Safety and Health Act; the Federal Water
Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide Act;
the Endangered Species Act; the National Environmental Policy Act; and the River
and Harbors Appropriation Act. The term “Environmental Law” also includes, but
is not limited to, any present and future federal, state and local laws,
statutes, ordinances, rules, regulations and the like, as well as common law:
conditioning transfer of property upon a negative declaration or other approval
of a governmental authority of the environmental condition of the Property;
requiring notification or disclosure of Releases of Hazardous Substances or
other environmental condition of the Property to any Governmental Authority or
other Person, whether or not in connection with transfer of title to or interest
in property; imposing conditions or requirements in connection with permits or
other authorization for lawful activity; relating to nuisance, trespass or other
causes of action related to the environmental conditions of the Property; and
relating to wrongful death, personal injury, or property or other damage in
connection with any environmental condition or use or presence of Hazardous
Substances on or at the Property.

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The term “Hazardous Substances” includes but is not limited to any and all
substances (whether solid, liquid or gas) defined, listed, or otherwise
classified as pollutants, hazardous wastes, hazardous substances, hazardous
materials, extremely hazardous wastes, or words of similar meaning or regulatory
effect under any present or future Environmental Laws or that may have a
negative impact on human health or the environment, including but not limited to
Microbial Matter, petroleum and petroleum products, asbestos and
asbestos-containing materials, polychlorinated biphenyls, lead, radon,
radioactive materials, flammables and explosives. The foregoing shall be deemed
to exclude substances of kinds and in amounts ordinarily and customarily used or
stored in similar properties for the purposes of cleaning or other maintenance
or operations, provided the same (i) have been and continue to be in compliance
with all Environmental Laws, (ii) have not and do not result in contamination of
the Property and (iii) have not had and do not otherwise have a Material Adverse
Effect.

The term “Indemnified Parties” includes Indemnitee, any Person who is or will
have been involved in the origination of the Loan, any Person who is or will
have been involved with the servicing of the Loan, any Person in whose name the
encumbrance created by the Security Instrument is or will have been recorded,
Persons who may hold or acquire or will have held a full or partial interest in
the Loan (including, but not limited to, investors or prospective investors in
connection with a Secondary Market Transaction), as well as custodians, trustees
and other fiduciaries who hold or have held a full or partial interest in the
Loan for the benefit of third parties) as well as the respective directors,
officers, shareholders, partners, employees, agents, servants, representatives,
contractors, subcontractors, affiliates, subsidiaries, participants, successors
and assigns of any and all of the foregoing (including but not limited to any
other Person who holds or acquires or will have held a participation or other
full or partial interest in the Loan or the Property, whether during the term of
the Loan or as a part of or following a foreclosure of the Loan and including,
but not limited to, any successors by merger, consolidation or acquisition of
all or a substantial portion of Indemnitee’s assets and business).

The term “Legal Action” means any claim, suit or proceeding, whether
administrative or judicial in nature.

The term “Losses” includes any losses, damages, costs, fees, expenses, claims,
suits, judgments, awards, liabilities (including but not limited to strict
liabilities), obligations, debts, diminutions in value, fines, penalties,
charges, costs of Remediation (whether or not performed voluntarily), amounts
paid in settlement, foreseeable and unforeseeable consequential damages,
litigation costs, reasonable attorneys’ fees, engineers’ fees, environmental
consultants’ fees, and investigation costs (including but not limited to costs
for sampling, testing and analysis of soil, water, air, building materials, and
other materials and substances whether solid, liquid or gas), of whatever kind
or nature, and whether or not incurred in connection with any judicial or
administrative proceedings, actions, claims, suits, judgments or awards.

The term “Microbial Matter” means fungi or bacterial matter which reproduces
through the release of spores or the splitting of cells, including, but not
limited to, mold, mildew, and viruses, whether or not such Microbial Matter is
living.

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The term “Release” with respect to any Hazardous Substance includes but is not
limited to any release, deposit, discharge, emission, leaking, leaching,
spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping,
dumping, disposing or other movement of Hazardous Substances.

The term “Remediation” includes, but is not limited to, any response, remedial,
removal, or corrective action; any activity to clean up, detoxify,
decontaminate, contain or otherwise remediate any Hazardous Substance; any
actions to prevent, cure or mitigate any Release of any Hazardous Substance; any
action to comply with any Environmental Laws or with any permits issued pursuant
thereto; and any inspection, investigation, study, monitoring, assessment,
audit, sampling and testing, laboratory or other analysis, or evaluation
relating to any Hazardous Substances or to anything referred to herein.

7.               OPERATIONS AND MAINTENANCE PROGRAMS. If recommended by the
Environmental Report or any other assessment or audit of the Property
(including, without limitation, any assessment or audit performed after the date
hereof), Indemnitor shall implement and comply with an operations and
maintenance program with respect to the Property, in form and substance
reasonably acceptable to Indemnitee, prepared by an environmental consultant
reasonably acceptable to Indemnitee, which program shall address any
asbestos-containing material, lead based paint, mold and/or other applicable
conditions that may now or in the future be detected at or on the Property.
Without limiting the generality of the preceding sentence, with respect to such
operations and maintenance programs, Indemnitee may require (a) periodic notices
or reports to Indemnitee in form, substance and at such intervals as Indemnitee
may reasonably specify, (b) an amendment to such operations and maintenance
program to address changing circumstances, laws or other matters and (c) at
Indemnitor’s sole cost and expense, supplemental examination of the Property by
consultants specified by Indemnitee. Indemnitor’s failure to comply with the
foregoing provisions of this Section 7 within thirty (30) days of notice from
Indemnitee shall, at Indemnitee’s option, constitute an Event of Default.

8.               UNIMPAIRED LIABILITY. The liability of Indemnitor under this
Agreement shall in no way be limited or impaired by, and Indemnitor hereby
consents to and agrees to be bound by, any amendment or modification of the
provisions of the Note, the Loan Agreement, the Security Instrument or any other
Loan Document to or with Indemnitee by Indemnitor or any Person who succeeds
Indemnitor or any Person as owner of the Property. In addition, the liability of
Indemnitor under this Agreement shall in no way be limited or impaired by (i)
any extensions of time for performance required by the Note, the Loan Agreement,
the Security Instrument or any of the other Loan Documents, (ii) any sale or
transfer of all or part of the Property, (iii) except as provided herein, any
exculpatory provision in the Note, the Loan Agreement, the Security Instrument,
or any of the other Loan Documents limiting Indemnitee’s recourse to the
Property or to any other security for the Note, or limiting Indemnitee’s rights
to a deficiency judgment against Indemnitor, (iv) the accuracy or inaccuracy of
the representations and warranties made by Indemnitor under the Note, the Loan
Agreement, the Security Instrument or any of the other Loan Documents or herein,
(v) the release of Indemnitor or any other Person from performance or observance
of any of the agreements, covenants, terms or conditions contained in any of the
other Loan Documents by operation of law, Indemnitee’s

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voluntary act, or otherwise, (vi) the release or substitution in whole or in
part of any security for the Note, or (vii) Indemnitee’s failure to record the
Security Instrument or file any UCC financing statements (or Indemnitee’s
improper recording or filing of any thereof) or to otherwise perfect, protect,
secure or insure any security interest or lien given as security for the Note;
and, in any such case, whether with or without notice to Indemnitor and with or
without consideration.

9.               ENFORCEMENT. Indemnified Parties may enforce the obligations of
Indemnitor without first resorting to or exhausting any security or collateral
or without first having recourse to the Note, the Loan Agreement, the Security
Instrument, or any other Loan Documents or any of the Property, through
foreclosure proceedings or otherwise, provided, however, that nothing herein
shall inhibit or prevent Indemnitee from suing on the Note, foreclosing, or
exercising any power of sale under, the Security Instrument, or exercising any
other rights and remedies thereunder. This Agreement is not collateral or
security for the debt of Indemnitor pursuant to the Loan, unless Indemnitee
expressly elects in writing to make this Agreement additional collateral or
security for the debt of Indemnitor pursuant to the Loan, which Indemnitee is
entitled to do in its sole and absolute discretion. It is not necessary for an
Event of Default to have occurred pursuant to and as defined in the Security
Instrument or the Loan Agreement for the Indemnified Parties to exercise their
rights pursuant to this Agreement. Notwithstanding any provision of the Loan
Agreement, the obligations pursuant to this Agreement are exceptions to any
non-recourse or exculpation provision of the Loan Agreement; Indemnitor is fully
and personally liable for such obligations, and such liability is not limited to
the original or amortized principal balance of the Loan or the value of the
Property.

10.            SURVIVAL. The obligations and liabilities of Indemnitor under
this Agreement shall fully survive indefinitely notwithstanding any termination,
satisfaction, assignment, entry of a judgment of foreclosure, exercise of any
power of sale, or delivery of a deed in lieu of foreclosure of the Security
Instrument. Notwithstanding the provisions of this Agreement to the contrary,
the liabilities and obligations of Indemnitor hereunder shall not apply to the
extent that Indemnitor can prove that such liabilities and obligations arose
solely from Hazardous Substances that: (a) were not present on or a threat to
the Property prior to the date that Indemnitee or its nominee acquired title to
the Property, whether by foreclosure, exercise of power of sale or otherwise and
(b) were not the result of any act or negligence of Indemnitor or any of
Indemnitor’s affiliates, agents or contractors. Additionally, the obligations
and liabilities of Indemnitor under this Agreement shall terminate and be of no
further force and effect with respect to any unasserted claim when all of the
following conditions are satisfied in full: (i) the Loan shall have been paid in
full on or prior to the Maturity Date and Indemnitee has not foreclosed or
otherwise taken possession of any Property, (ii) there has been no material
change, between the date hereof and the date the Loan is paid in full, in any
Environmental Law, the effect of which change would make a lender or mortgagee
liable in respect to any matter for which the Indemnified Parties are entitled
to indemnification pursuant to this Agreement, notwithstanding the fact that the
Loan is paid in full, (iii) Indemnitee shall have received, at Indemnitor's
expense, an updated environmental report dated within sixty (60) days of the
requested release showing, to the reasonable satisfaction of Indemnitee, that
there exists no matter for which the Indemnified Parties are entitled to
indemnification pursuant to this Agreement, and (iv) two (2) years have passed
since date that the Loan has been paid in full.

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11.            INTEREST. Any amounts payable to any Indemnified Parties under
this Agreement shall become immediately due and payable on demand and, if not
paid within thirty (30) days of such demand therefor, shall bear interest at the
lesser of (a) the Default Rate or (b) the maximum interest rate which Indemnitor
may by law pay or the Indemnified Parties may charge and collect, from the date
payment was due, provided that the foregoing shall be subject to the provisions
of Article 4 of the Note.

12.            WAIVERS. \l 2(a) Except to the extent expressly prohibited by
applicable law, Indemnitor hereby waives (i) any right or claim of right to
cause a marshaling of Indemnitor’s assets or to cause Indemnitee or other
Indemnified Parties to proceed against any of the security for the Loan before
proceeding under this Agreement against Indemnitor; (ii) and relinquishes all
rights and remedies accorded by applicable law to indemnitors or guarantors,
except any rights of subrogation which Indemnitor may have, provided that the
indemnity provided for hereunder shall neither be contingent upon the existence
of any such rights of subrogation nor subject to any claims or defenses
whatsoever which may be asserted in connection with the enforcement or attempted
enforcement of such subrogation rights including, without limitation, any claim
that such subrogation rights were abrogated by any acts of Indemnitee or other
Indemnified Parties; (iii) the right to assert a counterclaim, other than a
mandatory or compulsory counterclaim, in any action or proceeding brought
against or by Indemnitee or other Indemnified Parties; (iv) notice of acceptance
hereof and of any action taken or omitted in reliance hereon; (v) presentment
for payment, demand of payment, protest or notice of nonpayment or failure to
perform or observe, or other proof, or notice or demand; and (vi) all homestead
exemption rights against the obligations hereunder and the benefits of any
statutes of limitations or repose. Notwithstanding anything to the contrary
contained herein, Indemnitor hereby agrees to postpone the exercise of any
rights of subrogation with respect to any collateral securing the Loan until the
Loan shall have been paid in full.

(b)            INDEMNITOR AND INDEMNITEE HEREBY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR
INDIRECTLY TO THE LOAN EVIDENCED BY THE NOTE, THE APPLICATION FOR THE LOAN
EVIDENCED BY THE NOTE, THE SECURITY INSTRUMENT, THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR ANY ACTS OR OMISSIONS OF ANY INDEMNIFIED PARTIES IN CONNECTION
THEREWITH.

13.            SUBROGATION. Indemnitor shall take any and all reasonable
actions, including institution of legal action against third parties, necessary
or appropriate to obtain reimbursement, payment or compensation from such
Persons responsible for the presence of any Hazardous Substances at, in, on,
under or near the Property or otherwise obligated by law to bear the cost.
Indemnified Parties shall be and hereby are subrogated to all of Indemnitor’s
rights now or hereafter in such claims.

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14.            INDEMNITOR’S REPRESENTATIONS AND WARRANTIES. Indemnitor
represents and warrants that:

(a)             it has the full power and authority to execute and deliver this
Agreement and to perform its obligations hereunder; the execution, delivery and
performance of this Agreement by Indemnitor has been duly and validly
authorized; and all requisite action has been taken by Indemnitor to make this
Agreement valid and binding upon Indemnitor, enforceable in accordance with its
terms;

(b)            its execution of, and compliance with, this Agreement is in the
ordinary course of business of Indemnitor and will not result in the breach of
any term or provision of the charter, by-laws, partnership or trust agreement,
or other governing instrument of Indemnitor or result in the breach of any term
or provision of, or conflict with or constitute a default under, or result in
the acceleration of any obligation under, any agreement, indenture or loan or
credit agreement or other instrument to which Indemnitor or the Property is
subject, or result in the violation of any law, rule, regulation, order,
judgment or decree to which Indemnitor or the Property is subject;

(c)             to the best of Indemnitor’s knowledge, there is no action, suit,
proceeding or investigation pending or threatened against it which, either in
any one instance or in the aggregate, may result in any material adverse change
in the business, operations, financial condition, properties or assets of
Indemnitor, or in any material impairment of the right or ability of Indemnitor
to carry on its business substantially as now conducted, or in any material
liability on the part of Indemnitor, or which would draw into question the
validity of this Agreement or of any action taken or to be taken in connection
with the obligations of Indemnitor contemplated herein, or which would be likely
to impair materially the ability of Indemnitor to perform under the terms of
this Agreement;

(d)            it does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant contained in this
Agreement;

(e)             to the best of Indemnitor’s knowledge, no approval,
authorization, order, license or consent of, or registration or filing with, any
governmental authority or other person, and no approval, authorization or
consent of any other party is required in connection with this Agreement; and

(f)             this Agreement constitutes a valid, legal and binding obligation
of Indemnitor, enforceable against it in accordance with the terms hereof.

15.            NO WAIVER. No delay by any Indemnified Party in exercising any
right, power or privilege under this Agreement shall operate as a waiver of any
such privilege, power or right.

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16.            NOTICE OF LEGAL ACTIONS. Each party hereto shall, within
five (5) business days of receipt thereof, give written notice to the other
party hereto of (i) any notice, advice or other communication from any
governmental entity or any source whatsoever with respect to Hazardous
Substances on, from or affecting the Property, and (ii) any legal action brought
against such party or related to the Property, with respect to which Indemnitor
may have liability under this Agreement. Such notice shall comply with the
provisions of Section 20 hereof.

17.            EXAMINATION OF BOOKS AND RECORDS. At reasonable times and upon
reasonable notice, the Indemnified Parties and their accountants shall have the
right to examine the records, books, management and other papers of Indemnitor
which reflect upon its financial condition, at the Property or at the office
regularly maintained by Indemnitor where the books and records are located. The
Indemnified Parties and their accountants shall have the right to make copies
and extracts from the foregoing records and other papers. In addition, at
reasonable times and upon reasonable notice, the Indemnified Parties and their
accountants shall have the right, at the sole cost and expense of the
Indemnified Parties unless an Event of Default then exists or unless such
examination reveals a material inaccuracy in the financial condition of
Indemnitor from that reported to Lender pursuant to the requirements set forth
in the Loan Documents, to examine and audit the books and records of Indemnitor
pertaining to the income, expenses and operation of the Property during
reasonable business hours at the office of Indemnitor where the books and
records are located.

18.            SECONDARY MARKET TRANSACTIONS. Article 11 of the Loan Agreement
is hereby incorporated by reference as if fully set forth herein. Indemnitor
hereby agrees to cooperate in fulfilling any obligation of Borrower under
Article 11 of the Loan Agreement.

19.            TAXES. Indemnitor has filed all federal, state, county,
municipal, and city income and other tax returns required to have been filed by
it and has paid all taxes and related liabilities which have become due pursuant
to such returns or pursuant to any assessments received by it. Indemnitor has no
knowledge of any basis for any additional assessment in respect of any such
taxes and related liabilities for prior years.

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20.            NOTICES. All notices or other written communications hereunder
shall be made in accordance with Article 14 of the Loan Agreement. Notices to
Guarantor shall be addressed as follows:

 

Inland Real Estate Income Trust, Inc.
2901 Butterfield Road
Oak Brook, IL 60523
Attention: President

Facsimile No.: (630) 645-3783

    With a copy to: The Inland Real Estate Group, Inc./Law Department.
2901 Butterfield Road
Oak Brook, IL  60523
Attention:  General Counsel
Facsimile No.:  (630) 218-4900    

21.            DUPLICATE ORIGINALS; COUNTERPARTS. This Agreement may be executed
in any number of duplicate originals and each duplicate original shall be deemed
to be an original. This Agreement may be executed in several counterparts, each
of which counterparts shall be deemed an original instrument and all of which
together shall constitute a single Agreement. The failure of any party hereto to
execute this Agreement, or any counterpart hereof, shall not relieve the other
signatories from their obligations hereunder.

22.            NO ORAL CHANGE. This Agreement, and any provisions hereof, may
not be modified, amended, waived, extended, changed, discharged or terminated
orally or by any act or failure to act on the part of Indemnitor or any
Indemnified Party, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.

23.            HEADINGS, ETC. The headings and captions of various paragraphs of
this Agreement are for convenience of reference only and are not to be construed
as defining or limiting, in any way, the scope or intent of the provisions
hereof.

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24.            NUMBER AND GENDER/SUCCESSORS AND ASSIGNS. All pronouns and any
variations thereof shall be deemed to refer to the masculine, feminine, neuter,
singular or plural as the identity of the Person or Persons referred to may
require. Without limiting the effect of specific references in any provision of
this Agreement, the term “Indemnitor” shall be deemed to refer to each and every
Person comprising an Indemnitor from time to time, as the sense of a particular
provision may require, and to include the heirs, executors, administrators,
legal representatives, successors and assigns of Indemnitor, all of whom shall
be bound by the provisions of this Agreement, provided that no obligation of
Indemnitor may be assigned except with the written consent of Indemnitee. Each
reference herein to Indemnitee shall be deemed to include its successors and
assigns. This Agreement shall inure to the benefit of Indemnified Parties and
their respective successors and assigns forever.

25.            RELEASE OF LIABILITY. Any one or more parties liable upon or in
respect of this Agreement may be released without affecting the liability of any
party not so released.

26.            RIGHTS CUMULATIVE. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies which Indemnitee has
under the Note, the Security Instrument, the Loan Agreement or the other Loan
Documents or would otherwise have at law or in equity.

27.            INAPPLICABLE PROVISIONS. If any term, condition or covenant of
this Agreement shall be held to be invalid, illegal or unenforceable in any
respect, this Agreement shall be construed without such provision.

28.            GOVERNING LAW. This Agreement shall be governed, construed,
applied and enforced in accordance with the Applicable Laws of the State where
the Property is located and Applicable Laws of the United States of America.

29.            MISCELLANEOUS. \l 2(a) Wherever pursuant to this Agreement (i)
Indemnitee exercises any right given to it to approve or disapprove, (ii) any
arrangement or term is to be satisfactory to Indemnitee, or (iii) any other
decision or determination is to be made by Indemnitee, the decision of
Indemnitee to approve or disapprove, all decisions that arrangements or terms
are satisfactory or not satisfactory and all other decisions and determinations
made by Indemnitee, shall be in the sole and absolute discretion of Indemnitee
and shall be final and conclusive, except as may be otherwise expressly and
specifically provided herein.

(b)            Wherever pursuant to this Agreement it is provided that
Indemnitor pay any costs and expenses, such costs and expenses shall include,
but not be limited to, reasonable third party out-of-pocket legal fees and
disbursements of Indemnitee.

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(c)             Joint and Several Liability. If Indemnitor consists of more than
one person or party, the obligations and liabilities of each such person or
party hereunder shall be joint and several.

30.            Intentionally Omitted.

 

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IN WITNESS WHEREOF, this Environmental Indemnity Agreement has been executed by
Indemnitor and is effective as of the day and year first above written.

  INDEMNITOR:        

IREIT FLOWOOD DOGWOOD, L.L.C., a

Delaware limited liability company

        By:

Inland Real Estate Income Trust, Inc., a

Maryland corporation, its sole member

        By: /s/ David Z. Lichterman   Name: David Z. Lichterman   Title: Vice
President, Treasurer & CAO        

INLAND REAL ESTATE INCOME TRUST, INC., a

Maryland corporation

        By: /s/ David Z. Lichterman   Name: David Z. Lichterman   Title: Vice
President, Treasurer & CAO

 

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