Exhibit 10.7

 

PPM Loan No. 0708301

 

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered into as of
this 1st day of June, 2011 by INLAND DIVERSIFIED REAL ESTATE TRUST, INC., a
Maryland corporation, (hereinafter referred to as “Indemnitor” or “Indemnitors,”
whether one or many) in favor of and for the specific benefit of JACKSON
NATIONAL LIFE INSURANCE COMPANY, a Michigan corporation (hereinafter referred to
as the “Lender”).

 

RECITALS:

 

A.            Lender has agreed to permit Inland Diversified Charlotte Perimeter
Woods, L.L.C., (the “Borrower”), a  Delaware limited liability company in which
Indemnitor is the sole Member and Manager, to assume  a loan in the original
principal amount of FORTY-SIX MILLION, FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($46,500,000.00) (the “Loan”). The Assumption of the Loan is made pursuant to a
Loan Assumption Agreement of even date herewith between Lender and Borrower (the
“Loan Agreement”), and is evidenced by a Promissory Note (the “Note”) dated
August 27, 2008 in such amount, executed by the original borrower and payable to
the order of Lender.  The Note is secured by a Deed of Trust, Security Agreement
and Financing Statement (the “Security Instrument”) of even date with the Note
encumbering certain real and other property described therein (the “Project”),
and other security documents (the Loan Agreement, the Note, the Security
Instrument) and any and all other documents or instruments executed in
connection with or as security for the Note (sometimes hereinafter collectively
referred to as the “Loan Documents”).  Any capitalized term used herein and not
otherwise defined herein shall have the meaning ascribed to such term in the
Loan Agreement.

 

B.            As a condition to permitting Borrower to assume the Loan, Lender
has required the execution of this Agreement by the Indemnitors.

 

C.            Indemnitors own (directly or indirectly) an interest in Borrower,
and Indemnitors expect to derive substantial benefits from the making of the
Loan and therefore find it in their best interests to execute and deliver this
Agreement, and desire and specifically intend to induce Lender to make the Loan
and recognize and intend that Lender will materially rely upon these presents in
so doing.

 

NOW, THEREFORE, in consideration of the premises and of the making of the Loan
by Lender, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the Indemnitors, the
Indemnitors agree with and for the specific benefit of Lender, its successors,
participants, endorsees and assigns, as follows:

 

1.             Indemnity.  The Indemnitors and each of them, jointly and
severally, agree to and shall indemnify and defend Lender, its directors,
officers, members, shareholders, employees, agents, contractors, licensees,
invitees, successors and assigns (hereinafter collectively referred to as the
“Indemnified Parties”) against, and hold the Indemnified Parties harmless from
and reimburse the Indemnified Parties for, any and all claims, demands,
judgments, penalties,

 

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liabilities, costs, damages and expenses, directly or indirectly incurred by the
Indemnified Parties, including court costs and attorney fees (prior to trial, at
trial and on appeal), directly or indirectly caused by, resulting from or
arising out of any of the Recourse Events described in Section 9.18 of the Loan
Agreement (hereinafter collectively referred to as the “Indemnified
Obligations.”)

 

2.             Continuing Indemnifications.  The obligations of the Indemnitors
hereunder are absolute, unconditional, irrevocable, complete and continuing and
shall not be released by any action which might, but for this provision of this
Agreement, be deemed a legal or equitable discharge of a surety, guarantor or
indemnitor, other than irrevocable payment and performance in full of the
Indemnified Obligations.  No notice of the Indemnified Obligations to which this
Agreement may apply, or of any renewal or extension thereof need be given to the
Indemnitors.  The Indemnitors hereby waive (a) demand of payment, presentment,
protest, notice of dishonor, nonpayment or nonperformance of any and all of the
Indemnified Obligations; (b) notice of acceptance of this Agreement and notice
of any liability to which it may apply; (c) all other notices and demands of any
kind and description relating to the Indemnified Obligations now or hereafter
provided for by any agreement, statute, law, rule or regulation; and (d) all
defenses of Borrower and the Indemnitors pertaining to the Indemnified
Obligations except for the defense of discharge by payment or performance.  The
Indemnified Obligations shall constitute the direct and primary obligations of
the Indemnitors, and shall be joint and several.

 

3.             Other Transactions.  Lender is authorized (a) to exchange,
surrender or release, with or without consideration, any collateral and security
which may be placed with it by Borrower or by any other person, or to deliver
any such collateral and security directly to Borrower for collection and
remittance or for credit, or to collect the same in any manner without notice to
the Indemnitors; and (b) to amend, extend or supplement the Loan Documents, to
waive compliance by Borrower or any other person with the terms thereof and to
settle or compromise any of the Indemnified Obligations without notice to the
Indemnitors and without affecting the liabilities of the Indemnitors.  No
invalidity, irregularity or unenforceability of all or any part of the
Indemnified Obligations or of any security therefor or other recourse with
respect thereto shall affect, impair or be a defense to this Agreement.  The
liabilities of the Indemnitors shall not be affected by any failure, delay,
neglect or omission on the part of Lender to realize upon any of the obligations
of Borrower to Lender, or upon any collateral or security for any of the
Indemnified Obligations, nor by the taking by Lender of (or the failure to take)
any other guaranty or guaranties or indemnity or indemnities to secure the
Indemnified Obligations, nor by the taking by Lender of (or the failure to take
or the failure to perfect its security interest in or other lien on) collateral
or security of any kind.  No act or omission of Lender, whether or not such
action or failure to act varies or increases the risk of, or affects the rights
or remedies of the Indemnitors, shall affect or impair the obligations of the
Indemnitors hereunder.  This Agreement shall continue in full force and effect,
both as to the Indemnified Obligations now existing and/or hereafter created,
notwithstanding the release of or extension of time to any other guarantor or
indemnitor of the Indemnified Obligations or any part thereof.

 

4.             Actions Not Required.  The Indemnitors hereby waive any and all
right, including any right pursuant to N.C.G.S. 26-7, to cause a marshaling of
the assets of Borrower or any other action by any court or other governmental
body with respect thereto or to cause Lender to proceed against any security for
the Indemnified Obligations or any other recourse which Lender

 

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may have and waive any requirements that Lender institute any action or
proceeding at law or in equity, or obtain any judgment, against Borrower or any
other person, or with respect to any collateral security for the Indemnified
Obligations, as a condition precedent to making demand on, or bringing an action
or obtaining and/or enforcing a judgment against, the Indemnitors upon this
Agreement.  Time is of the essence with respect to the Indemnitors’ obligations
under this Agreement.  If any remedy or right hereby granted shall be found to
be unenforceable, such unenforceability shall not limit or prevent enforcement
of any other remedy or right hereby granted.

 

5.             No Subrogation.  Notwithstanding any payment or payments made by
the Indemnitors hereunder and only for so long as any portion of the Loan or
other sums remain payable to Lender under the Loan Documents, the Indemnitors
waive all rights of subrogation to any of the rights of Lender against Borrower
or any other person liable for payment or performance of any of the Indemnified
Obligations or any collateral security or guaranty or right of offset held by
Lender for payment or performance of the Indemnified Obligations, and the
Indemnitors waive all rights to seek any recourse to or contribution or
reimbursement from Borrower or any other person liable for payment or
performance of any of the Indemnified Obligations in respect of payments made by
the Indemnitors hereunder.

 

6.             Recovery of Payment.  If any payment received by Lender and
applied to the Indemnified Obligations is subsequently set aside, recovered,
rescinded or required to be returned for any reason (including, without
limitation, the bankruptcy, insolvency or reorganization of Borrower or any
other obligor), the Indemnified Obligations to which such payment was applied
shall for the purposes of this Agreement be deemed to have continued in
existence, notwithstanding such application, and this Agreement shall be
enforceable as to such Indemnified Obligations as fully as if such application
had never been made.

 

7.             Remedies.  All remedies afforded to Lender by this Agreement are
separate and cumulative remedies and no one of such remedies, whether or not
exercised by Lender, shall limit any of the other remedies available to Lender
and shall in no way limit or prejudice any other remedy which Lender may have. 
Mere delay or failure to act shall not preclude the exercise or enforcement of
any rights and remedies available to Lender.

 

8.             Bankruptcy of Borrower.  The liabilities and obligations of the
Indemnitors under this Agreement shall not be impaired or affected by the
institution by or against Borrower or any other person of any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or any other
similar proceedings for relief under any bankruptcy law or similar law for the
relief of debtors.  Any discharge of any of the Indemnified Obligations pursuant
to any such bankruptcy or similar law or other law shall not diminish, discharge
or otherwise affect in any way the obligations of the Indemnitors under this
Agreement, and upon the institution of any of the above actions, such
obligations shall be enforceable against the Indemnitors.

 

9.             Costs and Expenses.  The Indemnitors shall pay or reimburse
Lender on demand for all out-of-pocket expenses (including in each case all
reasonable attorney fees and expenses) incurred by Lender arising out or in
connection with the enforcement of this Agreement against the Indemnitors or
arising out of or in connection with any failure of the Indemnitors to fully and
timely perform the obligations of the Indemnitors hereunder.

 

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10.           Waivers and Amendments.  This Agreement can be waived, modified,
amended, terminated or discharged only explicitly in a writing signed by
Lender.  A waiver so signed shall be effective only in the specific instance and
for the specific purpose given.

 

11.           Financial Statements.  Each of the Indemnitors shall deliver to
Lender, within one-hundred twenty (120) days after the end of each calendar
year, and within twenty (20) days after Lender’s request in the event of any
Default by Borrower under any of the Loan Documents, a current financial
statement, certified as correct by such Indemnitor.  In addition, each
Indemnitor covenants and agrees to the terms and provisions of Section 3.13 of
the Loan Agreement (with respect to matters relating to Indemnitor in such
Section).  At Lender’s option, exercisable in the event of any Default by
Borrower under any of the Loan Documents, or if Lender has reason to believe
that any previously provided financial information may have been misleading or
inaccurate, such financial statements shall be, at all times thereafter, 
prepared and certified by an independent certified public accountant at
Indemnitors’ expense.

 

12.           Successors and Assigns.  The obligations of the Indemnitors
hereunder shall be joint and several.  This Agreement shall be binding upon the
Indemnitors and their respective heirs, legal representatives, successors and
assigns, and shall inure to the benefit of Lender and its successors and
assigns.

 

13.           Choice of Law.  This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of North Carolina.

 

14.           WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY LAW, INDEMNITORS
AND LENDER EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE TO ENFORCE OR
DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR RELATING
THERETO OR ARISING FROM (DIRECTLY OR INDIRECTLY) THE LENDING RELATIONSHIP WHICH
IS THE SUBJECT OF THIS AGREEMENT AND AGREE THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

15.           Jurisdiction and Venue.  With respect to any suit, action or
proceedings relating to this Agreement, the Project, or any of the other Loan
Documents (“Proceedings”) each party irrevocably (i) submits to the non
exclusive jurisdiction of the state and federal courts located in the State
where the Project is located, and (ii) waives any objection which it may have at
any time to the laying of venue of any proceedings brought in any such court,
waives any claim that such Proceedings have been brought in an inconvenient
forum and further waives the right to object, with respect to such Proceedings,
that such court does not have jurisdiction over such party.  Nothing in this
Agreement shall preclude either party from bringing Proceedings in any other
jurisdiction nor will the bringing of Proceedings in any one or more
jurisdictions preclude the bringing of Proceedings in any other jurisdiction.

 

16.           Counterparts.  This Agreement may be executed in any number of
counterparts and by different parties in separate counterparts, each of which
when so executed and delivered

 

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shall be deemed to be an original and all of such counterparts taken together
shall constitute but one and the same instrument.

 

17.           Interpretation.  This Agreement has been negotiated by parties
knowledgeable in the matters contained in this Agreement, with the advice of
counsel, is to be construed and interpreted in absolute parity, and shall not be
construed or interpreted against any party by reason of such party’s preparation
of the initial or any subsequent draft of the Loan Documents or this Agreement.

 

18.           Severability.  If any term or provision of this Agreement shall be
determined to be illegal or unenforceable, all other terms and provisions in
this Agreement shall nevertheless remain effective and shall be enforced to the
fullest extent permitted by law.

 

19.           Notices.  All notices or other written communications hereunder
shall be given in accordance with the terms of the Loan Agreement.

 

20.           Captions.  The headings of each section herein are for convenience
only and do not limit or construe the contents of any provisions of this
Agreement.

 

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IN WITNESS WHEREOF, the Indemnitors have caused this Agreement to be duly
executed as of the date and year first above written.

 

 

INDEMNITOR:

 

 

 

INLAND DIVERSIFIED REAL ESTATE TRUST, INC., Maryland corporation

 

 

 

 

 

By:  

/s/ Barry L. Lazarus

 

 

Name:

Barry L. Lazarus

 

 

Title:

President

 

 

STATE OF Illinois

COUNTY OF Lake

 

I,  Michael A. Shlau a Notary Public of Lake County and State of Illinois, do
hereby certify that Barry L. Lazarus (the “Signatory”), the President of Inland
Diversified Real Estate Trust, Inc. personally appeared before me this day and
by authority duly given, acknowledged the due execution of the foregoing
instrument.

 

I certify that the Signatory personally appeared before me this day, and (check
one of the following):

 

x           (I have personal knowledge of the identify of the Signatory); or

o            (I have seen satisfactory evidence of the Signatory’s identity, by
a current state or federal identification with the Signatory’s photograph in the
form of

(check one of the following:

 

o            a driver’s license; or

o            in the form
of                                                         ); or

o            (a credible witness has sworn to the identity of the Signatory).

 

The Signatory acknowledged to me that he/she voluntarily signed the foregoing
document for the purpose stated therein and in the capacity indicated.

 

Witness my hand and official stamp or seal this 31st day of  May, 2011.

 

 

/s/ Michael A. Shlau

 

Notary Public

 

Print Name:

Michael A. Shlau

 

My Commission Expires:

 

 

(Note:  Notary Public must sign exactly as on notary seal)

 

[AFFIX NOTARY SEAL BELOW -MUST BE FULLY LEGIBLE]

 

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