EXHIBIT 10.2.1

 

MASTER MANAGEMENT AGREEMENT

 

THIS MASTER MANAGEMENT AGREEMENT (this “Agreement”), dated as of August 31,
2005, is entered into by and between INLAND AMERICAN REAL ESTATE TRUST, INC., a
Maryland corporation (the “Company”), and INLAND AMERICAN RETAIL MANAGEMENT LLC,
a Delaware limited liability company (the “Property Manager”).

 

WITNESSETH:

 

WHEREAS, the Company intends to operate as a “real estate investment trust” (a
“REIT”), as defined in Sections 856 through 860 of the Internal Revenue Code of
1986, as amended (the “Code”), for federal and state income tax purposes and
expects to make investments in real estate assets of the type permitted to be
made by REITs under the Code and otherwise in accordance with the Articles of
Incorporation and Bylaws of the Company (such investments being referred to
herein collectively as the “Properties” and individually as a “Property”); and

 

WHEREAS, the Company desires to have the Property Manager manage certain
Properties, and the Property Manager is willing to manage those Properties, on
the terms and conditions herein set forth.

 

NOW THEREFORE, in consideration of the mutual covenants and conditions herein
set forth, the parties hereto agree as follows:

 

1.             EFFECTIVE DATE.  EFFECTIVE AS OF AUGUST 31, 2005, THE COMPANY
HEREBY RETAINS THE PROPERTY MANAGER TO MANAGE CERTAIN RETAIL AND OTHER
PROPERTIES LOCATED IN THE UNITED STATES AND CANADA (COLLECTIVELY, THE
“TERRITORY”).  THIS AGREEMENT IS NOT AN EXCLUSIVE MANAGEMENT AGREEMENT AND THE
PROPERTY MANAGER ACKNOWLEDGES AND AGREES THAT THE COMPANY MAY ENGAGE OTHER
MANAGEMENT COMPANIES TO MANAGE PROPERTIES WITHIN THE TERRITORY.

 

2.             TERMS AND CONDITIONS.

 

(A)           THE ENGAGEMENT OF THE PROPERTY MANAGER BY THE COMPANY FOR ANY
PROPERTY SHALL BE PURSUANT TO THE TERMS AND CONDITIONS OF A SEPARATE MANAGEMENT
AGREEMENT IN SUBSTANTIALLY THE FORM ATTACHED HERETO AS EXHIBIT A (THE
“MANAGEMENT AGREEMENT”).  THE INITIAL TERM OF EACH MANAGEMENT AGREEMENT SHALL
COMMENCE ON THE DATE OF ACQUISITION BY THE COMPANY OF THE PROPERTY, IF THE
PROPERTY WILL BE MANAGED BY THE PROPERTY MANAGER, AND SHALL END DECEMBER 31 OF
THE YEAR IN WHICH THE PROPERTY WAS ACQUIRED, WITH THREE SUCCESSIVE ONE-YEAR
RENEWAL PERIODS OCCURRING IMMEDIATELY AFTER THIS INITIAL TERM UNLESS EITHER
PARTY TO THE MANAGEMENT AGREEMENT NOTIFIES THE OTHER PARTY IN WRITING OF ITS
INTENT TO TERMINATE BETWEEN SIXTY (60) AND NINETY (90) DAYS PRIOR TO THE
EXPIRATION OF THE INITIAL OR RENEWAL TERM.  NOTWITHSTANDING THE FOREGOING, THE
PARTIES MAY MUTUALLY AGREE TO VARY THE TERMS OF THE MANAGEMENT AGREEMENT FOR ANY
OR ALL OF THE PROPERTIES OR TO NOT ENTER INTO A WRITTEN MANAGEMENT AGREEMENT FOR
ANY PROPERTY.

 

(B)           FOR EACH RETAIL PROPERTY MANAGED DIRECTLY BY ENTITIES OTHER THAN
THE PROPERTY MANAGER, ITS AFFILIATES OR AGENTS, THE COMPANY SHALL PAY THE
PROPERTY MANAGER A MONTHLY OVERSIGHT FEE OF UP TO ONE PERCENT (1.0%) OF THE
“GROSS INCOME” ATTRIBUTABLE TO

 

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THE PROPERTY FOR THE MONTH FOR WHICH THE OVERSIGHT FEE IS PAID.  FOR THESE
PURPOSES, THE TERM “GROSS INCOME” MEANS THE AGGREGATE AMOUNT OF ANY AND ALL
RENTS, ASSESSMENTS AND OTHER ITEMS, INCLUDING, BUT NOT LIMITED TO, TENANT
PAYMENTS FOR REAL ESTATE TAXES, PROPERTY LIABILITY AND OTHER INSURANCE, DAMAGES
AND REPAIRS, COMMON AREA MAINTENANCE, TAX REDUCTION FEES AND ALL OTHER TENANT
REIMBURSEMENTS, ADMINISTRATIVE CHARGES, PROCEEDS OF RENTAL INTERRUPTION
INSURANCE, PARKING FEES, INCOME FROM COIN OPERATED MACHINES AND OTHER
MISCELLANEOUS INCOME, COLLECTED BY, PAID TO, OR OTHERWISE DUE AND OWING, THE
MANAGEMENT COMPANY IN A GIVEN MONTH WITH RESPECT TO THE PROPERTY.  IN NO EVENT
SHALL THE PROPERTY MANAGER RECEIVE BOTH AN OVERSIGHT FEE AND A MANAGEMENT FEE
PURSUANT TO A MANAGEMENT AGREEMENT FOR THE SAME PROPERTY.  FURTHER, IN NO EVENT
SHALL THE AGGREGATE AMOUNT OF THE MANAGEMENT FEE PAID TO ENTITIES OTHER THAN THE
PROPERTY MANAGER, ITS AFFILIATES OR AGENTS PLUS THE OVERSIGHT FEE PAID TO THE
PROPERTY MANAGER EXCEED FOUR AND ONE-HALF PERCENT (4.5%) OF THE “GROSS INCOME”
OF A PARTICULAR PROPERTY.  IN NO EVENT SHALL AN OVERSIGHT FEE FOR ANY PROPERTY
BE PAID TO THE PROPERTY MANAGER FOR MORE THAN THREE YEARS FOLLOWING THE DATE
THAT THE PROPERTY OR THE REAL ESTATE OPERATING COMPANY (AS DEFINED BELOW), AS
THE CASE MAY BE, WAS ACQUIRED BY THE COMPANY OR ANY OF ITS AFFILIATES.  FOR
PURPOSES OF THIS AGREEMENT, THE TERM “REAL ESTATE OPERATING COMPANY” MEANS
(I) ANY ENTITY THAT HAS EQUITY SECURITIES REGISTERED UNDER SECTION 12(B) OR
12(G) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE “EXCHANGE ACT”);
(II) ANY ENTITY THAT FILES PERIODIC REPORTS UNDER SECTIONS 13 OR 15(D) OF THE
EXCHANGE ACT; OR (III) ANY ENTITY THAT, EITHER ITSELF OR THROUGH ITS
SUBSIDIARIES:

 

(1)           OWNS AND OPERATES INTERESTS IN REAL ESTATE ON A GOING CONCERN
BASIS RATHER THAN AS A CONDUIT VEHICLE FOR INVESTORS TO PARTICIPATE IN THE
OWNERSHIP OF ASSETS FOR A LIMITED PERIOD OF TIME;

 

(2)           HAS A POLICY OR PURPOSE OF REINVESTING SALE, FINANCING OR
REFINANCING PROCEEDS OR CASH FROM OPERATIONS;

 

(3)           HAS ITS OWN DIRECTORS, MANAGERS OR MANAGING GENERAL PARTNERS, AS
APPLICABLE; AND

 

(4)           EITHER: (A) HAS ITS OWN OFFICERS AND EMPLOYEES THAT, ON A DAILY
BASIS, ACTIVELY OPERATE THE ENTITY AND ITS SUBSIDIARIES AND BUSINESSES; OR
(B) HAS RETAINED THE SERVICES OF AN AFFILIATE OR SPONSOR OF, OR ADVISOR TO, THE
ENTITY TO, ON A DAILY BASIS, ACTIVELY OPERATE THE ENTITY AND ITS SUBSIDIARIES
AND BUSINESSES.

 

3.             BUSINESS COMBINATION:

 

(A)           BUSINESS COMBINATIONS.  THE COMPANY SHALL CONSIDER BECOMING A
SELF-ADMINISTERED REIT ONCE THE COMPANY’S ASSETS AND INCOME ARE, IN THE VIEW OF
THE BOARD OF DIRECTORS, OF SUFFICIENT SIZE SUCH THAT INTERNALIZING THE
MANAGEMENT FUNCTIONS PERFORMED BY THE COMPANY’S BUSINESS MANAGER, INLAND
AMERICAN BUSINESS MANAGER & ADVISOR, INC. (THE “BUSINESS MANAGER”), AND ITS
PROPERTY MANAGERS, INCLUDING THE PROPERTY MANAGER, IS IN THE BEST INTERESTS OF
THE STOCKHOLDERS.

 

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IF THE BOARD OF DIRECTORS SHOULD MAKE THIS DETERMINATION IN THE FUTURE, THE
COMPANY SHALL PAY ONE-HALF OF THE COSTS, AND THE BUSINESS MANAGER AND THE
PROPERTY MANAGERS SHALL PAY THE OTHER HALF, OF AN INVESTMENT BANKING FIRM.  THIS
FIRM SHALL JOINTLY ADVISE THE COMPANY AND THE SPONSOR ON THE VALUE OF THE
BUSINESS MANAGER AND THE PROPERTY MANAGERS.  AFTER THE INVESTMENT BANKING FIRM
COMPLETES ITS ANALYSES, THE COMPANY SHALL REQUIRE IT TO PREPARE A WRITTEN REPORT
AND MAKE A FORMAL PRESENTATION TO THE BOARD OF DIRECTORS.

 

FOLLOWING THE PRESENTATION BY THE INVESTMENT BANKING FIRM, THE BOARD OF
DIRECTORS SHALL FORM A SPECIAL COMMITTEE COMPRISED ENTIRELY OF INDEPENDENT
DIRECTORS TO CONSIDER A POSSIBLE BUSINESS COMBINATION WITH THE BUSINESS MANAGER
AND THE PROPERTY MANAGERS.  THE BOARD OF DIRECTORS SHALL, SUBJECT TO APPLICABLE
LAW, DELEGATE ALL OF ITS DECISION-MAKING POWER AND AUTHORITY TO THE SPECIAL
COMMITTEE WITH RESPECT TO THESE MATTERS.  THE SPECIAL COMMITTEE ALSO SHALL BE
AUTHORIZED TO RETAIN ITS OWN FINANCIAL ADVISORS AND LEGAL COUNSEL TO, AMONG
OTHER THINGS, NEGOTIATE WITH REPRESENTATIVES OF THE BUSINESS MANAGER AND THE
PROPERTY MANAGERS REGARDING A POSSIBLE BUSINESS COMBINATION.

 

(B)           CONDITIONS TO COMPLETION OF BUSINESS COMBINATION.  BEFORE THE
COMPANY MAY COMPLETE ANY BUSINESS COMBINATION WITH EITHER THE BUSINESS MANAGER
OR THE PROPERTY MANAGER IN ACCORDANCE WITH THIS SECTION 3, THE FOLLOWING TWO
CONDITIONS SHALL BE SATISFIED:

 

(I)            THE SPECIAL COMMITTEE FORMED IN ACCORDANCE WITH
SECTION 3(A) HEREOF RECEIVES AN OPINION FROM A RECOGNIZED INVESTMENT BANKING
FIRM, SEPARATE AND DISTINCT FROM THE FIRM JOINTLY RETAINED TO PROVIDE A
VALUATION ANALYSIS IN ACCORDANCE WITH SECTION 3(A) HEREOF, CONCLUDING THAT THE
CONSIDERATION TO BE PAID TO ACQUIRE THE BUSINESS MANAGER OR THE PROPERTY
MANAGER, AS THE CASE MAY BE, IS FAIR TO THE STOCKHOLDERS FROM A FINANCIAL POINT
OF VIEW; AND

 

(II)           THE HOLDERS OF A MAJORITY OF THE VOTES CAST AT A MEETING OF THE
STOCKHOLDERS CALLED FOR SUCH PURPOSE (IF A QUORUM IS PRESENT AT THE MEETING)
APPROVES THE ACQUISITION; PROVIDED THAT, FOR THESE PURPOSES ONLY, ANY SHARES
HELD BY THE INLAND GROUP, INC., THE SPONSOR OR ANY OF THEIR AFFILIATES WILL BE
COUNTED FOR PURPOSES OF DETERMINING THE PRESENCE OF QUORUM BUT WILL NOT,
HOWEVER, INITIALLY CONSTITUTE A VOTE CAST FOR PURPOSES OF DETERMINING THE NUMBER
OF VOTES NECESSARY TO APPROVE THE ACQUISITION.  IF THE PROPOSAL RECEIVES THE
NECESSARY VOTES TO APPROVE THE ACQUISITION, ALL SHARES HELD BY THE INLAND
GROUP, INC., THE SPONSOR OR ANY OF THEIR AFFILIATES MAY THEN BE VOTED IN FAVOR
OF THE TRANSACTION.

 

4.             TERM; TERMINATION OF AGREEMENT.

 

(A)           THIS AGREEMENT SHALL HAVE AN INITIAL TERM OF THREE YEARS AND,
THEREAFTER, WILL CONTINUE IN FORCE FOR SUCCESSIVE ONE-YEAR RENEWALS WITH THE
MUTUAL CONSENT OF THE PARTIES INCLUDING AN AFFIRMATIVE VOTE OF A MAJORITY OF THE
INDEPENDENT DIRECTORS. EACH EXTENSION SHALL BE EXECUTED IN WRITING BY BOTH
PARTIES HERETO PRIOR TO THE EXPIRATION OF THIS AGREEMENT OR OF ANY EXTENSION
THEREOF.

 

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(B)           NOTWITHSTANDING ANY OTHER PROVISION OF THE AGREEMENT TO THE
CONTRARY, THIS AGREEMENT MAY BE TERMINATED AT THE MUTUAL CONSENT OF THE
PARTIES.  THE COMPANY MAY TERMINATE THIS AGREEMENT WITHOUT CAUSE OR PENALTY UPON
A VOTE OF A MAJORITY OF THE INDEPENDENT DIRECTORS BY PROVIDING NO LESS THAN
SIXTY (60) DAYS’ WRITTEN NOTICE TO THE PROPERTY MANAGER. IN THE EVENT OF THE
TERMINATION OF THE AGREEMENT, THE PROPERTY MANAGER WILL COOPERATE WITH THE
COMPANY AND TAKE ALL REASONABLE STEPS REQUESTED TO ASSIST THE BOARD OF DIRECTORS
IN MAKING AN ORDERLY TRANSITION OF THE FUNCTIONS PERFORMED HEREUNDER BY THE
PROPERTY MANAGER.

 

(C)           IF THIS AGREEMENT IS TERMINATED PURSUANT TO THIS SECTION 4, THE
PARTIES SHALL HAVE NO LIABILITY OR OBLIGATION TO EACH OTHER, EXCEPT AS PROVIDED
IN SECTION 6 HEREOF.

 

5.             DEFAULT, BANKRUPTCY, ETC. AT THE SOLE OPTION OF THE COMPANY, THIS
AGREEMENT SHALL BE TERMINATED IMMEDIATELY UPON WRITTEN NOTICE OF TERMINATION
FROM THE BOARD OF DIRECTORS OF THE COMPANY TO THE PROPERTY MANAGER IF ANY OF THE
FOLLOWING EVENTS OCCURS:

 

(A)           THE PROPERTY MANAGER VIOLATES ANY PROVISIONS OF THIS AGREEMENT AND
AFTER NOTICE OF SUCH VIOLATION FAILS TO CURE THE DEFAULT WITHIN THIRTY (30)
DAYS;

 

(B)           A COURT OF COMPETENT JURISDICTION ENTERS A DECREE OR ORDER FOR
RELIEF IN RESPECT OF THE PROPERTY MANAGER IN ANY INVOLUNTARY CASE UNDER THE
APPLICABLE BANKRUPTCY, INSOLVENCY OR OTHER SIMILAR LAW NOW OR HEREAFTER IN
EFFECT, OR APPOINTS A RECEIVER LIQUIDATOR, ASSIGNEE, CUSTODIAN, TRUSTEE,
SEQUESTRATOR (OR SIMILAR OFFICIAL) OF THE PROPERTY MANAGER OR FOR ANY
SUBSTANTIAL PART OF ITS PROPERTY OR ORDERS THE WINDING UP OR LIQUIDATION OF THE
PROPERTY MANAGER’S AFFAIRS; OR

 

(C)           THE PROPERTY MANAGER COMMENCES A VOLUNTARY CASE UNDER ANY
APPLICABLE BANKRUPTCY, INSOLVENCY OR OTHER SIMILAR LAW NOW OR HEREAFTER IN
EFFECT, OR CONSENTS TO THE ENTRY OF AN ORDER FOR RELIEF IN AN INVOLUNTARY CASE
UNDER ANY SUCH LAW, OR CONSENTS TO THE APPOINTMENT OF OR TAKING POSSESSION BY A
RECEIVER, LIQUIDATOR, ASSIGNEE, CUSTODIAN, TRUSTEE, SEQUESTRATOR (OR SIMILAR
OFFICIAL) OF THE PROPERTY MANAGER OR FOR ANY SUBSTANTIAL PART OF ITS PROPERTY,
OR MAKES ANY GENERAL ASSIGNMENT FOR THE BENEFIT OF CREDITORS, OR FAILS GENERALLY
TO PAY ITS DEBTS, AS THEY BECOME DUE.

 

The Property Manager agrees that if any of the events specified in subsections
(b) and (c) of this Section 5 occur, it will give written notice thereof to the
Company within seven (7) days after the occurrence of the event.

 

6.             ACTION UPON TERMINATION. THE PROPERTY MANAGER SHALL NOT BE
ENTITLED TO COMPENSATION AFTER THE DATE OF TERMINATION OF THIS AGREEMENT FOR
FURTHER SERVICES HEREUNDER, BUT SHALL BE PAID ALL COMPENSATION ACCRUING TO THE
DATE OF TERMINATION. UPON TERMINATION OF THIS AGREEMENT, THE PROPERTY MANAGER
SHALL:

 

(A)           PAY OVER TO THE COMPANY ALL MONEYS COLLECTED AND HELD FOR THE
ACCOUNT OF THE COMPANY PURSUANT TO THIS AGREEMENT, AFTER DEDUCTING ANY ACCRUED
COMPENSATION AND REIMBURSEMENT FOR EXPENSES TO WHICH THE PROPERTY MANAGER IS
ENTITLED;

 

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(B)           DELIVER TO THE BOARD OF DIRECTORS OF THE COMPANY A FULL
ACCOUNTING, INCLUDING A STATEMENT SHOWING ALL PAYMENTS COLLECTED BY THE PROPERTY
MANAGER AND A STATEMENT OF ALL MONEY HELD BY THE PROPERTY MANAGER, COVERING THE
PERIOD FOLLOWING THE DATE OF THE LAST ACCOUNTING FURNISHED TO THE BOARD OF
DIRECTORS OF THE COMPANY;

 

(C)           DELIVER TO THE BOARD OF DIRECTORS OF THE COMPANY ALL PROPERTY AND
DOCUMENTS OF THE COMPANY THEN IN THE CUSTODY OF THE PROPERTY MANAGER; AND

 

(D)           COOPERATE WITH THE COMPANY AND TAKE ALL REASONABLE STEPS REQUESTED
BY THE COMPANY TO ASSIST IT IN MAKING AN ORDERLY TRANSITION OF THE FUNCTIONS
PERFORMED BY THE PROPERTY  MANAGER.

 

7.             SUCCESSORS AND ASSIGNS.  THIS AGREEMENT SHALL BIND ANY SUCCESSORS
OR ASSIGNS OF THE PARTIES HERETO AS HEREIN PROVIDED.

 

8.             LIABILITY AND INDEMNIFICATION.

 

(A)           THE COMPANY SHALL INDEMNIFY THE PROPERTY MANAGER AND ITS
AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS (INDIVIDUALLY AN
“INDEMNITEE”, COLLECTIVELY THE “INDEMNITEES”) TO THE SAME EXTENT AS THE COMPANY
MAY INDEMNIFY ITS OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS UNDER ITS ARTICLES
OF INCORPORATION AND BYLAWS SO LONG AS:

 

(I)            THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED, IN GOOD
FAITH, THAT THE COURSE OF CONDUCT THAT CAUSED THE LOSS, LIABILITY OR EXPENSE WAS
IN THE BEST INTERESTS OF THE COMPANY;

 

(II)           THE INDEMNITEE WAS ACTING ON BEHALF OF, OR PERFORMING SERVICES
FOR, THE COMPANY;

 

(III)          THE LIABILITY OR LOSS WAS NOT THE RESULT OF NEGLIGENCE OR
MISCONDUCT ON THE PART OF THE INDEMNITEE; AND

 

(IV)          ANY AMOUNTS PAYABLE TO THE INDEMNITEE ARE PAID ONLY OUT OF THE
COMPANY’S NET ASSETS AND NOT FROM ANY PERSONAL ASSETS OF ANY STOCKHOLDER.

 

(B)           THE COMPANY SHALL NOT INDEMNIFY ANY PERSON OR ENTITY FOR LOSSES,
LIABILITIES OR EXPENSES ARISING FROM, OR OUT OF, AN ALLEGED VIOLATION OF FEDERAL
OR STATE SECURITIES LAWS BY ANY PARTY SEEKING INDEMNITY UNLESS ONE OR MORE OF
THE FOLLOWING CONDITIONS ARE MET:

 

(I)            THERE HAS BEEN A SUCCESSFUL ADJUDICATION ON THE MERITS OF EACH
COUNT INVOLVING ALLEGED SECURITIES LAW VIOLATIONS AS TO THE PARTICULAR PERSON OR
ENTITY;

 

(II)           THE CLAIMS HAVE BEEN DISMISSED WITH PREJUDICE ON THE MERITS BY A
COURT OF COMPETENT JURISDICTION AS TO THE PARTICULAR PERSON OR ENTITY; OR

 

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(III)          A COURT OF COMPETENT JURISDICTION APPROVES A SETTLEMENT OF THE
CLAIMS AND FINDS THAT INDEMNIFICATION OF THE SETTLEMENT AND RELATED COSTS SHOULD
BE MADE AND THE COURT CONSIDERING THE REQUEST HAS BEEN ADVISED OF THE POSITION
OF THE SECURITIES AND EXCHANGE COMMISSION AND THE PUBLISHED OPINIONS OF ANY
STATE SECURITIES REGULATORY AUTHORITY IN WHICH SECURITIES OF THE COMPANY WERE
OFFERED AND SOLD WITH RESPECT TO THE AVAILABILITY OR PROPRIETY OF
INDEMNIFICATION FOR SECURITIES LAW VIOLATIONS.

 

(C)           THE COMPANY SHALL ADVANCE AMOUNTS TO PERSONS ENTITLED TO
INDEMNIFICATION HEREUNDER FOR LEGAL AND OTHER EXPENSES AND COSTS INCURRED AS A
RESULT OF ANY LEGAL ACTION FOR WHICH INDEMNIFICATION IS BEING SOUGHT ONLY IF ALL
OF THE FOLLOWING CONDITIONS ARE SATISFIED:

 

(I)            THE LEGAL ACTION RELATES TO ACTS OR OMISSIONS WITH RESPECT TO THE
PERFORMANCE OF DUTIES OR SERVICES BY THE INDEMNITEE FOR OR ON BEHALF OF THE
COMPANY;

 

(II)           THE LEGAL ACTION IS INITIATED BY A THIRD PARTY AND A COURT OF
COMPETENT JURISDICTION SPECIFICALLY APPROVES THE ADVANCEMENT; AND

 

(III)          THE INDEMNITEE RECEIVING THE ADVANCES UNDERTAKES TO REPAY ANY
MONIES ADVANCED BY THE COMPANY, TOGETHER WITH THE APPLICABLE LEGAL RATE OF
INTEREST THEREON, IN ANY CASE(S) IN WHICH A COURT OF COMPETENT JURISDICTION
FINDS THAT THE PARTY IS NOT ENTITLED TO BE INDEMNIFIED.

 

9.             NOTICES.  ANY NOTICE, REPORT OR OTHER COMMUNICATION REQUIRED OR
PERMITTED TO BE GIVEN HEREUNDER SHALL BE IN WRITING UNLESS SOME OTHER METHOD OF
GIVING SUCH NOTICE, REPORT OR OTHER COMMUNICATION IS ACCEPTED BY THE PARTY TO
WHOM IT IS GIVEN AND SHALL BE GIVEN BY BEING DELIVERED AT THE FOLLOWING
ADDRESSES OF THE PARTIES HERETO:

 

If to the Company, to:

Inland American Real Estate Trust, Inc.

 

2901 Butterfield Road

 

Oak Brook, IL 60523

 

Attention:

Ms. Roberta S. Matlin,
Vice President, Administration

 

Telephone:

(630) 218-8000

 

Facsimile:

(630) 218-4955

 

 

If to the Property Manager, to:

Inland American Retail Management LLC

 

2901 Butterfield Road

 

Oak Brook, IL 60523

 

Attention:

Thomas P. McGuinness

 

Telephone:

(630) 218-8000

 

Facsimile:

(630) 218-4955

 

Either party may at any time give notice in writing to the other party of a
change of its address for the purpose of this Section 9.

 

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10.           COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN ONE OR MORE
COUNTERPARTS, ALL OR WHICH TAKEN TOGETHER SHALL CONSTITUTE ONE AND THE SAME
AGREEMENT, AND SHALL BECOME EFFECTIVE WHEN THE COUNTERPARTS HAVE BEEN SIGNED BY
EACH PARTY HERETO AND DELIVERED TO THE OTHER PARTY HERETO.

 

11.           GOVERNING LAW.  THIS AGREEMENT SHALL BE CONSTRUED, PERFORMED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
ILLINOIS, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.

 

12.           AMENDMENTS.  THIS AGREEMENT MAY BE AMENDED OR MODIFIED, AND ANY OF
THE TERMS, COVENANTS, REPRESENTATIONS, WARRANTIES OR CONDITIONS HEREOF MAY BE
WAIVED, ONLY BY A WRITTEN INSTRUMENT EXECUTED BY THE PARTIES HERETO, OR IN THE
CASE OF A WAIVER, BY THE PARTY WAIVING COMPLIANCE.

 

13.           HEADINGS.  THE DESCRIPTIVE HEADINGS IN THIS AGREEMENT ARE FOR
REFERENCE PURPOSES ONLY AND SHALL NOT AFFECT THE MEANING OR INTERPRETATION OF
THIS AGREEMENT.

 

14.           SEVERABILITY.  IN THE EVENT THAT ANY PART OF THIS AGREEMENT IS
DECLARED BY ANY COURT OR OTHER JUDICIAL OR ADMINISTRATIVE BODY TO BE NULL, VOID
OR UNENFORCEABLE, SAID PROVISION SHALL SURVIVE TO THE EXTENT IT IS NOT SO
DECLARED, AND ALL OF THE OTHER PROVISIONS OF THIS AGREEMENT SHALL REMAIN IN FULL
FORCE AND EFFECT.

 

[THE REMAINDER OF THIS PAGE INTENTIONALLY BLANK]

 

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WHEREFORE, the undersigned have executed this Agreement by their duly authorized
officers or representatives as of the date first above written.

 

COMPANY:

PROPERTY MANAGER:

 

 

INLAND AMERICAN REAL ESTATE TRUST, INC.

INLAND AMERICAN RETAIL MANAGEMENT
LLC

 

 

 

 

 

 

By:

/s/ Brenda G. Gujral

 

By:

/s/ Thomas P. McGuinness

 

Name:

Brenda G. Gujral

 

Name:

Thomas P. McGuinness

 

Its:

President

 

Its:

CEO

 

 

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EXHIBIT A

 

FORM OF MANAGEMENT AGREEMENT

 

THIS MANAGEMENT AGREEMENT (this “Agreement”), dated as of [                    ]
[    ], 20[    ], is entered into by and between INLAND AMERICAN REAL ESTATE
TRUST, INC., a Maryland corporation (“Owner”), and INLAND AMERICAN RETAIL
MANAGEMENT LLC, a Delaware limited liability company (the “Property Manager”).

 

NOW, THEREFORE, in consideration of the mutual covenants and conditions herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

 

1.             Owner hereby employs the Property Manager exclusively to rent,
lease, operate and manage the property commonly known as and located in and
legally described on Exhibit A attached hereto and made a part hereof (the
“Premises”), upon the terms and conditions hereinafter set forth, for a term
beginning on [                    ] [    ], 20[    ] and ending on December 31,
20[    ] (the “Initial Term”) and thereafter for three successive one-year
renewal periods (each, a “Renewal Term”), with the first such one-year renewal
period commencing on January 1, 20[    ], and ending on December 31, 20[    ],
unless, between sixty (60) and ninety (90) days prior to the expiration of the
Initial Term or the current Renewal Term, if applicable, either Owner or the
Property Manager notifies the other party hereto in writing that it elects to
terminate this Agreement, in which case this Agreement shall be terminated on
the last day of the Initial Term or the current Renewal Term, if applicable.
 The Owner also may terminate this Agreement without cause or penalty upon a
vote of a majority of the Owner’s independent directors by providing no less
than sixty (60) days written notice to the Property Manager.  In the event this
Agreement is terminated for any reason prior to the expiration of the Initial
Term or any Renewal Term, Owner shall indemnify, protect, defend, save and hold
the Property Manager and all of its affiliates, shareholders, officers,
directors, employees, agents, successors and assigns harmless from and against
any and all claims, causes of action, demands, suits, proceedings, loss,
judgments, damage, awards, liens, fines, costs, attorneys’ fees and expenses, of
every kind and nature whatsoever that may be imposed on or incurred by the
Property Manager by reason of the willful misconduct, gross negligence,
malfeasance or unlawful acts (such unlawfulness having been adjudicated by a
court of proper jurisdiction) of Owner.

 

2.             THE PROPERTY MANAGER AGREES:

 

2.1           To accept the management of the Premises, to the extent, for the
period, and upon the terms herein provided and agrees to furnish the services of
its organization in connection with renting, leasing, operating and managing the
Premises, and, without limiting the generality of the foregoing, the Property
Manager agrees to be responsible for those specific duties and functions set
forth in Section 3 hereof.  The Property Manager shall be entitled at all times
to manage the Premises in accordance with the Property Manager’s standard
operating policies and procedures, except to the extent that any specific
provisions contained herein are to the contrary, in which case the Property
Manager shall manage the Premises consistent with the specific provisions of the
Agreement. The Property Manager agrees to use its best efforts to maintain the
highest occupancy at the highest rents for each space comprising the Premises.

 

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2.2           To render monthly reports for the Premises to Owner, to the
attention of the individual and address as directed by Owner from time to time,
and to remit to Owner the excess of Gross Income (as defined in Section 3.3
hereof) over expenses paid pursuant to Section 3.4 hereof (“Net Proceeds”) for
each month on or before the 15th day of the following month.  The Property
Manager will remit the Net Proceeds to Owner at the address as stated in
Section 6.1 hereof. The reports to be submitted shall consist of the Property
Manager’s commercial income report and commercial budget variance report, and
such other monthly, quarterly and annual reports as are customary in commercial
property management relationships and as reasonably requested by Owner in
writing from time to time.

 

2.4           In the event that expenses paid pursuant to Section 3.4 hereof
shall be in excess of Gross Income for any monthly period, to notify Owner of
same and Owner agrees to pay the excess amount immediately upon request from the
Property Manager, but nothing herein contained shall obligate the Property
Manager to advance its own funds on behalf of Owner. All advances by the
Property Manager on behalf of Owner shall be paid to the Property Manager by
Owner within ten (10) days after request.

 

2.5           To prepare annualized budgets for operation of the Premises and
submit them to Owner for approval. Annualized budgets shall be for planning and
informational purposes only, and the Property Manager shall have no liability to
Owner for any failure to meet any budget. However, the Property Manager will use
its best efforts to operate the Premises pursuant to the annualized budget. The
parties acknowledge that the first annualized budget has been prepared and
approved for the year commencing [                    ], [    ] 20[    ] and
ending on December 31, 20[    ].  Notwithstanding the period covered by the
first annualized budget, all subsequent annualized budgets shall cover the
period from January 1st of each year through December 31st of the same year. The
proposed annualized budget for each calendar year shall be submitted by the
Property Manager to Owner by December 1st of the year preceding the year for
which it applies, and Owner shall notify the Property Manager within fifteen
(15) days as to whether Owner has or has not approved the proposed annualized
budget. If Owner does not approve the proposed annualized budget, Owner shall
notify the Property Manager and the Property Manager shall make the necessary
amendments to the annualized budget. During the time the Property Manager is
preparing these amendments, the Property Manager will continue to operate the
Premises according to the last approved annualized budget. Owner’s approval of
the annualized budget shall constitute approval for the Property Manager to
expend sums for all budgeted expenditures, without the necessity to obtain
additional approval of Owner under any other expenditure limitations as set
forth elsewhere in this Agreement.

 

3.             OWNER AGREES, and does hereby give the Property Manager the
following exclusive authority and powers (all of which shall be exercised in the
name of the Property Manager, as the Property Manager for Owner) and Owner
agrees to assume and reimburse the Property Manager, its affiliates and agents
for all expenses paid or incurred in connection therewith:

 

3.1           To advertise the Premises or any part thereof and to display signs
thereon, as permitted by law; and to rent the same; to pay all expenses of
leasing the Premises, including but not limited to, newspaper and other
advertising, signage, banners, brochures, referral commissions, leasing
commissions, finder’s fees, salaries, bonuses and other compensation of

 

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leasing personnel responsible for the leasing of the Premises, salaries and
benefit expenses for on-site personnel and all other property-level expenses; to
cause references of prospective tenants to be investigated, it being understood
and agreed by the parties hereto that the Property Manager does not guarantee
the credit worthiness or collectibility of accounts receivable from tenants,
users or lessees; and to negotiate new leases and renewals and cancellations of
existing leases, which shall be subject to the Property Manager obtaining
Owner’s prior approval.  The Property Manager may collect from tenants all or
any of the following: a late rent administrative charge; a non-negotiable check
charge; credit report fee; a subleasing administrative charge and/or broker’s
commission and need not account for such charges and/or commission to Owner; to
terminate tenancies and to sign and serve in the name of Owner of the Premises
such notices as are deemed necessary by the Property Manager; to institute and
prosecute actions to evict tenants and to recover possession of the Premises or
portions thereof; with Owner’s prior authorization, to sue for in the name of
Owner of the Premises and recover rent and other sums due; and to settle,
compromise and release such actions or suits, or reinstate such tenancies. All
expenses of litigation including, but not limited to, attorneys’ fees, filing
fees and court costs that the Property Manager shall incur in connection with
the collecting of rent and other sums, or to recover possession of the Premises
or any portion thereof shall be deemed to be an operational expense of the
Premises. The Property Manager and Owner shall concur on the selection of the
attorney to handle any litigation.

 

3.2           To hire, supervise, discharge and pay salary and benefit expenses
for all labor required for the operation and maintenance of the Premises
including, but not limited to, on-site personnel, property managers, assistant
property managers, leasing consultants, engineers, janitors, maintenance
supervisors and other employees required for the operation and maintenance of
the Premises, including personnel spending a portion of their working hours (to
be charged on a pro rata basis) at the Premises (all of whom shall be deemed
employees of the Premises, not of the Property Manager). All expenses of such
employment shall be deemed operational expenses of the Premises. To make or
cause to be made all ordinary repairs and replacements necessary to preserve the
Premises in its present condition and for the operating efficiency thereof and
all alterations required to comply with lease requirements, and to do decorating
on the Premises; to negotiate and enter into, as the Property Manager for Owner
of the Premises, contracts for all items on budgets that have been approved by
Owner, any emergency services or repairs for items not exceeding $5,000.00,
appropriate service agreements and labor agreements for normal operation of the
Premises, which shall have terms not to exceed three years, and agreements for
all budgeted maintenance, minor alterations and utility services, including, but
not limited to, electricity, gas, fuel, water, telephone, window washing,
scavenger service, landscaping, snow removal, pest exterminating, decorating and
legal services in collection with the leases and service agreements relating to
the Premises, and other services or such of them as the Property Manager may
consider appropriate; and to purchase supplies and pay all bills.  The Property
Manager shall use its best efforts to obtain the foregoing services and
utilities for the Premises at the most economical costs and terms available to
the Property Manager. Owner hereby appoints the Property Manager as Owner’s
authorized Property Manager for the purpose of executing, as the managing
Property Manager for Owner, all of the foregoing types of agreements. In
addition, Owner agrees to specifically assume in writing all obligations under
all agreements so entered into by the Property Manager, on behalf of Owner of
the Premises, upon the termination of this Agreement and Owner shall indemnify,
protect, save, defend and hold the Property Manager and all of its affiliates,
shareholders, officers, directors,

 

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employees, agents, successors and assigns harmless from and against any and all
claims, causes of action, demands, suits, proceedings, loss, judgments, damage,
awards, liens, fines, costs, attorneys’ fees and expenses, of every kind and
nature whatsoever, resulting from, arising out of or in any way related to those
agreements and which relate to or concern matters occurring after termination of
this Agreement, but excluding matters arising out of the Property Manager’s
willful misconduct, gross negligence, malfeasance or unlawful acts. The Property
Manager shall secure the approval of, and execution of appropriate agreements
by, Owner for any non-budgeted and non-emergency/contingency capital items,
alterations or other expenditures in excess of $5,000.00 for anyone item,
securing for each item at least three (3) written bids, if practicable, or
providing evidence satisfactory to Owner that the agreed amount is lower than
industry standard pricing, from responsible contractors. The Property Manager
shall have the right from time to time during the term hereof, to contract with
and make purchases from its affiliates and third party agents; provided that
contract rates and prices are competitive with other available sources. The
Property Manager may at any time, and from time to time, request and receive the
prior written authorization of Owner of the Premises of any one or more
purchases or other expenditures, notwithstanding that the Property Manager may
otherwise be authorized hereunder to make such purchases or expenditures.

 

3.3           To collect rents and/or assessments and other items, including,
but not limited to, tenant payments for real estate taxes, property liability
and other insurance, damages and repairs, common area maintenance, tax reduction
fees and all other tenant reimbursements, administrative charges, proceeds of
rental interruption insurance, parking fees, income from coin operated machines
and other miscellaneous income, due or to become due (all such items being
referred to herein as “Gross Income”) and give receipts therefore and to deposit
all such Gross Income collected hereunder in the Property Manager’s custodial
account which the Property Manager will open and maintain, in a state or
national bank of the Property Manager’s choice and whose deposits are insured by
the Federal Deposit Insurance Corporation, exclusively for the Premises and any
other properties owned by Owner (or any entity that is owned or controlled by
the general partner of Owner) and managed by the Property Manager. Owner agrees
that the Property Manager shall be authorized to maintain a reasonable minimum
balance (to be determined jointly from time to time) in the custodial account.
The Property Manager may endorse any and all checks received in connection with
the operation of the Premises and drawn to the order of Owner and Owner shall,
upon request, furnish the Property Manager’s depository with an appropriate
authorization for the Property Manager to make the endorsement.

 

3.4           To pay all expenses of the Premises from the Gross Income
collected in accordance with Section 3.3 hereof, from the Property Manager’s
custodial account. It is understood that the Gross Income will be used first to
pay the compensation to the Property Manager as contained in Section 5 hereof,
then operational expenses and then any mortgage indebtedness, including real
estate tax and insurance impounds, but only as directed by Owner in writing and
only if sufficient Gross Income is available for such payments.

 

3.5           Nothing in this Agreement shall be interpreted to obligate the
Property Manager to pay from Gross Income, any expenses incurred by Owner prior
to the commencement of this Agreement, except to the extent Owner advances
additional funds to pay the expenses.

 

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3.6           To collect and handle tenants’ security deposits, including the
right to apply the security deposits to unpaid rent, and to comply, on behalf of
Owner of the Premises, with applicable state or local laws concerning security
deposits and interest thereon, if any.

 

3.7           The Property Manager shall not be required to advance any monies
for the care or management of the Premises, and Owner agrees to advance all
monies necessary therefor. If the Property Manager shall elect to advance any
money in connection with the Premises, Owner agrees to reimburse the Property
Manager forthwith and hereby authorizes the Property Manager to deduct the
advanced amounts from any monies due Owner.

 

3.8           To handle all steps necessary regarding any claim for insured
losses or damages; provided that the Property Manager will not make any
adjustments or settlements in excess of $10,000.00 without Owner’s prior written
consent.

 

3.9           Notwithstanding anything to the contrary contained in this
Agreement, Owner acknowledges and agrees that any or all of the duties of the
Property Manager as contained herein may be delegated by the Property Manager
and performed by an affiliate or third-party agent (a “SubProperty Manager”)
with whom the Property Manager contracts for the purpose of performing such
duties. Owner specifically grants the Property Manager the authority to enter
management agreements with any SubProperty Manager; provided that Owner shall
have no liability or responsibility to any SubProperty Manager for the payment
of the SubProperty Manager’s fee or for reimbursement to the SubProperty Manager
of its expenses or to indemnify the SubProperty Manager in any manner for any
matter; and provided further that the Property Manager shall require such
SubProperty Manager to agree, in the written agreement setting forth the duties
and obligations of such SubProperty Manager, to indemnify Owner for all loss,
damage or claims incurred by Owner as a result of the willful misconduct, gross
negligence, malfeasance or unlawful acts of the SubProperty Manager. Owner
further acknowledges and agrees that the Property Manager may assign this
Agreement and all of the Property Manager’s rights and obligations hereunder, to
another management entity that is then managing other property for Owner
(“Successor Property Manager”). Owner specifically grants the Property Manager
the authority to make an assignment of this Agreement to a Successor Property
Manager.

 

4.             OWNER FURTHER AGREES:

 

4.1           To indemnify, defend, protect, save and hold the Property Manager
and all of its affiliates, shareholders, officers, directors, employees, agents,
SubProperty Managers, successors and assigns (collectively, “Indemnified
Parties”) harmless from any and all claims, causes of action, demands, suits,
proceedings, loss, judgments, damage, awards, liens, fines, costs, attorneys’
fees and expenses, of every kind and nature whatsoever (collectively, “Losses”)
in connection with or in any way related to the Premises and from liability for
damage to the Premises and injuries to or death of any person whomsoever, and
damage to property; provided, however, that any indemnification pursuant to this
Section 4.1 shall not extend to any such Losses arising out of the negligence or
misconduct (such unlawfulness having been adjudicated by a court of proper
jurisdiction) of the Property Manager or any of the other Indemnified Parties.
Owner agrees to procure and carry at its own expense public liability insurance,
fire and extended coverage insurance, burglary and theft insurance, rental
interruption insurance, flood

 

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insurance (if appropriate) and boiler insurance (if appropriate) naming Owner
and the Property Manager as insureds and adequate to protect their interests and
in form, substance, and amounts reasonably satisfactory to the Property Manager,
and to furnish to the Property Manager certificates and policies evidencing the
existence of this insurance. The premiums for all insurance maintained by Owner
shall be paid by either Owner directly or, provided sufficient Gross Income is
available, by the Property Manager from Gross Income.  Unless Owner shall
provide insurance and furnish certificates and policies within ten (10) days
from the date of this Agreement, the Property Manager may, in its sole
discretion, but shall not be obligated to, purchase insurance and charge the
cost thereof to the account of Owner. All insurance policies shall provide that
the Property Manager shall receive thirty (30) days’ written notice prior to
cancellation of the policy.  The Property Manager shall not be liable for any
error of judgment or for any mistake of fact or law, or for any thing that it
may do or refrain from doing, except in cases of negligence or misconduct on the
part of the Property Manager (such unlawfulness having been adjudicated by a
court of proper jurisdiction).

 

4.2           Owner hereby warrants and represents to the Property Manager that
to the best of Owner’s knowledge, neither the Premises, nor any part thereof,
has previously been or is presently being used to treat, deposit, store, dispose
of or place any hazardous substance, that may subject the Property Manager to
liability or claims under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 (42 U.S.C. Section 9607) or any constitutional
provision, statute, ordinance, law or regulation of any governmental body or of
any order or ruling of any public authority or official thereof, having or
claiming to have jurisdiction thereover.  Furthermore, Owner agrees to
indemnify, protect, defend, save and hold the Property Manager and all of its
affiliates, shareholders, officers, directors, employees, agents, successors and
assigns harmless from any and all claims, causes of action, demands, suits,
proceedings, loss, judgments, damage, awards, liens, fines, costs, attorneys’
fees and expenses, of every kind and nature whatsoever, involving, concerning or
in any way related to any past, current or future allegations regarding
treatment, depositing, storage, disposal or placement by any party other than
the Property Manager of hazardous substances on the Premises.

 

4.3           To give adequate advance written notice to the Property Manager if
Owner desires that the Property Manager make payment, out of Gross Income, to
the extent funds are available after the payment of the Property Manager’s
compensation as contained in Section 5 hereof and all operational expenses, of
mortgage indebtedness, general taxes, special assessments, or fire, boiler or
any other insurance premiums. In no event shall the Property Manager be required
to advance its own money in payment of any such indebtedness, taxes, assessments
or premiums.

 

5.             OWNER AGREES TO PAY THE PROPERTY MANAGER, AS A MONTHLY MANAGEMENT
FEE HEREUNDER FOR MANAGING THE PREMISES DIRECTLY OR THROUGH ITS AFFILIATES OR
AGENTS, an amount equal to four and one-half percent (4.5%) of Gross Income for
the month for which the management fee is paid (each, a “Management Fee”), which
shall be deducted monthly by the Property Manager and retained by the Property
Manager from Gross Income prior to payment to Owner of Net Proceeds. The
Management Fee shall be compensation for all services specified herein and
provided by the Property Manager in connection with renting, leasing, operating
and managing the Premises. Any services beyond those specified herein, such as
sales brokerage, construction management,

 

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loan origination and servicing, property tax reduction and risk management
services, shall be performed by Property Manager and compensated by Owner only
if the parties agree on the scope of the services to be performed; provided that
the compensation to be paid therefor will not exceed ninety percent (90.0%) of
the market rate that would be paid to unrelated parties providing these
services; provided further that all compensation must be approved by a majority
of the independent directors of Owner. Owner acknowledges and agrees that
Property Manager may pay or assign all or any portion of its Management Fee to a
SubProperty Manager as described in Section 3.9 hereof.

 

5.1           The Property Manager shall retain all administrative charges
actually collected from tenants in connection with annual common area
maintenance reconciliations and tenant chargebacks for same.

 

6.             IT IS MUTUALLY AGREED THAT:

 

6.1           Owner shall designate one (1) person to serve as Owner’s
Representative in all dealings with the Property Manager hereunder. Whenever the
notification and reporting to Owner or the approval, consent or other action of
Owner is called for hereunder, any notification and reporting if sent to or
specified in writing to Owner’s Representative, and any approval, consent or
action if executed by Owner’s Representative, shall be binding on Owner. Owner’s
Representative initially shall be:

 

Name

 

Address

Ms. Roberta S. Matlin,
Vice President, Administration

 

2901 Butterfield Road
Oak Brook, IL 60523

 

 

Telephone:

(630) 218-8000

 

 

Facsimile:

(630) 218-4955

 

Owner’s Representative may be changed at the discretion of Owner, at any time
and from time to time, and shall be effective upon the Property Manager’s
receipt of written notice of the new Owner’s Representative.

 

6.2           Owner expressly withholds from the Property Manager any power or
authority to make any structural changes in any building or to make any other
major alterations or additions in or to any such building or equipment therein,
or to incur any expense chargeable to Owner, other than expenses related to
exercising the express powers above vested in the Property Manager without the
prior written direction of Owner’s Representative, except that the Property
Manager shall make all emergency repairs as may be required to ensure the safety
of persons or property or which are immediately necessary for the preservation
and safety of the Premises or the safety of the tenants and occupants thereof or
are required to avoid the suspension of any necessary service to the Premises.

 

6.3           The Property Manager shall be responsible for notifying Owner in
the event it receives notice that any building on the Premises or any equipment
therein does not comply with the requirements of any statute, ordinance, law or
regulation of any governmental body or of any public authority or official
thereof having or claiming to have jurisdiction thereover. The Property Manager
shall promptly forward to Owner any complaints, warnings,

 

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notices or summonses received by the Property Manager relating to these matters.
Owner represents that to the best of its knowledge the Premises and such
equipment comply with all such requirements and authorizes the Property Manager
to disclose Owner of the Premises to any officials and agrees to indemnify,
protect, defend, save and hold the Property Manager and the other Indemnified
Parties harmless of and from any and all Losses which may be imposed on them or
any of them by reason of the failure of Owner to correct any present or future
violation or alleged violation of any and all present or future laws,
ordinances, statutes, or regulations of any public authority or official
thereof, having or claiming to have jurisdiction thereover, of which it has
actual notice.

 

6.4           In the event it is alleged or charged that any building on the
Premises or any equipment therein or any act or failure to act by Owner with
respect to the Premises or the sale, rental, or other disposition thereof fails
to comply with, or is in violation of, any of the requirements of any
constitutional provision, statute, ordinance, law or regulation of any
governmental body or any order or ruling of any public authority or official
thereof having or claiming to have jurisdiction thereover, and the Property
Manager, in its sole and absolute discretion, considers that the action or
position of Owner, with respect thereto may result in damage or liability to the
Property Manager, the Property Manager shall have the right to cancel this
Agreement at any time by written notice to Owner of its election so to do, which
cancellation shall be effective upon delivery of the notice to Owner. Any notice
may be delivered personally or by registered mail, on or to the person named to
receive the Property Manager’s monthly statement at the address provided in
Section 6.1 hereof, and if delivered by mail shall be deemed to have been
delivered when deposited in the mails. Any cancellation pursuant to this
Section 6.4 shall not release the indemnities of Owner set forth in this
Agreement, including, but not limited to, those set forth in Sections 1, 3.2,
4.1, 4.2 and 6.3 above and shall not terminate any liability or obligation of
Owner to the Property Manager for any payment, reimbursement, or other sum of
money then due and payable to the Property Manager hereunder.

 

6.5           All personnel expenses, including but not limited to, wages,
salaries, insurance, benefits, employment related taxes and other governmental
charges, shall be charges incurred in connection with the Premises for purposes
of Section 3.4 hereof, to the extent that these expenses are apportioned by the
Property Manager to services rendered for the benefit of the Premises. The
number and classification of employees serving the Premises shall be as
determined by the Property Manager to be appropriate for the proper operation of
the Premises; provided that Owner may request changes in the number and/or
classifications of employees, and the Property Manager shall make all requested
changes unless in its judgment the resulting level of operation and/or
maintenance of the Premises will be inadequate. The Property Manager shall honor
any collective bargaining contract covering employment at the Premises which is
in effect upon the date of execution of this Agreement; provided that the
Property Manager shall not assume or otherwise become a party to any collective
bargaining contract for any purpose whatsoever and all personnel subject to a
collective bargaining contract shall be considered the employees of the Premises
and not the Property Manager.

 

7.             Owner shall pay or reimburse the Property Manager, its affiliates
or agents for all amounts due it under this Agreement for services and advances
prior to termination of this Agreement. All provisions of this Agreement that
require Owner to have insured, or to protect, defend, save, hold and indemnify
or to reimburse the Property Manager shall survive any

 

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expiration or termination of this Agreement and, if the Property Manager is or
becomes involved in any claim, proceeding or litigation by reason of having been
the Property Manager of Owner, such provisions shall apply as if this Agreement
were still in effect. The parties understand and agree that the Property Manager
may withhold funds for sixty (60) days after the end of the month in which this
Agreement is terminated to pay bills previously incurred but not yet invoiced
and to close accounts. Should the funds withheld be insufficient to meet the
obligation of the Property Manager to pay bills previously incurred, Owner
shall, upon demand, advance sufficient funds to the Property Manager to ensure
fulfillment of the Property Manager’s obligation to do so, within ten (10) days
of receipt of notice and an itemization of all unpaid bills.

 

8.             Nothing contained herein shall be construed as creating any
rights in third parties who are not the parties to this Agreement, nor shall
anything contained herein be construed to impose any liability upon Owner or the
Property Manager for the performance by Owner or the Property Manager under any
other agreement they have entered into or may in the future enter into, without
the express written consent of the other having been obtained.  Nothing
contained in this Agreement shall be deemed or construed to create a partnership
or joint venture between Owner and the Property Manager or to cause either party
to be responsible in any way for the debts or obligations of the other or any
other party (but nothing contained herein shall affect the Property Manager’s
responsibility to transmit payments for the account of Owner as provided
herein), it being the intention of the parties that the only relationship
hereunder is that of the Property Manager and principal.

 

9.             Wherever possible, each provision of this Agreement shall be
interpreted in a manner as to be effective and valid under applicable law, but
if any provision of this Agreement shall be prohibited or invalid under
applicable law, the provision shall be ineffective only to the extent of the
prohibition or invalidity, without invalidating the remainder of the provision
or the remaining provisions of this Agreement. This Agreement, its validity,
performance and enforcement shall be construed in accordance with, and governed
by, the internal laws of the State in which the Premises are located without
regard to that State’s conflicts of law principles.

 

10.           This Agreement shall be binding upon the successors and assigns of
the Property Manager and the heirs, administrators, executors, successors and
assignees of Owner.  This Agreement contains the entire Agreement of the parties
relating to the subject matter hereof, and there are no understandings,
representations or undertakings by either party except as herein contained. This
Agreement may be modified solely by a written agreement executed by both parties
hereto.

 

11.           If any party hereto defaults under the terms or conditions of this
Agreement, the defaulting party shall pay the non-defaulting party’s court costs
and attorneys’ fees incurred in the enforcement of any provision of this
Agreement.

 

12.           The failure of either party to this Agreement to, in anyone or
more instances, insist upon the performance of any of the terms, covenants or
conditions of this Agreement, or to exercise any rights or privileges conferred
in this Agreement, shall not be construed as thereafter waiving any such terms,
covenants, conditions, rights or privileges, but the same shall continue in full
force and effect as if no the forbearance or waiver had occurred.

 

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13.           This Agreement is deemed to have been drafted jointly by the
parties, and any uncertainty or ambiguity shall not be construed for or against
either party as an attribution of drafting to either party.

 

14.           All notices given under this Agreement shall be sent by certified
mail, return receipt requested, sent by facsimile transmission, or hand
delivered at:

 

If to Owner, to:

Inland American Real Estate Trust, Inc.

 

2901 Butterfield Road

 

Oak Brook, IL 60523

 

Attention:

Ms. Roberta S. Matlin,
Vice President, Administration

 

Telephone:

(630) 218-8000

 

Facsimile:

(630) 218-4955

 

 

 

If to Property Manager, to:

Inland American Retail Management LLC

 

2901 Butterfield Road

 

Oak Brook, IL 60523

 

Attention:

Thomas P. McGuinness

 

Telephone:

(630) 218-8000

 

Facsimile:

(630) 218-4955

 

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WHEREFORE, the undersigned have executed this Agreement by their duly authorized
officers or representatives as of the date first above written.

 

PROPERTY MANAGER:

OWNER:

 

 

INLAND AMERICAN RETAIL MANAGEMENT
LLC, a Delaware limited liability company

INLAND AMERICAN REAL ESTATE TRUST, INC.,
a Maryland corporation

 

 

 

 

 

 

By:

 

 

By:

 

 

Name:

 

 

Name:

 

 

Its:

 

 

Its:

 

 

 

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