<PAGE>

                                                                    EXHIBIT 10.2

                  FIRST AMENDED AND RESTATED ADVISORY AGREEMENT

     This FIRST AMENDED AND RESTATED ADVISORY AGREEMENT (this "Agreement") is
made as of November ___, 2000 between Inland Retail Real Estate Trust, Inc., a
Maryland corporation (the "Company"), and Inland Retail Real Estate Advisory
Services, Inc., an Illinois corporation (the "Advisor").

                              W I T N E S S E T H:

     WHEREAS, the Company and the Advisor have executed that certain Advisory
Agreement dated February 11, 1999 (the "Original Agreement"), relating to
certain services to be provided by the Advisor to the Company; and

     WHEREAS, the Original Agreement was subject to the terms of that certain
Property Acquisition Service Agreement, dated February 11, 1999, among Inland
Real Estate Acquisitions, Inc. ("IREAI"), the Advisor, the Company, Inland Real
Estate Advisory Services, Inc. ("IREAS") and Inland Real Estate Corporation
("IREC") (the "Original Property Acquisition Agreement") relating to services
provided by IREAI in connection with the acquisition of real estate for the
Company and IREC; and

     WHEREAS, IREC has become a self-administered REIT through a merger with
IREAS and Inland Commercial Property Management, Inc., and is no longer a party
to the Original Property Acquisition Agreement; and

     WHEREAS, the parties hereto desire to amend and restate the Original
Agreement to reflect that this Agreement shall no longer be subject to the terms
of the Original Property Acquisition Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants herein set forth,
the parties hereto agree as follows and hereby amend and restate the Original
Agreement in its entirety to read as follows:

     1.   DEFINITIONS. As used herein, the following terms shall have the
meanings set forth below:

          (a)  "Acquisition Expenses" means expenses related to the Company's
          selection, evaluation and acquisition of, and investment in,
          properties, whether or not acquired or made, including but not limited
          to legal fees and expenses, travel and communications expenses, cost
          of appraisals and surveys, nonrefundable option payments on property
          not acquired, accounting fees and expenses, computer use related
          expenses, architectural and engineering reports, environmental and
          asbestos audits, title insurance and escrow fees, loan fees or points
          or any fee of a similar nature, however designated, and personnel and
          miscellaneous expenses related to the selection and acquisition of
          properties. Acquisition Expenses will accrue and be paid

<PAGE>

          on Properties purchased with the Gross Offering Proceeds, proceeds of
          Shares sold via the Company's Distribution Reinvestment Program and
          proceeds received from the issuance and exercise of the Soliciting
          Dealer Warrants issued by the Company in connection with the Offering,
          as well as on the entire purchase price of all Properties including
          any acquisition financing related thereto.

          (b)  "Advisor Asset Management Fee" means an amount equal to 1% of the
          Average Invested Assets.

          (c)  "Affiliate" means, with respect to any other Person: (i) any
          Person directly or indirectly owning, controlling or holding, with the
          power to vote 10% or more of the outstanding voting securities of such
          other Person; (ii) any Person 10% or more of whose outstanding voting
          securities are directly or indirectly owned, controlled or held, with
          the power to vote, by such other Person; (iii) any Person directly or
          indirectly controlling, controlled by or under common control with
          such other Person; (iv) any executive officer, director, trustee or
          general partner of such other Person; and (v) any legal entity for
          which such Person acts as an executive officer, director, trustee or
          general partner.

          (d)  "Affiliated Directors" means those Directors of the Company who
          are affiliated with the Company or its Affiliates.

          (e)  "Articles of Incorporation" means the Articles of Incorporation
          of the Company, as amended from time to time.

          (f)  "Average Invested Assets" means, for any period, the average of
          the aggregate Book Value of the assets of the Company invested,
          directly or indirectly, in equity interests and in loans secured by
          real estate, before reserves for depreciation or bad debts or other
          similar noncash reserves, computed by taking the average of such
          values at the end of each month during such period.

          (g)  "Board of Directors" means the board of directors of the Company.

          (h)  "Book Value" of an asset means the value of such asset on the
          books of the Company, before allowance for depreciation or
          amortization.

          (i)  "Code" means the Internal Revenue Code of 1986, as amended.

          (j)  "Community Center" means any Shopping Center leased primarily to
          one or more retail tenants providing for the sale of soft lines
          (wearing apparel for men, women and children) and hard lines (hardware
          and appliances) in addition to the convenience goods and personal
          services provided by a Neighborhood Center, with gross leasable area
          ranging from 100,000 to 300,000 or more square feet.


                                       2
<PAGE>

          (k)  "Company Fixed Assets" means the real estate, together with the
          buildings, leasehold interests, improvements, equipment, furniture,
          fixtures and personal property associated therewith, used by the
          Company in the conduct of its business.

          (l)  "Competitive Real Estate Commission" means the real estate or
          brokerage commission paid for the purchase or sale of a Property which
          is reasonable, customary and competitive in light of the size, type
          and location of such Property.

          (m)  "Contract Price for the Property" means the amount actually paid
          or allocated to the purchase, development, construction or improvement
          of a Property exclusive of Acquisition Expenses.

          (n)  "Cumulative Return" means a cumulative, noncompounded return,
          equal to 7% per annum on Invested Capital commencing upon acceptance
          of the investor's subscription.

          (o)  "Current Return" means a noncumulative, noncompounded return,
          equal to 7% per annum on Invested Capital.

          (p)  "Fiscal Year" means any period for which any income tax return is
          submitted by the Company to the Internal Revenue Service and which is
          treated by the Internal Revenue Service as a reporting period.

          (q)  "Gross Dollars Invested in Properties" means the amount actually
          paid or allocated to the purchase, development, construction or
          improvement of Properties acquired by the Company.

          (r)  "Gross Offering Proceeds" means the total proceeds from the sale
          of the 50,000,000 Shares offered on "best efforts" basis during the
          public offering period before deductions for Offering Expenses. For
          purposes of calculating Gross Offering Proceeds, the purchase price
          for all Shares, including those for which volume discounts apply,
          shall be deemed to be $10 per Share. Unless specifically included,
          Gross Offering Proceeds does not include the total proceeds from the
          sale of up to 4,000,000 Shares under the Company's Distribution
          Reinvestment Program during the public offering period, the purchase
          price for which shall be $9.50 per Share; nor the total proceeds from
          the issuance and exercise of the Soliciting Dealer Warrants.

          (s)  "Gross Revenues From Properties" means all cash receipts derived
          from the operation of Company Fixed Assets.

          (t)  "Incentive Advisory Fee" means an amount equal to 15% of the net
          proceeds from the sale of a Property after the Stockholders have first
          received: (i) their Cumulative Return; and (ii) a return of their
          Invested Capital.


                                       3
<PAGE>

          (u)  "Independent Directors" means the Directors of the Company who:
          (i) are not affiliated and have not been affiliated within the two
          years prior to their becoming an Independent Director, directly or
          indirectly, with the Company, the Sponsor or the Advisor, whether by
          ownership of, ownership interest in, employment by, any material
          business or professional relationship with, or as an officer or
          director of the Company, the Sponsor, the Advisor or any of their
          Affiliates; (ii) do not serve as a director for more than two other
          REITs organized by the Company or the Advisor or advised by the
          Advisor; and (iii) perform no other services for the Company, except
          as Directors. For this purpose, an indirect relationship shall include
          circumstances in which a member of the immediate family of a Director
          has one of the foregoing relationships with the Company, the Sponsor
          or the Advisor or any of their Affiliates. For purposes of determining
          whether or not the business or professional relationship is material,
          the aggregate gross revenue derived by the prospective Independent
          Director from the Company, the Sponsor, the Advisor and their
          Affiliates shall be deemed material PER SE if it exceeds five percent
          of the prospective Independent Director's: (i) annual gross revenue,
          derived from all sources, during either of the last two years; or (ii)
          net worth, on a fair market value basis.

          (v)  "Invested Capital" means the original issue price paid for the
          Shares reduced by prior distributions from the sale or financing of
          the Company's Properties.

          (w)  "IREAI" means Inland Real Estate Acquisitions, Inc.

          (x)  "IREIC" means Inland Real Estate Investment Corporation, which is
          a wholly-owned subsidiary of The Inland Group, Inc. The Advisor is a
          wholly owned subsidiary of IREIC. IREIC is the Sponsor of the Company.

          (y)  "Management Agent" means an entity which provides property
          rental, leasing, operation and management services to the Company. The
          Management Agent is Inland Southeast Property Management Corp., an
          Affiliate of the Advisor, or anyone which succeeds it in such
          capacity.

          (z)  "Neighborhood Center" means any Shopping Center which is leased
          primarily to one or more retail tenants providing for the sale of
          convenience goods (foods, drugs and sundries) and personal services
          (laundry, dry cleaning, barbering, shoe repair, etc.) for the
          day-to-day living needs of the immediate neighborhood, with gross
          leasable area ranging from 10,000 to 100,000 square feet.

          (aa) "Net Income" means, for any period, total revenues applicable to
          such period, less the expenses applicable to such period other than
          additions to or allowances for reserves for depreciation, amortization
          or bad debts or other similar noncash reserves; provided, however,
          that Net Income shall not include the gain from the sale of the
          Company's assets.


                                       4
<PAGE>

          (bb) "Offering" means the offering of Shares of the Company pursuant
          to the Prospectus.

          (cc) "Offering Expenses" means all those expenses incurred by and to
          be paid from the assets of the Company in connection with and in
          preparing the Company for registration and subsequently offering and
          distributing Shares to the public, including, but not limited to,
          total underwriting and brokerage discounts and commissions (including
          fees and expenses of underwriters and their accountants and attorneys
          paid by the Company), expenses for printing, engraving, mailing,
          salaries of the Company's employees while engaged in sales activity,
          charges of transfer agents, registrars, trustees, escrow holders,
          depositaries, experts, expenses of qualification of the sale of the
          securities under federal and state laws, including taxes and fees, and
          accountants' and attorneys' fees and expenses.

          (dd) "Person" means any individual, corporation, business trust,
          estate, trust, partnership, limited liability company, association,
          two or more persons having a joint or common interest, or any other
          legal or commercial entity.

          (ee) "Primary Geographical Area of Investment" of the Company means
          the states east of the Mississippi River in the United States.

          (ff) "Property" or "Properties" means any, or all, respectively, of
          the real property and improvements thereon owned or to be owned by the
          Company, directly or indirectly.

          (gg) "Property Disposition Fee" means a real estate disposition fee,
          payable (under certain conditions) to the Advisor and its Affiliates
          upon the sale of the Company's Property in an amount equal to the
          lesser of: (i)3% of the contracted for sales price of the Property; or
          (ii)50% of the commission paid to third parties which is reasonable,
          customary and competitive in light of the size, type and location of
          such Property.

          (hh) "Property Management Fee" means any fee paid to an Affiliate or
          third party as compensation for management of the Company's
          Properties. The Property Management Fee shall be equal to not more
          than 90% of the fee which would be payable to an unrelated party
          providing such services, which fee shall initially be 4.5% of the
          gross revenues from the Properties.

          (ii) "Prospectus" means the final prospectus of the Company in
          connection with the registration of Shares filed with the Securities
          and Exchange Commission on Form S-11, as amended and supplemented.

          (jj) "Real Property" means improved and unimproved land, improvements,
          furniture and fixtures located on or used in connection with, land and
          any interest in any of the foregoing, including an interest in air and
          subterranean or mineral rights.


                                       5
<PAGE>

          (kk) "Regional Center" means any Shopping Center that provides for
          general merchandise, apparel, furniture and home furnishings in depth
          and variety, as well as a range of services and recreational
          facilities. It is built around one or two full-line department stores
          of generally not less than 75,000 square feet each. A Regional Center
          may have gross leasable area ranging from 250,000 to more than 900,000
          square feet, and provides services typical of a business district yet
          not as extensive as those of a Super Regional Center.

          (ll) "REIT" means a real estate investment trust as defined in
          Sections 856 through 860 of the Code.

          (mm) "Retail Center" means real estate primarily improved for use as
          retail establishments, principally a multi-tenant Neighborhood Center
          or Community Center (but also including a Regional Center or
          single-user retail facilities) or improved with other commercial
          facilities which provide goods or services.

          (nn) "Shares" means the shares of common stock, par value $0.01 per
          share, of the Company, and "Share" means one of those Shares.

          (oo) "Shopping Center" means a group of commercial establishments
          planned, developed, owned and managed as a unit related in location,
          size and type of shops to the trade area the unit serves. It provides
          on-site parking in definite relationship to the types and sizes of
          stores.

          (pp) "Sponsor" means IREIC.

          (qq) "Stockholders" means holders of Shares.

          (rr) "Super Regional Center" means any Shopping Center that provides
          for extensive variety in general merchandise, apparel, furniture and
          home furnishings, as well as a variety of services and recreational
          facilities. It is built around three or more full-line department
          stores of generally not less than 100,000 square feet. A Super
          Regional Center may have gross leasable area ranging from 600,000 to
          more than 1,500,000 square feet.

          (ss) "Total Operating Expenses" means the aggregate expenses of every
          character paid or incurred by the Company as determined under
          generally accepted accounting principles, including Advisor Asset
          Management Fees, but excluding:

               (i)  the expenses of raising capital such as Offering Expenses,
               legal, audit, accounting, underwriting, brokerage, listing,
               registration and other fees, printing and other such expenses,
               and taxes incurred in connection with the issuance, distribution,
               transfer, registration and stock exchange listing of the Shares;


                                       6
<PAGE>

               (ii) interest payments;

               (iii) taxes;

               (iv) noncash expenditures such as depreciation, amortization and
               bad debt reserves;

               (v)  the Incentive Advisory Fee payable to the Advisor; and

               (vi) Acquisition Expenses, real estate commissions on resale of
               Real Property and other expenses connected with the acquisition,
               disposition and ownership of real estate interests, mortgage
               loans or other property (such as the costs of foreclosure,
               insurance premiums, legal services, maintenance, repair and
               improvement of Real Property).

     2.   DUTIES OF ADVISOR. The Advisor shall consult with the Company and
shall, at the request of the Board of Directors or the officers of the Company,
furnish advice and recommendations with respect to all aspects of the business
and affairs of the Company. In general, the Advisor shall inform the Board of
Directors of factors which come to its attention which would influence the
policies of the Company. Subject to the supervision of the Board of Directors
and consistent with the provisions of the Articles of Incorporation, the Advisor
shall use its best efforts to:

          (a)  Present to the Company a continuing and suitable real estate
          investment program and opportunities to make investments in Real
          Properties consistent with the investment policies of the Company and
          the investment program adopted by the Board of Directors and in effect
          at the time and furnish the Company with advice with respect to the
          making, acquisition, holding and disposition of investments and
          commitments therefor. In presenting investment opportunities
          hereunder, the Advisor shall comply with, and be subject to, the
          provisions of that certain Property Acquisition Service Agreement,
          dated the date hereof, among IREAI, the Advisor, and the Company (the
          "Property Acquisition Service Agreement"), as the same may be amended
          from time to time. To the extent possible, the resolution of
          conflicting investment opportunities between the Company and other
          investment entities advised or managed by the Advisor and its
          Affiliates for a prospective investment opportunity (a "Proposed
          Property") will be resolved by giving priority to the Company,
          provided that the Proposed Property meets the acquisition criteria of
          the Company. The Property Acquisition Service Agreement grants the
          Company the first opportunity to purchase such Proposed Property which
          is placed under contract by IREAI, the Advisor or its Affiliates,
          provided the Company is able to close the purchase of the Proposed
          Property within 60 days.

          Other factors which may be considered in connection with evaluating
     the suitability of the Proposed Property for investment include: (i) the
     effect of the acquisition on the diversification of each entity's
     portfolio; (ii) the amount of funds available for investment;


                                       7
<PAGE>

     (iii) cash flow; and (iv) the estimated income tax effects of the purchase
     and subsequent disposition. The Independent Directors of the Company must,
     by a majority vote, approve all actions by the Advisor or its Affiliates
     which present potential conflicts with the Company as set forth in the
     Property Acquisition Service Agreement.

          (b)  Manage the Company's day-to-day investment operations, subject to
          the final paragraph of this Section 2, to effect the investment
          program adopted by the Board of Directors and perform or supervise the
          performance of such other administrative functions necessary in
          connection with the management of the Company as may be agreed upon by
          the Advisor and the Company;

          (c)  Serve as the Company's investment advisor, subject to the final
          paragraph of this Section 2, in connection with policy decisions to be
          made by the Board of Directors and, as requested, furnish reports to
          the Board of Directors and provide research, economic and statistical
          data in connection with the Company's investments and investment
          policies;

          (d)  On behalf of the Company, investigate, select and conduct
          relations with lenders, consultants, accountants, brokers, property
          managers, attorneys, underwriters, appraisers, insurers, corporate
          fiduciaries, banks, builders and developers, sellers and buyers of
          investments and persons acting in any other capacity specified by the
          Company from time to time, and enter into contracts with, retain and
          supervise services performed by such parties in connection with
          investments which have been or may be acquired or disposed of by the
          Company;

          (e)  Cooperate with the Management Agent in connection with property
          management services and other activities relating to the Company's
          assets as the Advisor shall deem appropriate in the particular
          circumstances, subject to the requirement that the Advisor or the
          Management Agent, as the case may be, qualifies as an "independent
          contractor" as that phrase is used in connection with applicable laws,
          rules and regulations affecting REITs that own Real Property;

          (f)  Upon request of the Company, act, or obtain the services of
          others to act, as attorney-in-fact or agent of the Company in making,
          acquiring and disposing of investments, disbursing, and collecting the
          funds, paying the debts and fulfilling the obligations of the Company
          and handling, prosecuting and settling any claims of the Company,
          including foreclosing and otherwise enforcing mortgage and other liens
          and security interests securing investments;

          (g)  Assist in negotiations on behalf of the Company with investment
          banking firms and other institutions or investors for public or
          private sales of securities of the Company or for other financing on
          behalf of the Company, but in no event in such a way that the Advisor
          shall be acting as a broker, dealer, underwriter or investment advisor
          in securities of or for the Company;


                                       8
<PAGE>

          (h)  Maintain, with respect to any Real Property and to the extent
          available, title insurance or other assurance of title and customary
          fire, casualty and public liability insurance;

          (i)  Upon request of the Board of Directors, and subject to the final
          paragraph of this Section 2, invest and reinvest any money of the
          Company;

          (j)  Supervise the preparation and filing and distribution of returns
          and reports to governmental agencies and to investors and act on
          behalf of the Company in connection with investor relations;

          (k)  Provide office space, equipment and personnel as required for the
          performance of the foregoing services as Advisor;

          (l)  Advise the Company of the operating results of the Company
          properties, to cause the Manager to prepare on a timely basis, and to
          review, for such properties operating budgets, maintenance and
          improvement schedules, one, three and five year projections of
          operating results and such other reports as may be appropriate;

          (m)  As requested by the Company, make reports to the Company of its
          performance of the foregoing services and furnish advice and
          recommendations with respect to other aspects of the business of the
          Company;

          (n)  Prepare on behalf of the Company all reports and returns required
          by the Securities and Exchange Commission, Internal Revenue Service
          and other state or federal governmental agencies;

          (o)  Undertake and perform all services or other activities necessary
          and proper to carry out the investment objectives of the Company; and

          (p)  Undertake communications with Stockholders in accordance with
          applicable law and the Articles of Incorporation, provided, however,
          that Affiliates of the Advisor have no obligations to the Company
          other than as expressly stated herein, and the Advisor and its
          Affiliates have no obligations to present to the Company any specific
          investment opportunity except as described in the Prospectus.

In providing advice and services as provided in subparagraphs (a) through (p)
above of this Section 2, the Advisor shall not (i) engage in any activity which
would require it to be registered as an "Investment Advisor," as that term is
defined in the Investment Advisors Act of 1940 OR in any state securities law or
(ii) cause the Company to make such investments as would cause the Company to
become an "Investment Company," as that term is defined in the Investment
Company Act of 1940.

     3.   NO PARTNERSHIP OR JOINT VENTURE. The Company and the Advisor are not,
and shall not be deemed to be, partners or joint venturers with each other.


                                       9
<PAGE>

     4.   RECORDS. The Advisor shall maintain appropriate books of account and
records relating to services performed hereunder, which shall be accessible for
inspection by the Company at any time during ordinary business hours.

     5.   REIT QUALIFICATIONS. Notwithstanding any other provision of this
Agreement to the contrary, the Advisor shall refrain from any action which, in
its reasonable judgment or in any judgment of the Board of Directors of which
the Advisor has written notice, would adversely affect the qualification of the
Company as a REIT under the Code or which would violate any law, rule or
regulation of any governmental body or agency having jurisdiction over the
Company or its securities, or which would otherwise not be permitted by the
Articles of Incorporation. If any such action is ordered by the Board of
Directors, the Advisor shall promptly notify the Board of Directors of the
Advisor's judgment that such action would adversely affect such status or
violate any such law, rule or regulation or the Articles of Incorporation and
shall refrain from taking such action pending further clarification or
instruction from the Board of Directors.

     6.   BANK ACCOUNTS. At the direction of the Board of Directors, the Advisor
may establish and maintain bank accounts in the name of the Company, and may
collect and deposit into and disburse from such accounts moneys on behalf of the
Company, upon such terms and conditions as the Board of Directors may approve,
provided that no funds in any such account shall be commingled with funds of the
Advisor. The Advisor shall from time to time, as the Company may require, render
appropriate accountings of such collections, deposits and disbursements to the
Board of Directors and to the auditors of the Company.

     7.   FIDELITY BOND. The Advisor shall not be required to obtain or maintain
a fidelity bond in connection with the performance of its services hereunder.

     8.   INFORMATION FURNISHED ADVISOR. The Board of Directors will keep the
Advisor informed in writing concerning the investment and financing policies of
the Company. The Board of Directors shall notify the Advisor promptly in writing
of its intention to make any investments or to sell or dispose of any existing
investments. The Company shall furnish the Advisor with a certified copy of all
financial statements, a signed copy of each report prepared by independent
certified public accountants, and such other information with regard to its
affairs as the Advisor may reasonably request.

     9.   COMPENSATION. The Advisor and its Affiliates shall be paid for
services rendered by the Advisor under this Agreement as follows:

          (a)  Acquisition Expenses, for the expenses attendant to Property
          acquisitions, in an aggregate amount not in excess of 0.5% of (i) the
          Gross Offering Proceeds, (ii) the gross proceeds from the sale of up
          to 4,000,000 Shares pursuant to the Company's Distribution
          Reinvestment Program, and (iii) the gross proceeds from the issuance
          and exercise of the Soliciting Dealer Warrants, PROVIDED THAT the
          Acquisition Expenses respecting any specific Property acquired by the
          Company shall not exceed 6% of the gross purchase price of that
          Property;


                                       10
<PAGE>

          (b)  An Advisor Asset Management Fee of not more than 1% of the
          Average Invested Assets. This fee will be payable quarterly in an
          amount equal to one fourth of 1% of the Average Invested Assets of the
          Company as of the last day of the immediately preceding quarter. For
          any year in which the Company qualifies as a REIT, the Advisor may be
          required to reimburse the Company certain sums as described in
          Section 14;

          (c)  Reimbursement for the cost to the Advisor and its Affiliates for:
          (i) the cost to the Advisor or its Affiliates of goods and services
          used for and by the Company and obtained from unaffiliated parties;
          and (ii) administrative services related thereto. "Administrative
          Services" include ministerial services such as typing, record keeping,
          preparation and dissemination of Company reports, preparation and
          maintenance of records regarding Stockholders, record keeping and
          administration of the Company's Distribution Reinvestment and Share
          Repurchase Programs, preparation and dissemination of responses to
          Stockholder inquiries and other communications with Stockholders and
          any other record keeping required for Company purposes. Such
          reimbursements are subject to limitations imposed by Sections 10(b)
          and (c) hereof;

          (d)  An Incentive Advisory Fee equal to 15% of the remaining proceeds
          from the sale of Real Properties after the Stockholders have first
          received: (i) their Cumulative Return; and (ii) the return of their
          Invested Capital. At such time as the business of the Advisor is
          acquired by or consolidated into the Company pursuant to Section 12
          hereof, the Incentive Advisory Fee shall also terminate;

          (e)  A Property Disposition Fee, payable upon the sale of a Real
          Property equal to the lesser of: (i) 3% of the contracted for sales
          price of the Real Property or (ii) 50% of the commission paid to third
          parties which is reasonable, customary and competitive in light of the
          size, type and location of such property ("Competitive Real Estate
          Commission"). The amount paid to the Advisor, when added to the sums
          paid to unaffiliated parties, shall not exceed the lesser of the
          Competitive Real Estate Commission or an amount equal to 6% of the
          contracted for sales price. Payment of such Property Disposition Fee
          shall be made only if the Advisor provides a substantial amount of
          services in connection with the sale of the particular parcel(s) of
          Real Property; and

          (f)  The compensation and reimbursements paid by the Company to the
          Advisor and its Affiliates shall be approved by a majority of the
          Directors (including a majority of the Independent Directors), as
          being fair and reasonable to the Company and not less favorable to the
          Company than would be available from an unaffiliated source.


                                       11
<PAGE>

     10.  COMPENSATION FOR ADDITIONAL SERVICES, CERTAIN LIMITATIONS.

          (a)  If the Company shall request the Advisor or its Affiliates to
          render services for the Company other than those required to be
          rendered by the Advisor hereunder, such additional services, if
          performed, will be compensated separately on terms to be agreed upon
          between such party and the Company from time to time in accordance
          with this Section. The rate of compensation for such services and any
          reimbursements to be paid by the Company to the Advisor and its
          Affiliates shall be approved by a majority of the Board of Directors,
          including a majority of the Independent Directors, as being fair and
          reasonable to the Company and not less favorable to the Company than
          would be available from an unaffiliated source.

          (b)  In extraordinary circumstances fully justified to the official or
          agency administering the appropriate state securities laws, the
          Advisor and its Affiliates may provide other goods and services to the
          Company if all of the following criteria are met: (i) the goods or
          services must be necessary to the prudent operation of the Company;
          (ii) the compensation, price or fee must be equal to the lesser of 90%
          of the compensation, price or fee the Company would be required to pay
          to independent parties who are rendering comparable services or
          selling or leasing comparable goods on competitive terms in the same
          geographic location, or 90% of the compensation, price or fee charged
          by the Advisor or its Affiliates for rendering comparable services or
          selling or leasing comparable goods on competitive terms; and (iii) if
          at least 95% of gross revenues attributable to the business of
          rendering such services or selling or leasing such goods are derived
          from persons other than Affiliates, the compensation, price or fee
          charged by an unaffiliated person who is rendering comparable services
          or selling or leasing comparable goods must be on competitive terms in
          the same geographic location. Extraordinary circumstances shall be
          presumed only when there is an emergency situation requiring immediate
          action by the Advisor or its Affiliates and the goods or services are
          not immediately available from unaffiliated parties. Services which
          may be performed in such extraordinary circumstances include emergency
          maintenance of Company properties, janitorial and other related
          services due to strikes or lockouts, emergency tenant evictions and
          repair services which require immediate action, as well as operating
          and releasing properties with respect to which the leases are in
          default or have been terminated.

          (c)  Permitted reimbursements shall include salaries and related
          salary expenses for nonsupervisory services which could be performed
          directly for the Company by independent parties such as legal,
          accounting, transfer agent, data processing and duplication.

     The Advisor believes that the employees of the Advisor and its Affiliates
who may perform services for the Company for which reimbursement is allowed
pursuant to Section 10(b) or 10(c), will have the experience and educational
background, in their respective fields of expertise, appropriate for the
performance of any such services.


                                       12
<PAGE>

     11.  STATEMENTS. The Advisor shall furnish to the Company not later than
the 10th day of each calendar quarter, beginning with the second calendar
quarter of the term of this Agreement, a statement showing the computation of
any Advisor Asset Management Fee payable to it during such quarter under
Section 9 hereof. The Advisor shall furnish to the Company not later than the
30th day following the end of each Fiscal Year, a statement showing a
computation of: (i) the Incentive Advisory Fee, if any, payable in respect of
such Fiscal Year under Section 9 hereof; and (ii) the fees or other compensation
payable to the Advisor or an Affiliate of the Advisor with respect to such
Fiscal Year under Sections 9 and 10 hereof. The final settlement or compensation
payable under Sections 9 and 10 hereof for each Fiscal Year shall be subject to
adjustments in accordance with, and upon completion of, the annual audit of the
Company's financial statements.

     12.  BUSINESS COMBINATION OF THE COMPANY AND THE ADVISOR. The Company shall
have the option at any time after February 11, 2002, upon prior written notice,
during the term of this Agreement without any consent of the Advisor or its
Board of Directors or shareholders to cause the business conducted by the
Advisor (including all of its assets) to be acquired by or consolidated into the
Company. In such event, the Advisor and/or its respective shareholders will
receive in connection with such an acquisition and in exchange for terminating
this Agreement and the release or waiver of all fees payable under the
provisions of this Agreement until its stated termination, but not paid, a
determinable number of Shares. The Company will be obligated to pay any fees
accrued under this agreement for services rendered through the closing of such
acquisition.

     The number of Shares to be issued by the Company to the Advisor shall be
determined as follows. The Company shall first send notice (the "Election
Notice") to the Advisor of its election to proceed with such a transaction.
Next, the net income of the Advisor, for the six month period immediately
preceding the month in which the Election Notice is delivered, as determined by
an independent audit conducted in accordance with generally accepted auditing
standards, shall be annualized. The Advisor shall bear the cost of any such
audit. Such amount shall then be multiplied by ninety percent (90%) and then
divided by the "Funds from Operations per Weighted Average Share" of the
Company. "Funds from Operations per Weighted Average Share" shall be equal to
the annualized Funds from Operations (I.E. four times the Funds from Operations
for the quarter immediately preceding the delivery of the Election Notice) per
weighted average Share for the Company for such quarter, all based upon the
quarterly report of the Company delivered to Stockholders for such quarter. The
resulting quotient shall constitute the number of Shares to be issued by the
Company to the Advisor or its shareholders, with delivery thereof and the
closing of the transaction to occur within 90 days of delivery of the Election
Notice. Any such transaction will occur, if at all, only if the Board obtains a
fairness opinion from a recognized financial advisor or institution providing
valuation services to the effect that the consideration to be paid therefor is
fair, from a financial point of view, to the Stockholders of the Company.

     The Company shall not terminate this Agreement solely for the purpose of
avoiding such a business combination, such as in anticipation of the listing of
the Shares on a national stock exchange or their inclusion in a national market
system.

     13.  EXPENSES OF THE COMPANY. The Company shall pay all of its expenses and
shall reimburse the Advisor for its expenses as provided in Sections 9 and 10
hereof and, without limiting


                                       13
<PAGE>

the generality of the foregoing, it is agreed that the following expenses of the
Company shall be paid by the Company:

          (a)  To the extent the Advisor is not expressly required to pay such
          expenses pursuant to this Agreement, salaries and other employment
          expenses of the personnel employed by the Company, Directors' fees and
          expenses incurred in attending Directors meetings, travel and other
          expenses incurred by Directors, officers and employees of the Company
          and the cost of Directors' liability insurance;

          (b)  The cost of borrowed moneys;

          (c)  All taxes applicable to the Company;

          (d)  Legal, accounting, auditing, underwriting, brokerage, listing,
          registration and other expenses and taxes incurred in connection with
          the organization or termination of the Company, the issuance,
          distribution, transfer, registration and stock exchange or quotation
          system listing of the Company's securities;

          (e)  Fees and expenses paid to advisors, independent contractors, the
          Management Agent, consultants, managers and other agents employed
          directly by the Company or by the Advisor at the Company's request for
          the account of the Company or by Affiliates of the Advisor, as
          provided above;

          (f)  Expenses in connection with the acquisition, disposition, leasing
          and ownership of investments, including to the extent not paid by
          others, but not limited to, legal fees and other expenses of
          professional services, maintenance, repair and improvement of property
          and brokerage and sales commissions, expenses of maintaining and
          managing Real Property equity interests (including the fees and
          charges of the Management Agent);

          (g)  All insurance costs incurred in connection with the Company;

          (h)  Expenses connected with payments of dividends or interest or
          distributions in cash or in any form made or caused to be made by the
          Board of Directors to holders of securities of the Company;

          (i)  All expenses connected with communications to holders of
          securities of the Company and the other bookkeeping and clerical work
          necessary in maintaining relations with holders of securities and in
          complying with the continuous reporting and other requirements of
          governmental bodies or agencies, including the cost of printing and
          mailing certificates for securities and proxy solicitation materials
          and reports to holders of the Company's securities;

          (j)  Transfer agent and registrar's fees and charges; and


                                       14
<PAGE>

          (k)  Expenses relating to any office or office facilities maintained
          by the Company separate from the office or offices of the Advisor.

     14.  REIMBURSEMENT BY ADVISOR. The Advisor shall be obligated to reimburse
the Company in the following circumstances:

          (a)  On or before the 15th day after the completion of the annual
          audit of the Company's financial statements for each Fiscal Year, the
          Advisor will reimburse the Company for the amounts, if any, (i) by
          which the Total Operating Expenses (including the Advisor Asset
          Management Fee) of the Company for such Fiscal Year exceeded the
          greater of: (a) 2% of the total of the Company's Average Invested
          Assets for such Fiscal Year; or (b) 25% of the Net Income for such
          Fiscal Year; PLUS (ii) equal to any deficit between the total amount
          of distributions to Stockholders for such Fiscal Year and the Current
          Return; provided, however, that the Company may instead permit such
          reimbursements to be effected by a reduction in the amount of the
          monthly payments of compensation under Section 9(a) hereof during the
          balance of the Fiscal Year next following the Fiscal Year with respect
          to which such reimbursement is to be made; and provided, further, that
          only so much of such excess specified in clause (i) of this paragraph
          (a) need be reimbursed as the Board of Directors, including a majority
          of the Independent Directors of the Company, shall determine should
          justifiably be reimbursed in light of such unanticipated, unusual or
          nonrecurring factors as may have occurred within 60 days after the end
          of an fiscal quarter of the Company for which Total Operating Expenses
          (for the 12 months then ended) exceeded 2% of Average Invested Assets
          or 25% of Net Income, whichever is greater, and there shall be sent to
          the Stockholders a written disclosure of such fact, together with an
          explanation of the factors the Independent Directors considered in
          arriving at the conclusion that such higher Total Operating Expenses
          were justified.

          (b)  If the aggregate of all Offering Expenses attendant to the
          Offering (including Selling Commissions and the Marketing Contribution
          and Due Diligence Expense Allowance) should exceed 15% of the Gross
          Offering Proceeds OR if the aggregate of all Offering Expenses
          (excluding any Selling Commissions) should exceed 5.5% of the Gross
          Offering Proceeds, the Advisor shall pay directly and/or cause its
          Affiliates to pay directly any such excess Offering Expenses incurred
          by the Company and the Company will have no liability for such excess
          expenses.

     15.  OTHER ACTIVITIES OF THE ADVISOR. Nothing herein contained shall
prevent the Advisor or an Affiliate of the Advisor from engaging in any other
business or activity including the rendering of services and investment advice
with respect to real estate investment opportunities to any other person or
entity and the management of other investments (including the investments of the
Advisor and its Affiliates).


                                       15
<PAGE>

     Directors, officers, employees and agents of the Advisor or of Affiliates
of the Advisor may serve as Directors, trustees, officers, employees or agents
of the Company, but shall receive no compensation (other than reimbursement for
expenses) from the Company for such service.

     16.  TERM; TERMINATION OF AGREEMENT. This Agreement shall have an initial
term of one year 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 before the expiration of this Agreement or of any
extension thereof.

     Notwithstanding any other provision of the Agreement to the contrary,
either the Company or the Advisor may terminate this Agreement, or any extension
hereof, or the parties by mutual consent or a majority of the Independent
Directors may do so, in each case upon 60 days written notice without cause or
penalty. In the event of the termination of the Agreement, the Advisor will
cooperate with the Company and take all reasonable steps requested to assist the
Board of Directors in making an orderly transition of the advisory function.

     This Agreement shall terminate upon the consummation of a business
combination involving the Advisor and the Company as described in Section 12.

     If this Agreement is terminated pursuant to this Section, such termination
shall be without any further liability or obligation of either party to the
other, except as provided in Section 19.

     If this Agreement is terminated for any reason other than a business
combination involving the Advisor and the Company as described in Section 12,
all obligations of the Advisor and its Affiliates to offer Property to the
Company for purchase, as described in Section 2(a), shall also terminate.

     17.  ASSIGNMENTS. The Company may terminate this Agreement in the event of
its assignment by the Advisor except an assignment to a successor organization
which acquires substantially all of the property and carries on the affairs of
the Advisor, provided that following such assignment the persons who controlled
the operations of the Advisor immediately prior thereto all control the
operations of the successor organization, including the performance of its
duties under this Agreement; however, if at any time subsequent to such
assignment such persons shall cease to control the operations of the successor
organization, the Company may thereupon terminate this Agreement. This Agreement
shall not be assignable by the Company without the consent of the Advisor,
except in the case of assignment by the Company to a corporation, trust or other
organization which is a successor to the Company. Any assignment of this
Agreement shall bind the assignee hereunder in the same manner as the assignor
is bound hereunder.

     18.  DEFAULT, BANKRUPTCY, ETC. At the option solely of the Company, this
Agreement shall be terminated immediately upon written notice of termination
from the Board of Directors to the Advisor if any of the following events
occurs:


                                       16
<PAGE>

          (a)  The Advisor violates any provisions of this Agreement and after
          notice of such violation shall not cure such default within 30 days;
          or

          (b)  A court of competent jurisdiction enters a decree or order for
          relief in respect of the Advisor 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 Advisor
          or for any substantial part of its property or orders the winding up
          or liquidation of the Advisor's affairs; or

          (c)  The Advisor 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 Advisor 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 Advisor agrees that if any of the events specified in subsections(b)
and (c) of this Section 18 occur, it will give written notice thereof to the
Company within seven days after the occurrence of such event.

     19.  ACTION UPON TERMINATION. The Advisor 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. Subject to the provisions of Section 12, the Advisor shall
forthwith upon a termination caused by factors other than the listing for
trading of the Shares on a national stock exchange or market:

          (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 its expenses to which it is
          then entitled;

          (b)  Deliver to the Board of Directors a full accounting, including a
          statement showing all payments collected by it and a statement of all
          money held by it, covering the period following the date of the last
          accounting furnished to the Board of Directors;

          (c)  Deliver to the Board of Directors all property and documents of
          the Company then in the custody of the Advisor; and

          (d)  Cooperate with the Company and take all reasonable steps
          requested by the Company to assist the Board of Directors in making an
          orderly transition of the Advisory function.


                                       17
<PAGE>

     20.  CHANGE OF NAME. The Company recognizes that the name and mark "Inland"
have established prestige and goodwill and have acquired valuable secondary
meanings in the real estate and related industries and in the mind of the
public. The Company desires to associate itself with and benefit from the
"Inland" name, and in consideration of the grant by the Advisor and its
Affiliates of a perpetual royalty free license to the Company (which license has
been authorized), subject to the conditions set forth in this Section 20, to use
the name and mark "Inland" in connection with a real estate investment trust
throughout the United States, its territories and possessions, the Company
agrees that:

          (a)  The value of the "Inland" name cannot be reasonably and
          adequately compensated for in damages in action at law and
          unauthorized use of the "Inland" name will cause irreparable injury
          and damage to the Advisor and its Affiliates. The Advisor or its
          Affiliates shall be entitled as a matter of right to injunctive relief
          to prevent the use of the "Inland" name by the Company in the event of
          the circumstances described in Subsection (d) below.

          (b)  The Company agrees to use the "Inland" name and mark in a manner
          which will protect the right of the Advisor and its Affiliates therein
          and such use shall be as licensee for the account and benefit of the
          Advisor and its Affiliates. To the extent any rights in the name or
          mark "Inland" are deemed to accrue to the Company, the Company hereby
          assigns any and all such rights to the Advisor and its Affiliates at
          such time as they may be deemed to accrue.

          (c)  Nothing contained in this Agreement shall be construed an
          assignment or grant to the Company of any right, title or interest in
          or to the name or mark "Inland" or any other trademarks, trade names
          or related service marks, insignias, logos, designs and color schemes,
          it being understood that all rights relating thereto are reserved by
          the Advisor and its Affiliates, except for the license hereunder to
          the Company of the rights to use the name or mark as specifically and
          expressly provided herein. The Company agrees to cooperate fully and
          in good faith with the Advisor and its Affiliates, at the expense of
          the Advisor and its Affiliates, in securing and preserving the rights
          of the Advisor and its Affiliates in and to the name and mark "Inland"
          and to assist the Advisor and its Affiliates in executing and causing
          to be recorded such documents as may be necessary or desirable to
          evidence, protect and implement the rights of the Advisor and its
          Affiliates pursuant to this Agreement.

          (d)  At such time as the Advisor is no longer providing services to
          the Company pursuant to this Agreement for some reason other than the
          consummation of a business combination described in Section 12, the
          Board of Directors will upon the request of the Advisor and its
          Affiliates, promptly cause the name of the Company to be changed in
          perpetuity to a name which does not include any reference to the name
          "Inland" or any successor thereof. Without limiting the generality of
          the foregoing, upon termination of this Agreement by either party for
          some reason other than the consummation of a business combination
          described in Section 12, the Board


                                       18
<PAGE>

          of Directors will promptly cause the name of the Company to be changed
          in perpetuity to a name which does not include any references to the
          name "Inland" or any successor thereof.

     21.  AMENDMENTS. This Agreement shall not be amended, changed, modified,
terminated or discharged in whole or in part except by an instrument in writing
signed by both parties hereto, or their respective successors or assigns, or
otherwise provided herein.

     22.  SUCCESSORS AND ASSIGNS. This Agreement shall bind any successors or
assigns of the parties hereto as herein provided.

     23.  GOVERNING LAW. The provisions of this Agreement shall be governed,
construed and interpreted in accordance with the laws of the State of Illinois
as at the time in effect.

     24.  LIABILITY AND INDEMNIFICATION.

          (a)  The Company shall, to the fullest extent permitted by Maryland
          statutory or decisional law, as amended or interpreted, and, without
          limiting the generality of the foregoing, in accordance with Section
          2418 of the General Corporation Law of Maryland, indemnify and pay or
          reimburse reasonable expenses to the Advisor and its Affiliates,
          provided, that: (i) the Advisor or other party seeking indemnification
          has determined, in good faith, that the course of conduct which caused
          the loss or liability was in the best interests of the Company; (ii)
          the Advisor or other person seeking indemnification was acting on
          behalf of or performing services on the part of the Company; (iii)
          such liability or loss was not the result of negligence or misconduct
          on the part of the indemnified party; and (iv) such indemnification or
          agreement to be held harmless is recoverable only out of the assets of
          the Company and not from the Stockholders thereof.

          (b)  The Company shall not indemnify the Advisor or its Affiliates for
          losses, liabilities or expenses arising from or out of an alleged
          violation of federal or state securities laws by such party 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 indemnitee; (ii) such
          claims have been dismissed with prejudice on the merits by a court of
          competent jurisdiction as to the particular indemnitee; or (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 may advance amounts to persons entitled to
          indemnification hereunder for legal and other expenses and costs
          incurred as a result of any legal


                                       19
<PAGE>

          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 indemnified part 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 such advancement; and
          (iii) the indemnified party receiving such advances undertakes to
          repay the advanced funds to the Company, together with the applicable
          legal rate of interest thereon, in any case(s) in which such party is
          found not to be entitled to indemnification.

     25.  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:

          The Company and/or the Board of Directors:
               Inland Retail Real Estate Trust, Inc.
               2901 Butterfield Road
               Oak Brook, Illinois 60523
               Attention: Ms. Roberta S. Matlin, Vice President

          The Advisor:

               Inland Retail Real Estate Advisory Services, Inc.
               2901 Butterfield Road
               Oak Brook, Illinois 60523
               Attention: President

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 25.

     26.  CONFLICTS OF INTEREST AND FIDUCIARY DUTIES TO THE COMPANY AND TO THE
COMPANY'S STOCKHOLDERS. The Company and the Advisor recognize that their
relationship is subject to various conflicts of interest as set forth in the
Prospectus. The Advisor, on behalf of itself and its Affiliates, acknowledges
that the Advisor and its Affiliates have fiduciary duties to the Company and to
the Company's Stockholders. The Advisor, on behalf of itself and its Affiliates,
represents and agrees (i) that the Advisor and its Affiliates will endeavor to
balance the interests of the Company with the interests of the Advisor and its
Affiliates in making any determination where a conflict of interest exists
between the Company and the Advisor or its Affiliates; and (ii) that the actions
and decisions of the Advisor and its Affiliates under this Agreement (including
but not limited to actions and decisions in connection with the purchase of
Properties for the Company) will be made in the manner most favorable to the
Company and to the Company's Stockholders, so as not to breach their respective
fiduciary duties to the Company and to the Company's Stockholders.


                                       20
<PAGE>

     27.  HEADINGS. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.



                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                       21
<PAGE>

     IN WITNESS WHEREOF, the undersigned have executed this First Amended and
Restated Advisory Agreement as of the date first above written.

                              COMPANY:

                              Inland Retail Real Estate Trust, Inc.

                              By: /s/ Roberta S. Matlin
                                 -----------------------------------------
                              Title: Vice President


                              ADVISOR:

                              Inland Retail Real Estate Advisory Services, Inc.


                              By: /s/ Robert D. Parks
                                 -----------------------------------------
                              Title: President




                                       22