Document:

EXHIBIT 10.2.2

 

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
APARTMENT 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 apartment
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 apartment 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 

 

 

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;

 

4

 

(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 Apartment 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.

 

6

 

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 APARTMENT

  MANAGEMENT LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Brenda
  G. Gujral

  	
   

  	
  By:

  	
  /s/ Thomas
  P. McGuinness

  	
   

  
	
  Name:

  	
  Brenda G.
  Gujral

  	
   

  	
  Name:

  	
  Thomas P.
  McGuinness

  	
   

  
	
  Its:

  	
  President

  	
   

  	
  Its:

  	
  CEO

  	
   

  

 

 

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 APARTMENT 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.

 

A-1

 

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

 

A-2

 

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,

 

A-3

 

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.

 

A-4

 

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

 

A-5

 

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,

 

A-6

 

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,

 

A-7

 

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

 

A-8

 

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.

 

A-9

 

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 Apartment Management LLC 

  
	
   

  	
   

  	
  2901 Butterfield Road

  Oak Brook, IL 60523 

  
	
   

  	
   

  	
  Attention:

  	
  Thomas P. McGuinness 

  
	
   

  	
   

  	
  Telephone:

  	
  (630) 218-8000 

  
	
   

  	
   

  	
  Facsimile:

  	
  (630) 218-4955

  
	
   

  	
   

  	
   

  

 

[THE
REMAINDER OF THIS PAGE INTENTIONALLY BLANK]

 

A-10

 

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 APARTMENT

  MANAGEMENT LLC, a Delaware limited

  liability company

  	
  INLAND AMERICAN REAL ESTATE TRUST, INC.,

  a Maryland corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:EXHIBIT 10.2.3

 

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
INDUSTRIAL 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 industrial
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 industrial 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

 

 

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.

 

2

 

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.

 

3

 

(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;

 

4

 

(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

 

5

 

(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 Industrial 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.

 

6

 

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]

 

7

 

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 INDUSTRIAL

  MANAGEMENT LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Brenda G. Gujral

  	
   

  	
  By:

  	
  /s/ Thomas P. McGuinness

  	
   

  
	
  Name:

  	
  Brenda G. Gujral

  	
   

  	
  Name:

  	
  Thomas P. McGuinness

  	
   

  
	
  Its:

  	
  President

  	
   

  	
  Its:

  	
  CEO

  	
   

  

 

 

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 INDUSTRIAL 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.

 

A-1

 

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

 

A-2

 

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,

 

A-3

 

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.

 

A-4

 

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

 

A-5

 

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,

 

A-6

 

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,

 

A-7

 

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

 

A-8

 

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.

 

A-9

 

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 Industrial Management LLC

  2901 Butterfield Road

  Oak Brook, IL  60523  

  
	
   

  	
   

  	
  Attention:

  	
  Thomas P. McGuinness

  
	
   

  	
   

  	
  Telephone:

  	
  (630) 218-8000

  
	
   

  	
   

  	
  Facsimile:

  	
  (630) 218-4955

  

 

[THE
REMAINDER OF THIS PAGE INTENTIONALLY BLANK]

 

A-10

 

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 INDUSTRIAL

  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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