Document:

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                                                                    EXHIBIT 10.3

                           MASTER MANAGEMENT AGREEMENT

         This Master Management Agreement (this "Agreement") is entered into as
of the 11th day of February, 1999, by and between Inland Retail Real Estate
Trust, Inc., a Maryland corporation (the "Company") and Inland Southeast
Property Management Corp., a Delaware corporation (the "Manager").

                                   WITNESSETH

         WHEREAS, the Company intends to qualify 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"), and to make investments of the type
permitted to qualified REITs under the Code and not inconsistent with the
Articles of Incorporation of the Company, as amended (the "Articles") and the
Bylaws of the Company, as amended (such investments being referred to herein
collectively as the "Properties" and individually as a "Property"); and

         WHEREAS, the Company desires to avail itself of the services,
experiences, sources of information, advice and assistance of the Manager and to
have the Manager manage the Properties and undertake the duties and
responsibilities hereinafter set forth; and

         WHEREAS, the Manager is willing to undertake and render such services,
on the terms and conditions herein set forth.

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

         1. The Company will hire the Manager to manage each of its Properties.
The engagement of the Manager by the Company for each Property shall be pursuant
to the terms of a separate Management Agreement in the form of Exhibit A
attached hereto (the "Form Agreement").

         2. The Manager will manage each of the Properties acquired by the
Company, according to the terms of the Form Agreement.

         3. The initial term of the Management Agreement with respect to each
Property shall commence on the date of acquisition of such Property by the
Company and shall end on December 31st of the year in which such acquisition
occurred, with the three successive three year renewal periods occurring
immediately thereafter.

         4. The parties may mutually agree to vary the terms of the Form
Agreement for any or all of the Properties or to not enter into a Form Agreement
with respect to any Property.

         5. The Company shall have the option at any time after three years from
the initial date of effectiveness of the initial final Prospectus of the Company
for its initial public offering, upon prior written notice, during the term of
this Agreement without any consent of the Manager or its Board of Directors or
shareholders to cause the business conducted by the Manager (including all of
its assets) to be acquired by or consolidated into the Company. In such event,
the Manager and/or its respective shareholders will receive in connection with
such an acquisition and in exchange for

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terminating this Agreement and all Management Agreements entered into pursuant
hereto and the release or waiver of all fees payable under the provisions of
this Agreement and all Management Agreements entered into pursuant hereto until
its and their stated terminations, but not paid, a determinable number of shares
of common stock of the Company (the "Shares"). The Company will be obligated to
pay any fees accrued under this Agreement and all Management Agreements entered
into pursuant hereto for services rendered through the closing of such
acquisition.

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

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

         6. This Agreement shall be binding on successors and permitted assigns
of the parties. This Agreement may not be assigned by either party without the
prior written consent of the other party. This Agreement shall be effective as
of the date hereof and shall remain in effect until the earlier to occur of (A)
the event described in paragraph 5 hereof, or (B) December 31, 2020.

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         7. All notices required or permitted to be given hereunder shall be in
writing and shall be delivered at the following addresses of the parties
thereto:

            THE COMPANY:
            Inland Retail Real Estate Trust, Inc.
            2901 Butterfield Road
            Oak Brook, IL 60523
            Attn:  President
            THE MANAGER:
            Inland Southeast Property Management Corp.
            4812 South Tamiami Trail
            Sarasota, FL  34231
            Attn: Steven D. Sanders
            With a copy to:
            Robert H. Baum, Esq.
            2901 Butterfield Road
            Oak Brook, IL 60523

         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.

                                  THE COMPANY:
                                  Inland Retail Real Estate Trust, Inc.
                                  By:    /s/ Robert D. Parks
                                     ---------------------------------------
                                  Its:   Chairman
                                     ---------------------------------------

                                  THE MANAGER:
                                  Inland Southeast Property Management Corp.
                                  By:    /s/  Robert M. Barg
                                     ---------------------------------------
                                  Its:   Secretary/Treasurer
                                     ---------------------------------------

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                             CONSENT OF SHAREHOLDERS

The undersigned, being all of the shareholders of Inland Southeast Property
Management Corp. (the "Manager") hereby consent to the Manager entering into the
foregoing Master Management Agreement, and specifically agree to the provisions
of paragraph 5 thereof, as of the date of the

                          Master Management Agreement.

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                                                                EXHIBIT 10.3(a)

                               FIRST AMENDMENT TO
                           MASTER MANAGEMENT AGREEMENT

         This is the First Amendment dated as of March 4, 1999 (this "First
Amendment") to that certain Master Management Agreement (the "Agreement") dated
as of February 11, 1999, by and between Inland Retail Real Estate Trust, Inc., a
Maryland corporation (the "Company") and Inland Southeast Property Management
Corp., a Delaware corporation (the "Manager").

         WHEREAS, the Company and the Manager have agreed to revise their
respective termination rights in paragraph 1 of the Form Agreement.

         NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, and for good and valuable consideration, the receipt, adequacy and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:

         1. The Form Agreement attached as Exhibit A to the Agreement is hereby
deleted, and the form of Management Agreement attached as Exhibit A to this
First Amendment is hereby substituted in lieu thereof.

         2. Capitalized terms used herein shall have the same meaning as in the
Agreement.

         3. The term the "Agreement" shall hereafter mean the Agreement as
amended by this First Amendment.

         4. Except as amended by this First Amendment, the Agreement shall
remain in full force and effect.

         IN WITNESS WHEREOF, the undersigned have executed and delivered this
First Amendment as of the date first above written.

THE COMPANY:                          THE MANAGER:
INLAND RETAIL REAL ESTATE TRUST, INC. INLAND SOUTHEAST PROPERTY MANAGEMENT CORP.

By:         /s/ Robert D. Parks       By:          /s/ Robert M. Barg
       -----------------------------         -----------------------------------
Its:        Chairman                  Its:         Secretary/treasurer
       -----------------------------         -----------------------------------

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                                  EXHIBIT A TO

                 FIRST AMENDMENT TO MASTER MANAGEMENT AGREEMENT

                              MANAGEMENT AGREEMENT

         IN CONSIDERATION of the mutual covenants and agreements herein
contained, Inland Retail Real Estate Limited Partnership, an Illinois limited
partnership ("OWNER") and Inland Southeast Property Management Corp., a Delaware
corporation ("MANAGER"), agree as follows:

         1. OWNER hereby employs the MANAGER exclusively to rent, lease, operate
and manage the property commonly known as __________________ Shopping Center 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 the ____ day of
_____________, 20__ and ending on the 31st day of December, 20__ and thereafter
for three successive three year renewal periods, with the first such three year
renewal period commencing on January 1st of __________ and ending on December
31st of ___________, unless on or before ninety (90) but not less than sixty
(60) days prior to the date last above mentioned or on or before ninety (90) but
not less than sixty (60) days prior to the expiration of any such renewal
period, MANAGER or OWNER shall notify the other party hereto in writing that it
elects to terminate this Agreement, in which case this Agreement shall be
thereby terminated on said last mentioned date. In addition, and notwithstanding
the foregoing, OWNER may terminate this Agreement at any time upon delivery of
written notice to MANAGER not less than thirty (30) days prior to the effective
date of termination, in the event of (and only in the event of) a showing by
OWNER of willful misconduct, gross negligence, or deliberate malfeasance by
MANAGER in the performance of MANAGER'S duties hereunder or a specific default
in the performance of any obligation of MANAGER under this Agreement which has
not been cured within thirty (30) days after written notice to MANAGER from
OWNER; or immediately upon the occurrence of any of the following: (i) a decree
or order is rendered by a court having jurisdiction (A) adjudging MANAGER as
bankrupt or insolvent, or (B) approving as properly filed a petition seeking
reorganization, readjustment, arrangement, composition or similar relief for
MANAGER under the federal bankruptcy laws or any similar applicable law or
practice, or (C) appointing a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency of MANAGER or a substantial part of the property of
MANAGER, or for the winding up or liquidation of its affairs, or (ii) MANAGER
(A) institutes proceedings to be adjudicated a voluntary bankrupt or an
insolvent, (B) consents to the filing of a bankruptcy proceeding against it, (C)
files a petition or answer or consent seeking reorganization, readjustment,
arrangement, composition or relief under any similar applicable law or practice,
(D) consents to the filing of any such petition, or to the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or insolvency for it
or for a substantial part of its property, (E) makes an assignment for the
benefit of creditors, (F) is unable to or admits in writing its inability to pay
its debts generally as they become due unless such inability shall be the fault
of OWNER, or (G) takes corporate or other action in furtherance of any of the
aforesaid purposes. In the event this Agreement is terminated for any reason
prior to the expiration of its original term or any renewal term, the OWNER
shall indemnify, protect, defend, save and hold the MANAGER and all of its
shareholders, officers, directors, employees, agents, successors and assigns
(collectively,

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"Indemnified Parties") harmless from and against any and all claims, causes of
action, demands, suits, proceedings, loss, judgments, damage, awards, liens,
fines, costs, attorney's fees and expenses, of every kind and nature whatsoever
(collectively, "Losses"), which may be imposed on or incurred by the MANAGER by
reason of the willful misconduct, gross negligence and/or unlawful acts (such
unlawfulness having been adjudicated by a court of proper jurisdiction) of
OWNER.

         2.       THE 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 for the rental, leasing,
         operation and management of the Premises, and, without limiting the
         generality of the foregoing, the MANAGER agrees to be responsible for
         those specific duties and functions set forth in Section 3 hereof.
         MANAGER shall be entitled at all times to manage the Premises in
         accordance with the MANAGER'S standard operating policies and
         procedures, except to the extent that any specific provisions contained
         herein are to the contrary, in which case MANAGER shall manage the
         Premises consistent with such specific provisions. MANAGER agrees to
         use its best efforts to maintain the highest occupancy at the highest
         rents for each space comprising the Premises.

                  2.2 To render monthly reports for the Premises to the OWNER,
         to the attention of the individual and address as directed by the OWNER
         from time to time, and to remit to the OWNER the excess of Gross Income
         (as defined in Section 3.3 hereof) over expenses paid per Section 3.4
         hereof ("Net Proceeds") for each month on or before the 15th day of the
         following month. MANAGER will remit the Net Proceeds to the OWNER at
         the address as stated in Section 6.1 hereof. The reports to be
         submitted shall consist of the MANAGER'S Consolidated Cash Report and
         Budget Variance Report, (samples of which are attached as "Exhibit B")
         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.

                  2.3 In case the expenses paid per Section 3.4 hereof shall be
         in excess of the Gross Income for any monthly period, MANAGER shall
         notify OWNER of same and OWNER agrees to pay such excess immediately
         upon request from the MANAGER, but nothing herein contained shall
         obligate the MANAGER to advance its own funds on behalf of the OWNER.
         All advances by MANAGER on behalf of OWNER shall be paid to MANAGER by
         OWNER within ten (10) days after request.

                  2.4 To prepare annualized budgets for operation of the
         Premises and submit same to the OWNER for approval. Such budgets shall
         be for planning and informational purposes only, and the MANAGER shall
         have no liability to the OWNER for any failure to meet any such budget.
         However, MANAGER will use its best efforts to operate the Premises
         within the approved budget. The parties acknowledge that the first such
         annual budget has been prepared and approved for the year commencing
         _______________, 20__ and ending on

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         ______________, 20__. Notwithstanding the period covered by the first
         annual budget, all subsequent annual budgets shall cover the period
         from January 1st of each year through December 31st of such year. The
         proposed annual budget for each calendar year shall be submitted by
         MANAGER to the OWNER by December 1st of the year preceding the year for
         which it applies. OWNER shall notify MANAGER within fifteen (15) days
         as to whether OWNER has approved the proposed annual budget or not. If
         the OWNER disapproves the proposed budget, the OWNER shall notify the
         MANAGER of what, specifically, OWNER disapproves of, and the OWNER and
         MANAGER shall make the necessary amendments to the annual budget.
         During the time OWNER and MANAGER are preparing these amendments,
         MANAGER will continue to operate the Premises according to the last
         approved budget. The OWNER'S approval of the annual budget shall
         constitute approval for the MANAGER to expend sums for all budgeted
         expenditures, without the necessity to obtain additional approval of
         the OWNER under any other expenditure limitations as set forth
         elsewhere in this Agreement.

         3.       THE OWNER AGREES:

         And does hereby give the MANAGER the following exclusive authority and
powers (all of which shall be exercised in the name of MANAGER, as agent for the
OWNER) and the OWNER agrees to assume all expenses 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 and salaries, bonuses
         and other compensation of leasing personnel responsible for the leasing
         of the Premises; to cause references of prospective tenants to be
         investigated, it being understood and agreed by the parties hereto that
         the 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 MANAGER obtaining OWNER'S approval. The 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 the OWNER; to
         terminate tenancies and to sign and serve in the name of the OWNER of
         the Premises such notices as are deemed necessary by the MANAGER; to
         institute and prosecute actions to evict tenants and to recover
         possession of the Premises or portions thereof; with the OWNER'S
         authorization, to sue for in the name of the 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 which 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

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         operational expense of the Premises. MANAGER and OWNER shall concur on
         the selection of the attorney to handle such litigation.

                  3.2 To hire, supervise, discharge, and pay all labor required
         for the operation and maintenance of the Premises including but not
         limited to on site personnel, managers, assistant 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 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 MANAGER of the 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 have terms not to exceed three (3)
         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
         connection with the leases and service agreements relating to the
         Premises, and other services or such of them as the MANAGER may
         consider appropriate; and to purchase supplies and pay all bills.
         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 MANAGER. The OWNER hereby appoints MANAGER as OWNER'S
         authorized agent for the purpose of executing, as managing agent for
         said OWNER, all such contracts. In addition, the OWNER agrees to
         specifically assume in writing all obligations under all such contracts
         so entered into by the MANAGER, on behalf of the OWNER of the Premises,
         upon the termination of this Agreement and the OWNER shall indemnify,
         protect, save, defend and hold the MANAGER and all of its 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,
         attorney's fees and expenses, of every kind and nature whatsoever,
         resulting from, arising out of or in any way related to such contracts
         and which relate to or concern matters occurring after termination of
         this Agreement, but excluding matters arising out of MANAGER's willful
         misconduct, gross negligence and/or unlawful acts. MANAGER shall secure
         the approval of, and execution of appropriate contracts by, the OWNER
         for any non-budgeted and non-emergency/contingency capital items,
         alterations or other expenditures in excess of $5,000.00 for any one
         item, securing for each item at least three (3) written bids, if
         practicable, or providing evidence satisfactory to OWNER that the
         contract amount is lower than industry standard pricing, from
         responsible contractors. MANAGER shall have the right from time to time
         during the term hereof, to contract with and make purchases from
         subsidiaries and affiliates of the MANAGER, provided that contract
         rates and prices are competitive with

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         other available sources. The MANAGER may at any time and from time to
         time request and receive the prior written authorization of the OWNER
         of the Premises of any one or more purchases or other expenditures,
         notwithstanding that the 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 therefor and to
         deposit all such Gross Income collected hereunder in the MANAGER'S
         custodial account which the MANAGER will open and maintain, in a state
         or national bank of the 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 the OWNER) and managed by
         MANAGER. OWNER agrees that MANAGER shall be authorized to maintain a
         reasonable minimum balance (to be determined jointly from time to time)
         in such account. MANAGER may endorse any and all checks received in
         connection with the operation of the Premises and drawn to the order of
         the OWNER and the OWNER shall, upon request, furnish the MANAGER'S
         depository with an appropriate authorization for the MANAGER to make
         such endorsement.

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

                  3.5 Nothing in this Agreement shall be interpreted in such a
         manner as to obligate the MANAGER to pay from Gross Income, any
         expenses incurred by OWNER prior to the commencement of this Agreement,
         except to the extent the OWNER advances additional funds to pay such
         expenses.

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

                  3.7 The MANAGER shall not be required to advance any monies
         for the care or management of the Premises, and the OWNER agrees to
         advance all monies necessary therefor. If the MANAGER shall elect to
         advance any money in connection with the

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         Premises, the OWNER agrees to reimburse the MANAGER forthwith and
         hereby authorizes the MANAGER to deduct such advances from any monies
         due the OWNER.

                  3.8 In connection with any insured losses or damages, to
         handle all steps necessary regarding any such claim; provided that the
         MANAGER will not make any adjustments or settlements in excess of
         $10,000.00 without the 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 MANAGER as contained herein may be delegated by MANAGER and
         performed by a person or entity ("Submanager") with whom MANAGER
         contracts for the purpose of performing such duties. OWNER specifically
         grants MANAGER the authority to enter into such a contract with a
         Submanager; provided that OWNER shall have no liability or
         responsibility to any such Submanager for the payment of the
         Submanager's fee or for reimbursement to the Submanager of its expenses
         or to indemnify the Submanager in any manner for any matter; and
         provided further that MANAGER shall require such Submanager to agree,
         in the written agreement setting forth the duties and obligations of
         such Submanager, to indemnify the OWNER for all loss, damage or claims
         incurred by OWNER as a result of the willful misconduct, gross
         negligence and/or unlawful acts of the Submanager.

         4.       THE OWNER FURTHER AGREES:

                  4.1 To indemnify, defend, protect, save and hold the MANAGER
         and all of its shareholders, officers, directors, employees, agents,
         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, attorney's 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
         such indemnification shall not extend to any such Losses arising out of
         the willful misconduct, gross negligence and/or unlawful acts (such
         unlawfulness having been adjudicated by a court of proper jurisdiction)
         of 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 Insurance (if appropriate) and Boiler
         Insurance (if appropriate) naming the OWNER and the MANAGER as insureds
         and adequate to protect their interests and in form, substance, and
         amounts reasonably satisfactory to the MANAGER, and to furnish to the
         MANAGER certificates and policies evidencing the existence of such
         insurance. The premiums for all such insurance maintained by the OWNER
         shall be paid by either the OWNER directly or, provided sufficient
         Gross Income is available, by the MANAGER from such Gross Income.
         Unless the OWNER shall provide such insurance and furnish such
         certificate and policy within ten (10) days from the date of this
         Agreement, the MANAGER

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         may, in its sole discretion, but shall not be obligated to, place said
         insurance and charge the cost thereof to the account of the OWNER. All
         such insurance policies shall provide that the MANAGER shall receive
         thirty (30) days' written notice prior to cancellation of the policy.
         MANAGER shall not be liable for any error of judgment or for any
         mistake of fact or law, or for any thing which it may do or refrain
         from doing, except in cases of willful misconduct, gross negligence
         and/or unlawful acts (such unlawfulness having been adjudicated by a
         court of proper jurisdiction).

                  4.2 OWNER hereby warrants and represents to 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 MANAGER to liability or claims under the Comprehensive
         Environmental Response, Compensation and Liability Act of 1980 (42
         U.S.C.A. 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 MANAGER and all of its
         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, attorney's 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 MANAGER of hazardous
         substances on the Premises.

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

         5. THE OWNER AGREES TO PAY THE MANAGER, AS A MONTHLY MANAGEMENT FEE
HEREUNDER, an amount no greater than four and one half percent (4 1/2%) of Gross
Income for the month for which the payment is made, which shall be deducted
monthly by the MANAGER and retained by the MANAGER from Gross Income prior to
payment to OWNER of Net Proceeds. Such Management Fee shall be compensation for
those services specified herein. Any services beyond those specified herein,
such as sales brokerage, construction management, loan origination and
servicing, property tax reduction and risk management services, shall be
performed by MANAGER and compensated by OWNER only if the parties agree on the
scope of such work and provided that the compensation to be paid therefor will
not exceed 90% of that which would be paid to unrelated parties providing such
services and provided further that all such compensation must be approved by a
majority of the independent directors of OWNER. OWNER acknowledges

                                       7
<PAGE>

and agrees that MANAGER may pay or assign all or any portion of its Management
Fee to a Subagent as described in Section 3.9 hereof.

                  5.1 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 MANAGER hereunder. Whenever the
         notification and reporting to OWNER or the approval, consent or other
         action of OWNER is called for hereunder, any such notification and
         reporting if sent to or specified in writing to the OWNER'S
         Representative, and any such approval, consent or action if executed by
         OWNER'S Representative, shall be binding on OWNER. The OWNER'S
         Representative shall be:

                   Name                        Address
                   ----                        -------
                   Roberta S. Matlin           2901 Butterfield Road
                                               Oak Brook, Illinois  60523

         The OWNER'S Representative may be changed at the discretion of the
OWNER, at any time and from time to time, and shall be effective upon MANAGER'S
receipt of written notice of the new OWNER'S Representative.

                  6.2 The OWNER expressly withholds from the 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 the OWNER,
         other than expenses related to exercising the express powers above
         vested in the MANAGER without the prior written direction of the
         OWNER'S Representative, except such 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. The
         person identified above as the OWNER'S Representative (and any
         designated successor or successors to such OWNER'S Representative)
         shall be the OWNER'S exclusive representative for all purposes hereof,
         and the MANAGER shall have the absolute right to rely upon all
         decisions, approvals and directions of such person. Such representative
         shall have the right to designate a successor representative by written
         notice to the MANAGER.

                  6.3 The 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. MANAGER shall promptly forward to the OWNER any complaints,
         warnings, notices or summonses received by it relating to such matters.
         The OWNER represents that

                                       8
<PAGE>

         to the best of its knowledge the Premises and such equipment comply
         with all such requirements and authorizes the MANAGER to disclose the
         OWNER of the Premises to any such officials and agrees to indemnify,
         protect, defend, save and hold the 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
         the 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 MANAGER, in its sole and absolute
         discretion, considers that the action or position of the OWNER, with
         respect thereto may result in damage or liability to the MANAGER, the
         MANAGER shall have the right to cancel this Agreement at any time by
         written notice to the OWNER of its election so to do, which
         cancellation shall be effective upon the service of such notice. Such
         notice may be served personally or by registered mail, on or to the
         person named to receive the MANAGER'S monthly statement at the address
         designated for such person as provided in Paragraph 6.1 above, and if
         served by mail shall be deemed to have been served when deposited in
         the mails. Such cancellation shall not release the indemnities of the
         OWNER set forth in this Agreement, including, but not limited to, those
         set forth in Paragraphs 1, 3.2, 4.1, 4.2 and 6.3 above and shall not
         terminate any liability or obligation of the OWNER to the MANAGER for
         any payment, reimbursement, or other sum of money then due and payable
         to the MANAGER hereunder.

                  6.5 All personnel expenses, including but not limited to,
         wages, salaries, insurance, fringe benefits, employment related taxes
         and other governmental charges, shall be charges incurred in connection
         with the Premises for purposes of Paragraph 3.4 hereof, to the extent
         such expenses are apportioned by the 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 MANAGER to be
         appropriate for the proper operation of the Premises; provided that the
         OWNER may request changes in the number and/or classifications of
         employees, and the MANAGER shall make such changes unless in its
         judgment the resulting level of operation and/or maintenance of the
         Premises will be inadequate. The 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
         MANAGER shall not assume or otherwise become a party to such contract
         for any purpose whatsoever and all personnel subject to such contract
         shall be considered the employees of the Premises and not the MANAGER.

         7. The OWNER shall pay or reimburse the MANAGER for any sums of money
due it under this Agreement for services and advances prior to termination of
this Agreement. All

                                       9
<PAGE>

provisions of this Agreement that require the OWNER to have insured, or to
protect, defend, save, hold and indemnify or to reimburse the MANAGER shall
survive any expiration or termination of this Agreement and, if MANAGER is or
becomes involved in any claim, proceeding or litigation by reason of having been
the MANAGER of the OWNER, such provisions shall apply as if this Agreement were
still in effect. The parties understand and agree that the 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 MANAGER to pay bills previously incurred, the OWNER will upon demand advance
sufficient funds to the MANAGER to ensure fulfillment of MANAGER'S obligation to
do so, within ten (10) days of receipt of notice and an itemization of such
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 MANAGER for
the performance by the OWNER or 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 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 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 MANAGER and principal.

         9. Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited or invalid under such
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of such 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 laws of the State in which the Premises are located.

         10. This Agreement shall be binding upon the successors and assigns of
the MANAGER and the heirs, administrators, executors, successors, and assignees
of the 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 attorney's fees incurred in the enforcement of any provision of this
Agreement.

         12. The failure of either party to this Agreement to, in any one or
more instances, insist upon the performance of any of the terms, covenants or
conditions of this Agreement, or to exercise

                                       10
<PAGE>

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 such forbearance
or waiver had occurred.

         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:

         FOR OWNER:                   FOR MANAGER:

         Inland Retail Real Estate    Inland Southeast Property Management Corp.
            Limited Partnership       ATTN:  Steve Sanders, President

         ATTN:  Roberta S. Matlin     4812 Tamiami Trail
         2901 Butterfield Road        Sarasota, Florida  34231
         Oak Brook, Illinois  60523   Fax:  941/9290244
         Fax:  630/2184935

         IN WITNESS WHEREOF, the parties hereto have affixed or caused to be
affixed their respective signatures this ___ day of ________________, _____.

MANAGER:                              OWNER:
INLAND SOUTHEAST PROPERTY             INLAND RETAIL REAL ESTATE
  MANAGEMENT CORP.                    LIMITED PARTNERSHIP

By:                                   BY:   INLAND RETAIL REAL ESTATE
     -------------------------------        TRUST, INC., its general partner

                                      By:
     -------------------------------        ------------------------------------

                                      Its:
                                            ------------------------------------

                                       11
<PAGE>

                                   EXHIBIT "A"

Legal Description for:

                                       1
<PAGE>

                                   EXHIBIT "B"

                      COMMERCIAL PROPERTY MANAGEMENT SYSTEM

                             BUDGET VARIANCE REPORT

                                  SAMPLE REPORT

<TABLE>
<CAPTION>
                                                          MONTH-TO-DATE                               YEAR-TO-DATE
                                                          -------------                               -------------
MONTH-TO-DATE: YEAR TO DATE:                  ACTUAL    BUDGET    VARIANCE       VAR.     ACTUAL     BUDGET    VARIANCE    VAR.
                                                ($)       ($)        ($)         (%)        ($)        ($)        ($)      (%)
                                              ------    -------   ---------     ------    -------    ------    --------   ------
<S>                                           <C>       <C>       <C>           <C>       <C>        <C>       <C>        <C>
INCOME
------

1001     Gross Unit Rent
1002     Add'l Unit Rent

  TOTAL GROSS POSSIBLE

1011     Vacancy Loss
1012     Marketing Concessions
1013     Offices/Models/Shop Unpaid

  NET RENT COLLECTIONS

1024/1025   Damages & Late Charge
1031        Vending Income
1033/1035   Miscellaneous Income

  NET OPERATIONAL INCOME

EXPENSE
--------

1400     Repair & Maintenance
1500     Salaries
1600     Health & Welfare Payments
</TABLE>

                                       1

<PAGE>

<TABLE>
<CAPTION>
                                                          MONTH-TO-DATE                               YEAR-TO-DATE
                                                          -------------                               -------------
MONTH-TO-DATE: YEAR TO DATE:                  ACTUAL    BUDGET    VARIANCE       VAR.     ACTUAL     BUDGET    VARIANCE    VAR.
                                                ($)       ($)        ($)         (%)        ($)        ($)        ($)      (%)
                                              ------    -------   ---------     ------    -------    ------    --------   ------
<S>                                           <C>       <C>       <C>           <C>       <C>        <C>       <C>        <C>
2100     Security Deposit - Interest
2200     Fees
2300     Capital Expenditure - Appliance
2400     Capital Expenditure - Common
2500     Capital Expenditure - Carpeting
2600     Landscaping & Snow Removal
2700     Painting & Decorating
2800     Marketing
2900     Elevators
3000     Rentals
3100     Pool
3200     Scavenger
3300     Telephone/Answering Service
3500     Supplies
3600     Electricity
3700     Water
3800     Gas, Fuel & Oil
3900     Exterminating

  REPORT TOTAL

4000     Miscellaneous Expenses
4100     Management Fee

  TOTAL OPERATIONAL EXPENSES

1200     Insurance
1300     Real Estate Tax

  TOTAL EXPENSE
  NET BEFORE DEBT
1100     Debt Service
</TABLE>

                                       2
<PAGE>

<TABLE>
<CAPTION>
                                                          MONTH-TO-DATE                               YEAR-TO-DATE
                                                          -------------                               -------------
MONTH-TO-DATE: YEAR TO DATE:                  ACTUAL    BUDGET    VARIANCE       VAR.     ACTUAL     BUDGET    VARIANCE    VAR.
                                                ($)       ($)        ($)         (%)        ($)        ($)        ($)      (%)
                                              ------    -------   ---------     ------    -------    ------    --------   ------
<S>                                           <C>       <C>       <C>           <C>       <C>        <C>       <C>        <C>
3400     Ground Rent

  NET BEFORE S/D ACTIVITY

1023     Security Deposit Income
1701     Security Deposit - Rent
1801     Security Deposit - Damage
1901     Security Deposit - Returns
2001     Security Deposit - Transfers

  NET SECURITY DEPOSITS

  **CASH FLOW AFTER S/D ACTIVITY

1030     Upgrade Income
4500     Upgrade Expenses
4200     Pship Level Debt
1060     Owner Advances
5001     Owner Distributions
1032/1036   Non-Operating Income
4600     Non-Operating Expense

  NET, NET CASH FLOW

REPORT TOTAL

END OF REPORT
</TABLE>

                                       3

<PAGE>

                      COMMERCIAL PROPERTY MANAGEMENT SYSTEM

                            CONSOLIDATED CASH REPORT

                                  SAMPLE REPORT

<TABLE>
<CAPTION>
ACCT #                ACCOUNT DESCRIPTION            ACTUAL    % OF GROSS      PER UNIT    YEAR TO DATE    % OF GROSS     PER UNIT
------                -------------------            ------        POS.        --------        ACTUAL           POS.      --------
                                                                ---------                  ------------    ----------
<S>             <C>                                  <C>       <C>             <C>         <C>             <C>            <C>
   INCOME
   ======

   1001          Gross Unit Rent
   1002          Add'l Unit Rent
              --------------------------------

                 TOTAL GROSS POSSIBLE
              --------------------------------

   1011          Vacancy Loss
   1012          Marketing Concessions
   1013          Offices/Models/Shop
                 Unpaid
                 NET RENT COLLECTIONS
   1024/1025     Damages & Late Charge

                                       4
<PAGE>

   1031          Vending Income
   1033/1035     Miscellaneous Income

                NET OPERATIONAL INCOME
              ================================

   EXPENSE
   =======

   1400          Repair & Maintenance
   1500          Salaries
   1600          Health & Welfare Payments
   2100          Security Deposit - Interest
   2200          Fees
   2300          Capital Expenditure - Appliances
   2400          Capital Expenditure - Common
   2500          Capital Expenditure - Carpeting
   2600          Landscaping & Snow Removal
   2700          Painting & Decorating
   2800          Marketing
   2900          Elevators
   3000          Rentals
   3100          Pool
   3200          Scavenger
   3300          Telephone/Answering Service
   3500          Supplies

                                       5
<PAGE>

   3600          Electricity
   3700          Water
   3800          Gas, Fuel & Oil
   3900          Exterminating
   4000          Miscellaneous Expense
   4100          Management Fee
              --------------------------------

                 TOTAL OPERATIONAL EXPENSES
              ================================

   1200          Insurance
   1300          Real Estate Tax

                 TOTAL EXPENSE
              ================================
                 NET BEFORE DEBT

   1100          Debt Service
   3400          Ground Rent
              --------------------------------

                 NET BEFORE S/D ACTIVITY

   1023          Security Deposit Income

   1701          Security Deposit - Rent
   1801          Security Deposit - Damage
   1901          Security Deposit - Returns
   2001          Security Deposit - Transfers

                                       6
<PAGE>

                 NET SECURITY DEPOSITS

                 **CASH FLOW AFTER S/D ACTIVITY
              --------------------------------

   1030          Upgrade Income
   4500          Upgrade Expenses
   4200          Pship Level Debt
   1060          Owner Advances
   5001          Owner Distributions
   1032 &        Non-operating Income
   1036
   4600          Non-operating Expense

                 NET, NET CASH FLOW
              ================================

   REPORT TOTAL

   END OF REPORT
</TABLE>

                                       7

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