Document:

EXHIBIT 10.1

 

FORM OF

BUSINESS
MANAGEMENT AGREEMENT

 

THIS BUSINESS MANAGEMENT AGREEMENT (this “Agreement”), dated as of
                    ,
2009, is entered into by and between INLAND DIVERSIFIED REAL ESTATE TRUST, INC.,
a Maryland corporation (the “Company”), and INLAND DIVERSIFIED BUSINESS
MANAGER & ADVISOR INC., an Illinois corporation (the “Business Manager”).

 

WITNESSETH:

 

WHEREAS, the Company has registered with the Securities and Exchange
Commission to issue Shares (as defined in Section 1 below) in a
public offering and may subsequently issue securities other than these Shares (“Securities”);

 

WHEREAS, the Company intends to qualify to be taxed as a REIT (as
defined in Section 1 below), and intends to make investments
permitted by the terms of the Articles of Incorporation (as defined below) and
Sections 856 through 860 of the Code (as defined in Section 1
below);

 

WHEREAS, the Company desires to avail itself of the experience, sources
of information, advice, assistance and facilities available to the Business
Manager and to have the Business Manager undertake the duties and
responsibilities hereinafter set forth, on behalf of, and subject to the
supervision of, the Board of Directors (as defined in Section 1
below), all as provided herein; and

 

WHEREAS, the Business Manager is willing to undertake to render these
services, subject to the supervision of the Board of Directors, on the terms
and conditions hereinafter set forth.

 

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

 

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

 

“Acquisition Co.” means Inland Real
Estate Acquisitions, Inc., an Illinois corporation.

 

“Acquisition
Expenses” means any and all expenses incurred by the Company, the
Business Manager or any Affiliate of either in connection with selecting,
evaluating or acquiring any investment in Real Estate Assets, including but not
limited to legal fees and expenses, travel and communication, appraisals and
surveys, nonrefundable option payments regardless of whether the Real Estate
Asset is acquired, accounting fees and expenses, computer related expenses,
architectural and engineering reports, environmental and asbestos audits and
surveys, title insurance and escrow fees, and personal and miscellaneous
expenses.

 

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“Affiliate” means, with respect to any
other Person:

 

(a)                                  any Person
directly or indirectly owning, controlling or holding, with the power to vote,
ten percent (10%) or more of the outstanding voting securities of such other
Person;

 

(b)                                 any Person ten
percent (10%) or more of whose outstanding voting securities are directly or
indirectly owned, controlled or held, with the power to vote, by such other
Person;

 

(c)                                  any Person
directly or indirectly controlling, controlled by or under common control with
such other Person;

 

(d)                                 any executive
officer, director, trustee, general partner or manager of such other Person;
and

 

(e)                                  any legal
entity for which such Person acts as an executive officer, director, trustee,
general partner or manager.

 

“Affiliated Directors” means those
directors of the Company who are employed by the Sponsor or one of its direct
or indirect subsidiaries.

 

“Articles of Incorporation” means the
articles of incorporation of the Company, as amended or restated from time to
time.

 

“Average Invested Assets” means, for any
period, the average of the aggregate book value of the assets of the Company,
including all intangibles and goodwill, invested, directly or indirectly, in
equity interests in, and loans secured by, Real Estate Assets, as well as
amounts invested in consolidated and unconsolidated joint ventures or other
partnerships, REITs and other Real Estate Operating Companies, before reserves
for amortization and depreciation or bad debts or other similar non-cash
reserves, computed by taking the average of these values at the end of each
month during the relevant calendar quarter. For purposes of calculating the
Management Fee pursuant to Section 8(a) of the Agreement,
Average Invested Assets shall not include any investments in securities
including any non-controlling interests in REITs or other Real Estate Operating
Companies, for which a separate investment advisor fee is paid.

 

“Board of Directors” means the persons
holding the office of director of the Company as of any particular time under
the Articles of Incorporation.

 

“Code” means the Internal Revenue Code of
1986, as amended, and the regulations promulgated thereunder or corresponding
provisions of subsequent revenue laws.

 

“Company Fixed Assets” means the Real
Property used by the Company in conducting its business.

 

“Current Return” means a non-cumulative,
non-compounded return, equal to five percent (5%) per annum on Invested
Capital, paid on an aggregate basis from distributions from all sources.

 

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“Determination Date” means the day on which
Market Value is determined.

 

“Equity Stock” means all classes or
series of capital stock of the Company, including, without limit, its common
stock, $.001 par value per share, and preferred stock, $.001 par value per
share.

 

“Fiscal Year” means the calendar year
ending December 31.

 

“GAAP” means accepted accounting principles as in effect in
the United States of America from time to time or such other accounting basis
mandated by the Securities and Exchange Commission.

 

“Gross Offering Proceeds” means the total
proceeds from the sale of 500,000,000 Shares in the Offering before deducting
Offering Expenses. For purposes of calculating Gross Offering Proceeds, the
selling price for all Shares, including those for which volume discounts apply,
shall be deemed to be $10.00 per Share. Unless specifically included in a given
calculation, Gross Offering Proceeds does not include any proceeds from the
sale of Shares under the Company’s distribution reinvestment plan.

 

“Independent Director” means any director
of the Company who:

 

(a)                                  is not
associated and has not been associated within the two years prior to becoming
an Independent Director, directly or indirectly, with the Sponsor, the Business
Manager or any of their Affiliates, whether by ownership of, ownership interest
in, employment by, any material business or professional relationship with, or
as an officer or director of the Sponsor, the Business Manager or any of their
Affiliates;

 

(b)                                 has not served,
or is not serving, as a director for more than three REITs organized by the
Sponsor or advised by the Business Manager or any of its Affiliates; and

 

(c)                                  performs no
other services for the Company, except as a director.

 

For purposes of this definition, a business or professional
relationship will be considered material if the gross revenue derived by the director
exceeds five percent (5%) of either the director’s annual gross revenue during
either of the aforementioned prior two years or the director’s net worth on a
fair market value basis during the aforementioned prior two years.  An indirect relationship shall include
circumstances in which a director’s spouse, parents, children, siblings,
mothers- or fathers-in-law, sons- or daughters-in-law or brothers- or
sisters-in-law is or has been associated with the Company, the Sponsor, the
Business Manager or any of their Affiliates during the aforementioned two year
period.

 

“Invested Capital” means the aggregate
original issue price paid for the Shares reduced by prior distributions,
identified as special distributions, from the sale or financing of the Company’s
Real Estate Assets.

 

“Liquidity Event” means a Listing or any
merger, reorganization, business combination, share exchange, acquisition by
any Person or related group of Persons of beneficial ownership of all or
substantially all of the Shares in one or more related transactions, or another

 

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similar transaction involving the Company,
pursuant to which the Stockholders receive cash or the securities of another
issuer that are listed on a national securities exchange, as full or partial
consideration for their Shares.

 

“Listing” means the filing of a Form 8-A
(or any successor form) to register the Shares, or the shares of common stock
of any of the Company’s subsidiaries, on a national securities exchange and the
approval of an original listing application related thereto by the applicable
exchange; provided, that the Shares, or the shares of common stock of
any of the Company’s subsidiaries, shall not be deemed to be Listed until
trading in the Shares, or the shares of common stock of any of the Company’s
subsidiaries, shall have commenced on the relevant national securities
exchange.  Upon a Listing, the Shares, or
the shares of common stock of the Company’s subsidiaries, shall be deemed “Listed.”  A Listing shall also be deemed to occur on
the effective date of a merger in which the consideration received by the
holders of the Shares is securities of another issuer that are listed on a
national securities exchange; provided, however, that if the
merger is effectuated through a wholly owned subsidiary of the Company, the
consideration received by the Company shall be distributed to the holders of
the Shares.

 

“Market Value” means the value of the
Company measured in connection with an applicable Liquidity Event determined as
follows: (1) in the case of the Listing of the Shares, or the shares of
the common stock of any of the Company’s subsidiaries, on a national securities
exchange, by taking the average closing price over the period of thirty (30)
consecutive trading days during which the Shares, or the shares of the common
stock of the Company’s subsidiary, as applicable, are eligible for trading,
beginning on the 180th day after Listing of the Shares, or the shares of the
common stock of the Company’s subsidiary, as applicable; or (2) in the case of
the receipt by Stockholders of securities of another entity that are trading on
a national securities exchange prior to, or that become listed on a national
securities exchange concurrent with, the consummation of the Liquidity Event,
as follows: (a) in the case of securities of another entity that are
trading on a national securities exchange prior to the consummation of the
Liquidity Event, the value ascribed to the securities in the transaction giving
rise to the Liquidity Event; and (b) in the case of securities of another
entity that become listed on a national securities exchange concurrent with the
consummation of the Liquidity Event, the average closing price over a period of
thirty (30) consecutive trading days during which the securities are eligible
for trading, beginning on the 180th day after the listing of the
securities.  In addition, any cash
consideration received by the Stockholders in connection with any Liquidity
Event shall be added to the Market Value determined in accordance with clause (1) or
(2).

 

“Marketing Contribution” means any and
all compensation payable to underwriters, dealer managers or other
broker-dealers in connection with marketing the sale of Shares, including,
without limitation, compensation payable to Inland Securities Corporation, and
which may, in the Company’s discretion, include reimbursement for any
out-of-pocket, itemized and detailed due diligence expenses incurred in
connection with investigating the Company or any offering of Securities made by
the Company.

 

“Management Fee” means any fees payable
to the Business Manager under Section 8(a) or Section 10
of this Agreement.

 

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“Net Income” means, for any period, the
aggregate amount of total revenues applicable to the period less the
expenses applicable to the same period other than additions to reserves for
depreciation, bad debts or other similar noncash reserves and Acquisition
Expenses to the extent not capitalized, provided, however, that
Net Income shall not include any gain recognized upon the sale of the Company’s
assets.

 

“Net Sales Proceeds” means the net proceeds from
the sale, grant or conveyance of any Real Estate Assets, including assets owned
by a Real Estate Operating Company that is acquired by the Company and operated
as one of its subsidiaries, remaining after paying any property disposition fee
less any costs incurred in selling the asset including, but not limited
to, legal fees and selling commissions and further reduced by the amount of any
indebtedness encumbering the asset and any amounts reinvested in one or more
Real Estate Assets or set aside as a reserve within one hundred eighty (180)
days of closing of sale, grant or conveyance.

 

“Offering” means the initial public
offering of Shares on a “best efforts” basis pursuant to the Prospectus, as
amended and supplemented from time to time.

 

“Offering Expenses” means all expenses
incurred by, and to be paid from, the assets of the Company in connection with
and in preparing the Company for registration and offering its Shares to the
public, including, but not limited to, total underwriting and brokerage
discounts and commissions (including fees and expenses of underwriters’
attorneys paid by the Company), expenses for printing, engraving and mailing,
salaries of the employees of the Company, or the Sponsor and its Affiliates,
while engaged in sales activity, charges of transfer agents, registrars,
trustees, escrow holders, depositaries and experts, expenses of qualifying the
sale of the Shares under federal and state laws, including taxes and fees and
accountants’ and attorneys’ fees and expenses, and which may, in the Company’s
discretion, include reimbursement for any out-of-pocket, itemized and detailed
expenses incurred in connection with investigating the Company or any offering
of Securities made by the Company.

 

“Organization Expenses”
means the aggregate of all Offering Expenses, including Selling Commissions and
the Marketing Contribution.

 

“Permitted
Investment” means any investment that the Company may acquire
pursuant to the Articles of Incorporation or its bylaws, including any
investment in collateralized mortgage-backed securities and any investment or
purchase of interests in a Real Estate Operating Company or other entity owning
Properties or loans.

 

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

 

“Priority Return” means a non-cumulative, non-compounded
return, equal to six percent (6%) per annum on Invested Capital, paid on an
aggregate basis from distributions from all sources.

 

“Property” or “Properties”
means interests in (i) Real Property, (ii) long-term ground leases or
(iii) any buildings, structures, improvements, furnishings, fixtures and
equipment, whether or not located on the Real Property, in each case owned or
to be owned by 

 

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the Company either directly or indirectly
through one or more Affiliates, joint ventures, partnerships or other legal
entities.

 

“Property Acquisition Agreement” means
that certain Property Acquisition Agreement, dated
                    ,
2009, among the Company, the Business Manager and Acquisition Co.

 

“Prospectus” has the meaning set forth in
Section 2(10) of the Securities Act of 1933, as amended (the “Securities
Act”), including a preliminary prospectus, an offering circular as described in
Rule 253 of the General Rules and Regulations under the Securities
Act, or, in the case of an intrastate offering, any document by whatever name
known, utilized for the purpose of offering and selling the Shares to the
public.

 

“Real Estate Assets” means any and all
investments in: (i) Properties; (ii) loans, or other evidence of
indebtedness, secured, directly or indirectly, by interests in Real Property;
or (iii) other Permitted Investments (including all rents, income profits
and gains therefrom), in each case whether real, personal or otherwise,
tangible or intangible, that are transferred or conveyed to, or owned or held
by, or for the account of, the Company or any of its subsidiaries.

 

“Real Estate Manager” means any of Inland
Diversified Real Estate Services LLC, Inland Diversified Asset Services LLC,
Inland Diversified Leasing Services LLC and Inland Diversified Development
Services LLC, each a Delaware limited liability company, or any of their
successors or assigns, or entities owned or controlled by the Sponsor and
engaged by the Company to manage a Property or Properties.

 

“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 other entity; provided, that in each
case, the entity, either itself or through its subsidiaries:

 

(a) 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;

 

(b) has a policy or purpose of, or the authority for, reinvesting
sale, financing or refinancing proceeds or cash from operations;

 

(c) has its own directors, managers or managing general partners,
as applicable; and

 

(d) either (1) has its own officers and employees that, on a
daily basis, actively operate the entity and its subsidiaries and businesses,
or (2) 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.

 

Notwithstanding the above, for these
purposes, any joint venture or other partnership the Company may form with a
third party, in which the Company is a member, equity holder or 

 

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partner (whether the entity is consolidated
or unconsolidated on the Company’s financial statements) will not constitute a
Real Estate Operating Company.

 

“Real
Property” means land, rights or interests in land (including, but
not limited to, leasehold interests), and any buildings, structures,
improvements, furnishings, fixtures and equipment located on, or used in
connection with, land and rights or interest in land.

 

“REIT” means a real estate investment
trust as defined in Sections 856 through 860 of the Code.

 

“Shares” means the shares of common stock, par value $.001
per share, of the Company, and “Share” means one of those Shares.

 

“Selling Commissions” means any and all
commissions, not to exceed seven and one-half percent (7.5%) of the gross
offering price of any Shares, payable to underwriters, dealer managers or other
broker-dealers in connection with the sale of Shares.

 

“Sponsor” means Inland Real Estate
Investment Corporation, a Delaware corporation.

 

“Stockholders” means holders of shares of
Equity Stock.

 

“Total Operating Expenses” means the
aggregate expenses of every character paid or incurred by the Company as
determined under GAAP, including the Management Fee and other fees payable
hereunder, but excluding:

 

(a)                                  the expenses of
raising capital such as Offering Expenses, Organization Expenses, legal, audit,
accounting, underwriting, brokerage, listing, registration and other fees,
printing and other expenses and taxes incurred in connection with the issuance,
distribution, transfer, registration and listing of any shares of the Equity
Stock;

 

(b)                                 property
expenses incurred on an individual Property level;

 

(c)                                  interest
payments;

 

(d)                                 taxes;

 

(e)                                  non-cash
charges such as depreciation, amortization and bad debt reserves;

 

(f)                                    any incentive
fees payable pursuant to Section 8(b) hereof; and

 

(g)                                 Acquisition
Expenses, real estate commissions on resale of property and other expenses
connected with acquiring, disposing and owning real estate interests, mortgage
loans, or other property (such as the costs of foreclosure, insurance premiums,
legal services, maintenance, repair and property improvements).

 

2.                                       Duties of the
Business Manager. The Business Manager shall consult with the
Company and furnish advice and recommendations with respect to all aspects of
the business and 

 

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affairs of the Company.  The Business Manager shall inform the Board
of Directors of factors that come to the Business Manager’s attention that may,
in its opinion, influence the policies of the Company.  Subject to the supervision of the Board of
Directors and consistent with the provisions of the Articles of Incorporation,
the Business Manager shall use commercially reasonable efforts to:

 

(a)                                  subject to the
terms and conditions set forth in the Property Acquisition Agreement, identify
potential investment opportunities in Real Estate Assets located in the United
States and Canada, consistent with the Company’s investment objectives and
policies; including but not limited to:

 

(i)                                     locating,
analyzing and selecting potential investments in Real Estate Assets;

 

(ii)                                  structuring and
negotiating the terms and conditions of acquisition and disposition
transactions;

 

(iii)                               arranging for
financing and refinancing and making other changes in the asset or capital
structure of the Company and disposing of and reinvesting the proceeds from the
sale of, or otherwise deal with the investments in, Real Estate Assets; and

 

(iv)                              overseeing
leases and service contracts, on the Company’s behalf, for Real Estate Assets.

 

(b)                                 assist the
Board of Directors in evaluating investment opportunities;

 

(c)                                  provide the
Board of Directors with research and other statistical data and analysis in
connection with the Company’s assets, operations and investment policies;

 

(d)                                 manage the
Company’s day-to-day operations, consistent with the investment objectives and
policies established by the Board of Directors from time to time;

 

(e)                                  investigate,
select and conduct relations with lenders, consultants, accountants, brokers,
real estate managers, attorneys, underwriters, appraisers, insurers, corporate
fiduciaries, banks, builders and developers, sellers and buyers of investments
and persons acting in any other capacity specified by the Company from time to
time, and enter into contracts in the Company’s name with, and retaining and
supervising services performed by, such parties in connection with investments
that have been or may be acquired or disposed of by the Company;

 

(f)                                    cooperate with
the Real Estate Managers in connection with real estate management services and
other activities relating to the Company’s assets, subject to any requirement
under the laws, rules and regulations affecting REITs that own Real
Property that the Business Manager or the applicable Real Estate Manager, as
the case may be, qualifies as an “independent contractor” as that phrase is
used in connection with applicable laws, rules and regulations affecting
REITs that own Real Property;

 

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

 

(h)                                 assist in
negotiations on behalf of the Company with investment banking firms and other
institutions or investors for public or private sales of Securities of the
Company or for other financing on behalf of the Company, provided that in no
event may the Business Manager act as a broker, dealer, underwriter or
investment advisor of, or for, the Company;

 

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

 

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

 

(k)                                  subject to the
reimbursement of costs associated therewith, provide office space, equipment
and personnel as required for the performance of the foregoing services as
Business Manager;

 

(l)                                     advise the
Board of Directors, from time to time, of the Company’s operating results and
coordinate preparation, with each Real Estate Manager, of an operating budget
including one, three and five year projections of operating results and such
other reports as may be appropriate for each Real Estate Asset;

 

(m)                               prepare, on
behalf of the Company, all reports and returns required by the Securities and
Exchange Commission, Internal Revenue Service and other state or federal
governmental agencies relating to the Company and its operations;

 

(n)                                 undertake and
perform all services or other activities necessary and proper to carry out the
Company’s investment objectives;

 

(o)                                 provide the
Company with, or arrange for, all necessary cash management services;

 

(p)                                 maintain the
Company’s books and records including, but not limited to, appraisals and
fairness opinions obtained in connection with acquiring or disposing Real
Estate Assets; and

 

(q)                                 enter into
ancillary agreements with the Sponsor and its Affiliates to arrange for the
services and licenses to be provided by the Business Manager hereunder, as
summarized on Schedule 2(q) hereto.

 

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3.                                       No Partnership
or Joint Venture. The Company and the Business Manager are not, and
shall not be deemed to be, partners or joint venturers with each other.

 

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

 

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

 

6.                                       Fidelity Bond. The Business
Manager shall not be required to obtain or maintain a fidelity bond in
connection with performing its services hereunder.

 

7.                                       Information
Furnished to the Business Manager. The Board of Directors
will keep the Business Manager informed in writing concerning the investment
and financing policies of the Company. The Board of Directors shall notify the
Business Manager promptly in writing of the Board of Director’s intention to
make any investments or to sell or dispose of any existing investments.

 

8.                                       Compensation. Subject to
the provisions of Section 12 hereof, and in addition to any
compensation for additional services that may be paid pursuant to Section 10
hereof, for services rendered hereunder the Company shall pay to the Business
Manager the following:

 

(a)                                  Subject to
satisfying the criteria described herein, the Company shall pay the Business
Manager a quarterly Management Fee equal to a percentage of Average Invested
Assets calculated as follows: (i) if the Company has declared
distributions to the holders of its common stock during the prior calendar
quarter just ended, in an amount equal to or greater than an average seven
percent (7.0%) annualized distribution rate (assuming a share of common stock
was purchased for $10.00), the Company will pay a fee equal to one-fourth
percent (0.25%) of Average Invested Assets for that prior calendar quarter; (ii) if
the Company has declared distributions to the holders of its common stock
during the prior calendar quarter just ended, in an amount equal to or greater
than an average six percent 

 

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(6.0%) annualized
distribution rate but less than an average seven percent (7.0%) annualized
distribution rate (in each case, assuming a share of common stock was purchased
for $10.00), the Company will pay a fee equal to three-sixteenths percent
(0.1875%) of Average Invested Assets for that prior calendar quarter; (iii) if the Company has declared distributions to
the holders of its common stock during the prior calendar quarter just ended,
in an amount equal to or greater than an average five percent (5.0%) annualized
distribution rate but less than an average six percent (6.0%) annualized
distribution rate (in each case, assuming a share of common stock was purchased
for $10.00), the Company will pay a fee equal to one-eighth percent (0.125%) of
Average Invested Assets for that prior calendar quarter; or (iv) if the Company
does not satisfy the criteria in clauses (i), (ii) or (iii) of this Section 8(a) in
a particular calendar quarter just ended, the Company will not, except as set
forth below, pay a Management Fee for that prior calendar quarter.  In the event that clause (i), (ii) or (iii) of
this Section 8(a) is satisfied, the Business Manager may
decide, in its sole discretion, to be paid an amount less than the total amount
that may be paid.  If the Business
Manager decides to accept less in any particular quarter, the excess amount
that is not paid may, in the Business Manager’s sole discretion, be waived
permanently or accrued, without interest, to be paid at a later point in
time.  The obligation to pay this fee
will terminate if the Company acquires the Business Manager.

 

(b)                                 The Company
shall pay the Business Manager an incentive fee equal to fifteen percent (15%)
of the Net Sales Proceeds; provided that in no event shall the Company
be obligated to pay an incentive fee unless and until all of its Stockholders
have first received, on an aggregate basis, a ten percent (10%) per annum
cumulative, non-compounded return on, plus return of, their Invested
Capital.  Any amount due under this Section 8(b) shall
be paid no later than five (5) days after the transaction generating Net
Sales Proceeds closes; provided, that any amount that may be payable shall be
reduced by all prior fees paid under this Section 8(b).  The obligation to pay this fee will terminate
if the Company acquires the Business Manager.

 

(c)                                  Upon a
Liquidity Event, the Company shall pay, within five (5) business days after
the Determination Date, the Business Manager a listing fee, in an amount equal
to fifteen percent (15%) of the amount by which (i) the Market Value plus
the total distributions paid to Stockholders from the Company’s inception until
the Determination Date exceeds (ii) the Invested Capital, less any
distributions of Net Sales Proceeds or financing proceeds, plus the total
distributions required to be made to the Stockholders in order to pay them the
Priority Return from inception through the Determination Date.  In the event that, at the Determination Date,
Stockholders have not received a return of their Invested Capital, less any
distributions of Net Sales Proceeds or financing proceeds, plus the total
distributions required to be made to the Stockholders in order to pay them the
Priority Return, the obligation of the Company to pay the aforesaid listing fee
shall continue and the listing fee shall be paid at the time that the Company
has paid the total distributions required to be made to the Stockholders in
order to pay them the Priority Return as herein calculated, provided, however,
that the fee shall 

 

11

 

be calculated as described
in this Section 8(c), as if the Priority Return would have been
satisfied at the Determination Date.  The
obligation to pay this fee will terminate if the Company acquires the Business
Manager prior to a Liquidity Event.

 

9.                                       Expenses.

 

(a)                                  In addition to
the compensation paid to the Business Manager pursuant to Section 8
and Section 10 hereof, and subject to the limits herein, the
Company shall reimburse the Business Manager, the Sponsor and their respective
Affiliates for all expenses attributable to the Company paid or incurred by the
Business Manager, the Sponsor or their respective Affiliates in providing
certain services and licenses hereunder, including all expenses and the costs
of salaries and benefits of persons employed by the Business Manager, the
Sponsor and their respective Affiliates and performing services for the
Company, except for the salaries and benefits of persons who also serve as one
of the Company’s executive officers or as an executive officer of the Business
Manager or its Affiliates.  For purposes
of this Section 9(a), secretary shall not be considered an “executive
officer.”

 

(b)                                 Expenses that
the Company shall reimburse pursuant to Section 9(a) hereof
include, but are not limited to all:

 

(i)                                     Offering
Expenses;

 

(ii)                                  Acquisition
Expenses incurred in connection with selecting and acquiring Real Estate Assets;

 

(iii)                               the actual cost
of goods and services purchased for and used by the Company and obtained from
entities not affiliated with the Business Manager;

 

(iv)                              interest and
other costs for borrowed money, including points and other similar fees;

 

(v)                                 taxes and
assessments on income or attributed to Real Property;

 

(vi)                              premiums and
other associated fees for insurance policies including director and officer
liability insurance;

 

(vii)                           expenses of
managing and operating Real Estate Assets owned by the Company, whether payable
to an Affiliate of the Company or a non-affiliated Person;

 

(viii)                        fees and
expenses paid to members of the Board of Directors and the fees and costs of
any meetings of the Board of Directors or Stockholders;

 

(ix)                                expenses
associated with listing or with issuing Shares and Securities, including
advertising expenses, taxes, legal and accounting fees, listing 

 

12

 

and registration fees and
other Organization Expenses except for Selling Commissions or other fees and
expenses paid by the Dealer Manager to any Soliciting Dealer (as those terms
are defined in the Dealer Manager Agreement) pursuant to that certain Dealer
Manager Agreement dated                     ,
2009 by and between the Company and Inland Securities Corporation;

 

(x)                                   expenses
associated with dividends or distributions paid in cash or otherwise made or
caused to be made by the Company to Stockholders;

 

(xi)                                expenses of
organizing the Company and filing, revising, amending, converting or modifying
the Articles of Incorporation or the bylaws;

 

(xii)                             expenses
associated with Stockholder communications including the cost of preparing,
printing and mailing annual reports, proxy statements and other reports
required by governmental entities;

 

(xiii)                          administrative
service expenses charged to, or for the benefit of, the Company by
non-affiliated third parties;

 

(xiv)                         audit,
accounting and legal fees charged to, or for the benefit of, the Company by
non-affiliated third parties;

 

(xv)                            transfer agent
and registrar’s fees and charges;

 

(xvi)                         expenses
relating to any offices or office facilities maintained solely for the benefit
of the Company that are separate and distinct from the Company’s executive
offices; and

 

(xvii)                      payments made
to Affiliates of the Sponsor for the services and licenses provided for the
benefit of the Company.

 

(c)                                  The Company
shall also reimburse the Business Manager, the Sponsor and their respective
Affiliates pursuant to Section 9(a) hereof for the salaries
and benefits of persons employed by the Business Manager, the Sponsor or their
respective Affiliates and performing services for the Company, subject to the
following:

 

(i)                                     In the case of
employees of the Sponsor who also provide services for other entities sponsored
by, or affiliated with, the Sponsor, the Company shall reimburse only a pro
rata portion of the salary and benefits of these persons based on the amount of
time spent by such persons on matters for the Company compared to the time
spent by such persons on all other matters including the Company’s matters.

 

(ii)                                  In the case of
services provided by the Affiliates of the Sponsor, and unless otherwise agreed
to in writing by the Company or the Business Manager, the Company shall be
responsible for the payment of the charges billed by such Affiliates for work
done for the benefit of the Company. 
Such charges shall be based upon: (A) such Affiliate’s “hourly
billing rate” of its employees, 

 

13

 

(B) fixed amounts or (C) a
combination of the “hourly billing rate” and fixed amounts, all as set forth in
the respective Affiliate ancillary agreements between the Business Manager or
the Company and the Affiliate.  The “hourly
billing rate” for employees of Affiliates of the Sponsor shall be based on the
budgeted salaries, benefits, overhead and operating expenses of such
Affiliates.  In the event that an
Affiliate of the Sponsor providing services for the benefit of the Company has
revenues for any one fiscal year that exceed its expenses for that year, such
Affiliate shall rebate the excess on a pro rata basis to its clients based on
the revenues attributable to such client.

 

(d)                                 The Business
Manager shall prepare a statement documenting the expenses paid or incurred by
the Business Manager, the Sponsor and their respective Affiliates for the
Company on a monthly basis.  The Company
shall reimburse the Business Manager, the Sponsor and their respective
Affiliates for these expenses within twenty (20) days after receipt of such
statements.  With respect to expenses
incurred by Affiliates of the Sponsor related to services and licenses provided
for the benefit of the Company, or payments made for these services and
licenses, the Business Manager, in its sole discretion, may arrange for payment
to be made directly from the Company to the Affiliates of the Sponsor.

 

(e)                                  The Business
Manager shall cause the Sponsor and its Affiliates to direct their employees,
who perform services for the Company, to keep time sheets or other appropriate
billing records and receipts in connection with any reimbursement of expenses
made by the Company pursuant to this Section 9.  All time sheets or other appropriate billing
records or receipts shall be made available to the Company upon reasonable
request to the Business Manager.

 

(f)                                    Permitted
reimbursements shall include salaries and related salary expenses for services
that could be performed directly for the Company by independent, non-affiliated
third parties such as legal, accounting, transfer agent, data processing and
duplication, but that the Business Manager, Sponsor or their respective
Affiliates elect to perform. The Business Manager believes that the employees
of the Business Manager, the Sponsor and their respective Affiliates who may
perform services for the Company for which reimbursement is allowed, will have
the experience and educational background, in their respective fields of
expertise, appropriate for the performance of any such services.

 

10.                                 Compensation
for Additional Services, Certain Limitations.

 

(a)                                  The Company and
the Business Manager will separately negotiate and agree on the fees for any
additional services that the Company asks the Business Manager or its
Affiliates to render in addition to those set forth in Section 2
hereof.  Any additional fees or
reimbursements to be paid by the Company in connection with the additional
services must be fair and reasonable and shall be approved by a majority of the
Board of Directors, including a majority of the Independent Directors.

 

14

 

 

(b)                                 In
extraordinary circumstances fully justified to the official or agency
administering the appropriate state securities laws, the Business Manager and
its Affiliates may provide other goods and services to the Company if all of
the following criteria are met:

 

(i)                                     the goods or
services must be necessary to the prudent operation of the Company; and

 

(ii)                                  if at least
ninety-five percent (95%) of gross revenues attributable to the business of
rendering such services or selling or leasing such goods are derived from
persons other than Affiliates of the Business Manager, the compensation, price
or fee charged by an unaffiliated person who is rendering comparable services
or selling or leasing comparable goods must be on competitive terms in the same
geographic location. Extraordinary circumstances shall be presumed to exist
only when there is an emergency situation requiring immediate action by the
Business Manager or its Affiliates and the goods or services are not
immediately available from unaffiliated parties. Services that may be performed
in extraordinary circumstances include emergency maintenance of Real Estate
Assets, janitorial and other related services due to strikes or lockouts,
emergency tenant evictions and repair services that require immediate action,
as well as operating and releasing properties with respect to which the leases
are in default or have been terminated.

 

11.                                 Statements.  The Business Manager shall furnish to the
Company, not later than the tenth (10th) day following
the end of each calendar quarter, beginning with the second calendar quarter of
the term of this Agreement, a statement computing any Management Fee or
incentive fee payable hereunder. The Business Manager shall also furnish to the
Company, not later than the thirtieth (30th) day following
the end of each Fiscal Year, a statement computing the fees payable to the
Business Manager, the Sponsor or their respective Affiliates for the just
completed Fiscal Year; provided that any compensation payable hereunder
shall be subject to adjustments in accordance with, and upon completion of, the
annual audit of the Company’s financial statements.

 

12.                                 Reimbursement
by Business Manager. The Business Manager shall be obligated to
reimburse the Company in the following circumstances:

 

(a)                                  On or before
the fifteenth (15th) day after the completion of the annual
audit of the Company’s financial statements for each Fiscal Year, the Business
Manager shall reimburse the Company for the amounts, if any, by which the Total
Operating Expenses (including the Management Fee and other fees payable
hereunder) of the Company for the Fiscal Year just ended exceeded the greater
of:

 

(i)                                     two percent
(2%) of the total of the Average Invested Assets for the just ended Fiscal
Year; or

 

(ii)                                  twenty-five percent
(25%) of the Net Income for the just ended Fiscal Year;

 

 

15

 

provided, however, that the Business Manager may
satisfy any obligation under this Section 12(a) by reducing
the amount to be paid the Business Manager under Section 8 or Section 10
hereunder until the Business Manager has satisfied its obligations under this Section 12(a);
provided, further, that the Board of Directors, including a
majority of the Independent Directors of the Company, may reduce the amount due
under this Section 12(a) upon a finding that the increased
expenses were caused by unusual or nonrecurring factors.

 

(b)                                 If the
aggregate of all Organization Expenses exceeds fifteen percent (15%) of the
Gross Offering Proceeds or all Offering Expenses (excluding any Selling
Commissions and the Marketing Contribution) exceed five percent (5.0%) of the
Gross Offering Proceeds, the Business Manager or its Affiliates shall reimburse
the Company for, or pay directly, any excess Organization Expenses or Offering
Expenses incurred by the Company above these limits.

 

13.                                 Other
Activities of the Business Manager.  Nothing contained herein shall prevent the
Business Manager or an Affiliate of the Business Manager from engaging in any
other business or activity including rendering services or advising on real
estate investment opportunities to any other person or entity.  Directors, officers, employees and agents of
the Business Manager or of Affiliates of the Business Manager may serve as
directors, trustees, officers, employees or agents of the Company, but shall
receive no compensation (other than reimbursement for expenses) from the
Company for this service.

 

14.                                 Term;
Termination of Agreement. This Agreement shall have an initial term
of one year and, thereafter, will continue in force for successive one year
renewals with the mutual consent of the parties including an affirmative vote
of a majority of the Independent Directors. 
It is the duty of the Board of Directors to evaluate the performance of
the Business Manager annually before renewing this Agreement, and each renewal
shall be for a term of no more than one year. 
Each extension shall be executed in writing by both parties hereto prior
to the expiration of this Agreement or of any extension thereof.

 

Notwithstanding
any other provision of the Agreement to the contrary, this Agreement may be
terminated, without cause or penalty, by the Company upon a vote of a majority
of the Independent Directors or by the Business Manager, by providing no less
than sixty (60) days’ prior written notice to the other party. In the event of
the termination of this Agreement, the Business 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 Business Manager.

 

This
Agreement shall also terminate upon the closing of a business combination
between the Company and the Business Manager.

 

If
this Agreement is terminated pursuant to this Section 14, the
parties shall have no liability or obligation to each other including any
obligations imposed by Section 2(a) hereof, except as provided
in Section 17.

 

 

16

 

15.                                 Assignments. The Business
Manager may not assign this Agreement except to a successor organization that
acquires substantially all of its property and carries on the affairs of the
Business Manager; provided that following the assignment, the persons
who controlled the operations of the Business Manager immediately prior
thereto, control the operations of the successor organization, including the
performance of duties under this Agreement; however, if at any time subsequent
to the assignment these persons cease to control the operations of the
successor organization, the Company may thereupon terminate this
Agreement.  This Agreement shall not be
assignable by the Company without the consent of the Business Manager.  Any assignment of this Agreement shall bind
the assignee hereunder in the same manner as the assignor is bound hereunder.

 

16.                                 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 to the Business Manager if any of the following events
occurs:

 

(a)                                  the Business
Manager violates any provisions of this Agreement and after notice of the
violation, the default is not cured within thirty (30) days; or

 

(b)                                 a court of
competent jurisdiction enters a decree or order for relief in respect of the
Business 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 Business Manager or for any substantial part of its property
or orders the winding up or liquidation of the Business Manager’s affairs not
dismissed within ninety (90) days; or

 

(c)                                  the Business
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 Business 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
Business Manager agrees that if any of the events specified in subsections (b) and
(c) of this Section 16 occur, it will give written notice
thereof to the Company within seven (7) days after the occurrence of such
event.

 

17.                                 Action Upon
Termination. The Business Manager shall not be entitled to
compensation after the date of termination of this Agreement under Section 8
of this Agreement for further services hereunder, but shall be paid all
compensation accruing or accrued to the date of termination; provided,
that with respect to any Management Fee payable under Section 8(a) of
this Agreement for the calendar quarter in which the termination occurred, the
Business Manager shall be paid on a pro rata basis
through the date of termination, based on the number of days for which the
Business Manager served as such under this Agreement. Upon termination of this
Agreement, the Business Manager shall:

 

 

17

 

(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 Business Manager is entitled;

 

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

 

(c)                                  deliver to the
Board of Directors all property and documents of the Company then in the
custody of the Business Manager; and

 

(d)                                 cooperate with
the Company and take all reasonable steps requested by the Company to assist
the Board of Directors in making an orderly transition of the functions
performed by the Business Manager.

 

18.                                 Non-Solicitation.  During the period commencing on the date on
which this Agreement is entered into and ending one year following the
termination of this Agreement, the Company shall not, without the Business Manager’s
prior written consent, directly or indirectly, (i) solicit or encourage
any person to leave the employment or other service of the Business Manager or
its Affiliates or (ii) hire, on behalf of the Company or any other person,
firm, corporation or other business organization, any person who has left the
employment of the Business Manager or its Affiliates, within the one year
period following the termination of that person’s employment the Business
Manager or its Affiliates.  During the
period commencing on the date hereof through and ending one year following the
termination of this Agreement, the Company shall not, whether for its own
account or for the account of any other person, firm, corporation or other
business organization, intentionally interfere with the relationship of the
Business Manager with, or endeavor to entice away from the Business Manager,
any person who during the term of the Agreement is, or during the preceding
one-year period, was a client of the Business Manager.

 

19.                                 Tradename and
Marks.  Concurrent with executing this
Agreement, the Company will enter into a license agreement granting the Company
the right, subject to the terms and conditions of license agreement, to use the
“Inland” name and marks.

 

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

 

21.                                 Successors and
Assigns. This Agreement shall inure to the benefit of, and shall bind, any
successors or assigns of the parties hereto.

 

22.                                 Governing Law.  The provisions of this Agreement shall be
governed, construed and interpreted in accordance with the internal laws of the
State of Illinois without regard to its conflicts of law principles.

 

 

18

 

23.                                 Liability and
Indemnification.

 

(a)                                  The Company
shall indemnify the Business Manager and its 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 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 Indemnitee for losses, liabilities or expenses arising
from, or out of, an alleged violation of federal or state securities laws (“Securities
Claims”) by any Indemnitee seeking indemnity unless one or more of the
following conditions are met:

 

(i)                                     there has been
a successful adjudication for the Indemnitee on the merits of each count
involving alleged Securities Claims as to such Indemnitee;

 

(ii)                                  the Securities
Claims have been dismissed with prejudice on the merits by a court of competent
jurisdiction as to such Indemnitee; or

 

(iii)                               a court of
competent jurisdiction approves a settlement of the Securities 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 Claims.

 

(c)                                  The Company
shall advance amounts to Indemnitees 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;

 

 

19

 

(ii)                                  the legal
action is initiated by a third party and a court of competent jurisdiction
specifically approves the advance; 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.

 

24.                                 Notices.  All notices or other communications required
or permitted hereunder shall be in writing and shall be deemed given or
delivered:  (i) when delivered
personally or by commercial messenger; (ii) one business day following
deposit with a recognized overnight courier service, provided the deposit
occurs prior to the deadline imposed by the overnight courier service for
overnight delivery; (iii) when transmitted, if sent by facsimile copy,
provided confirmation of receipt is received by sender and is sent by an
additional method provided hereunder, in each case above provided the notice of
communication is addressed to the intended recipient thereof as set forth
below:

 

	
  If to the Company:

  	
   

  	
  Inland
  Diversified Real Estate Trust, Inc.

  
	
   

  	
   

  	
  2901
  Butterfield Road

  
	
   

  	
   

  	
  Oak
  Brook, IL 60523

  
	
   

  	
   

  	
  Attention:

  	
  Ms. Roberta
  S. Matlin

  
	
   

  	
   

  	
  Telephone:

  	
  (630)
  218-8000

  
	
   

  	
   

  	
  Facsimile:

  	
  (630)
  218-4955

  
	
   

  	
   

  	
   

  
	
  If to the Business Manager:

  	
   

  	
  Inland
  Diversified Business Manager & Advisor Inc.

  
	
   

  	
   

  	
  2901
  Butterfield Road

  
	
   

  	
   

  	
  Oak
  Brook, IL 60523

  
	
   

  	
   

  	
  Attention:

  	
  Mr. Barry
  L. Lazarus

  
	
   

  	
   

  	
  Telephone:

  	
  (630)
  218-8000

  
	
   

  	
   

  	
  Facsimile:

  	
  (630)
  218-4955

  

 

Any
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 24.

 

25.                                 Conflicts of
Interest and Fiduciary Relationship to the Company and to the Company’s
Stockholders. The Company and the Business Manager recognize
that their relationship is subject to various conflicts of interest. The
Business Manager, on behalf of itself and its Affiliates, acknowledges that the
Business Manager and its Affiliates have a fiduciary relationship to the
Company and to the Stockholders. The Business Manager, on behalf of itself and
its Affiliates, shall endeavor to balance the interests of the Company with the
interests of the Business Manager and its Affiliates in making any
determination where a conflict of interest exists between the Company and the
Business Manager or its Affiliates.

 

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

 

 

20

 

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

 

	
  COMPANY:

  	
   

  	
  BUSINESS
  MANAGER:

  
	
   

  	
   

  	
   

  
	
  INLAND
  DIVERSIFIED REAL ESTATE TRUST, INC.

  	
   

  	
  INLAND
  DIVERSIFIED BUSINESS MANAGER & ADVISOR INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  

 

 

21

 

Schedule
2(q)

 

The Business Manager shall
enter into ancillary agreements with the Sponsor and its Affiliates to arrange
for the services and licenses to be provided by the Business Manager under the
Agreement, as summarized below.

 

·                                         Brokerage
Services.  An affiliate of the Sponsor will facilitate
transactions in real-estate related loans and commercial mortgage backed
securities.  The service provider will
not be reimbursed for any expenses incurred in providing these services.

 

·                                         Communications
Services.  Inland
Communications, Inc. will provide marketing, communications and media
relations services, including designing and placing advertisements, editing
marketing materials, preparing and reviewing press releases, distributing
certain stockholder communications and maintaining branding standards.

 

·                                         Computer
Services.   Inland Computer Services, Inc. (“ICS”)
will provide data processing, computer equipment and support services and other
information technology services, including custom application, development and
programming, support and troubleshooting, data storage and backup, email
services, printing services and networking services, including Internet access.

 

·                                         Insurance
and Risk Management Services.  Inland Risk and
Insurance Management Services, Inc. will provide insurance and risk
management services, including negotiating and obtaining insurance policies,
managing sales contracts, leases and other real estate or corporate agreements
and documents and settling claims and reviewing and monitoring the Company’s
insurance policies.

 

·                                         Legal
Services.  The Inland Real
Estate Group, Inc. will provide legal services, including drafting and
negotiating real estate purchase and, performing due diligence and rendering
legal opinions.

 

·                                         Mortgage
Placement Services.  Inland Mortgage Brokerage Corporation (“IMBC”)
and Inland Commercial Mortgage Corporation (“ICMC”) will place mortgages.  IMBC and ICMC will not be reimbursed for any
expenses incurred in providing these services.

 

·                                         Mortgage
Servicing.  Inland
Mortgage Servicing Corporation (“IMSC”) will service mortgages.  IMSC will not be reimbursed for any expenses
incurred in providing these services.

 

·                                         Office
Services.  Inland Office
Services, Inc. (“IOS”) will provide office and administrative services,
including purchasing and maintaining office supplies, office equipment and
furniture, installing and maintaining telephones, providing mailroom, courier
and switchboard services and procurement services.  IOS will negotiate and manage contract
programs including but not limited to business travel, cellular phone services
and shipping services.

 

 

22

 

·                                         Personnel
Services.  Inland Human
Resource Services, Inc. will provide personnel services, including
pre-employment services, new hire services, human resources, benefit
administration and payroll and tax administration.

 

·                                         Property
Tax Services.  Investors
Property Tax Services, Inc. will provide property tax services, including
tax reduction, such as monitoring properties and seeking ways to lower assessed
valuations, and tax administration, such as coordinating payment of real estate
taxes.

 

·                                         Software
License.   ICS will grant the Business Manager a
non-exclusive and royalty-free right and license to use and copy software owned
by ICS and to use certain third party software according to the terms of the
applicable third party licenses to ICS, all in connection with the Business
Manager’s obligations under the Agreement. 
ICS will provide the Business Manager with all upgrades to the licensed
software.

 

 

23EXHIBIT 10.6

 

PROPERTY ACQUISITION AGREEMENT

 

THIS
PROPERTY ACQUISITION AGREEMENT (this “Agreement”) is entered into as of                         ,
2009 by and between INLAND REAL ESTATE ACQUISITIONS, INC., an Illinois
corporation (“Acquisitions”), INLAND DIVERSIFIED BUSINESS  MANAGER & ADVISOR, INC., an Illinois
corporation (“Business Manager”) and INLAND DIVERSIFIED REAL ESTATE
TRUST, INC., a Maryland corporation (the “Company”).  Acquisitions, Business Manager and the
Company are sometimes referred to herein individually as a “Party” and
collectively as the “Parties.”

 

WHEREAS,
the Company is in the business of, among other things, acquiring and developing
commercial real estate located in the United States and Canada including retail
properties, office buildings, multi-family properties, student housing
properties, industrial/distribution and warehouse facilities and lodging
properties;

 

WHEREAS,
Acquisitions is in the business of acquiring and assisting certain third
parties in acquiring assets, such as the Real Estate Assets (as defined below);

 

WHEREAS,
Acquisitions and Business Manager are indirect wholly owned subsidiaries of The
Inland Group, Inc., a Delaware corporation (“The Inland Group”);

 

WHEREAS,
the parties hereby acknowledge that Robert D. Parks is an officer and director
of the Company and a stockholder and director of The Inland Group;

 

WHEREAS,
concurrently with entering into this Agreement, the Company entered into the
Business Management Agreement with the Business Manager, under which the
Business Manager will serve as the business manager of the Company;

 

WHEREAS,
the Business Management Agreement provides among other matters, that the
Business Manager will identify potential investment opportunities for the
Company; and

 

WHEREAS,
the Business Manager has requested that Acquisitions grant the Company certain
rights to acquire Real Estate Assets identified by Acquisitions.

 

NOW,
THEREFORE, in consideration of the mutual promises and covenants contained
herein, and in consideration of the amounts payable to affiliates of
Acquisitions under the Business Management Agreement, the Parties agree as
follows:

 

1.                                       Incorporation of Recitals.  By this reference, the
recitals set forth above are hereby incorporated into this Agreement as if
fully set forth herein.

 

2.                                       Definitions.  The
following capitalized terms used in this Agreement shall have the following
meanings:

 

(a)                                  “Business
Management Agreement” means that certain Business Management Agreement,
dated                         ,
2009, between the Company and the Business Manager.

 

(b)                                 “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

 

(c)                                  “Real Estate
Asset” shall have the meaning ascribed to that term in the Business
Management Agreement.

 

3.                                       Right of Refusal.  For and during the term of this Agreement,
and until the occurrence of a Right of First Refusal Termination Event (as
defined below) with respect to a subject Real Estate Asset identified by
Acquisitions, and subject to the exercise of any prior rights vested in third
parties previously granted by Acquisitions (“Prior Offerees”),
Acquisitions hereby grants to the Company a right of first refusal to acquire
each and every Real Estate Asset, excluding interests in any Real Estate
Operating Company (as defined in the Business Management Agreement), identified
by Acquisitions.

 

4.                                       During the
pendency of a right of first refusal to a Real Estate Asset granted under Section 3
above, Acquisitions covenants and agrees that it shall not (a) present or
offer for sale the subject Real Estate Asset to, (b) forward any
information regarding the subject Real Estate Asset to or (c) pursue the
acquisition of the subject Real Estate Asset, on behalf or for the benefit of
any other person, entity or client except the Company.

 

5.                                       Upon identifying
a Real Estate Asset, subject to the provisions of Section 3 above,
Acquisitions shall deliver written notice to the Company (in form and substance
attached hereto as Exhibit A, each an “Acquisition Notice”)
that Acquisitions has identified, or has entered into a letter of intent or
acquisition agreement with respect to, the applicable Real Estate Asset.  The Acquisition Notice shall confirm that any
third parties that had been granted prior rights to the subject Real Estate
Asset have waived any and all rights to acquire that Real Estate Asset.  The Company shall have ten (10) business
days after the date an Acquisition Notice is delivered to the Company (the “Notice
Period”) to give Acquisitions written notice of whether the Company desires
to acquire the subject Real Estate Asset (a “Company Notice”).  If the Company delivers a Company Notice to
Acquisitions electing to pursue the acquisition, but thereafter the Company
determines not to pursue the acquisition, then the Company shall deliver to Acquisitions
written notice terminating the Company’s interest in pursuing the subject Real
Estate Asset (a “Property Termination Notice”).  At the request of Acquisitions, the Company
shall provide Acquisitions with evidence appointing and setting forth the
authority of Company officers designated to cause the Company to issue Company
Notices and Property Termination Notices.

 

The
Company’s election, whether in response to, or at any time after, its receipt
of an Acquisition Notice, not to pursue the acquisition of a particular Real
Estate Asset shall not affect or impair any of the Company’s rights set forth
in this Agreement with respect to any other Real Estate Asset.

 

Upon
the occurrence of a Right of First Refusal Termination Event with respect to a
subject Real Estate Asset, the Company shall be deemed to have waived any and
all rights to acquire the subject Real Estate Asset, including any corporate
opportunity with respect thereto. For the purposes hereof, the term “Right
of First Refusal Termination Event” means the first to occur of: (i) the
Company’s failure to deliver to Acquisitions a Company Notice with respect to
the subject Real Estate Asset prior to the expiration of the Notice Period; (ii) delivery
by the Company to Acquisitions of a Company Notice not to pursue acquisition of
the subject Real Estate Asset; (iii) failure of the Company to diligently
pursue acquisition of the subject Real Estate Asset after Company Notice to
Acquisitions of the Company’s election to pursue 

 

2

 

acquisition of the subject
Real Estate Asset; or (iv) delivery by the Company of a Property
Termination Notice.

 

6.                                       Acquisition Agreements.  From time to time, Acquisitions may enter
into a letter of intent or other acquisition agreement with respect to a
subject Real Estate Asset in its own name to facilitate, among other things,
the offer to, and possible purchase by, the Company of the subject Real Estate
Asset.  In any such case, if the Company
exercises its right of first refusal with respect to, and elects to pursue the
acquisition of, the subject Real Estate Asset, and the Company is willing to
enter into an agreement to acquire the subject Real Estate Asset, then upon the
Company’s request, Acquisitions shall assign the letter of intent or other
acquisition agreement to the Company or its designee.

 

7.                                       Reimbursements.  Section 9(b)(ii) of
the Business Management Agreement shall be, and hereby is, incorporated into
this Agreement by reference with the same force and effect as if set forth
herein.  Notwithstanding the earlier
termination, if any, of the Business Management Agreement, the Company hereby
agrees to reimburse Acquisitions in accordance with Section 9(b)(ii) of
the Business Management Agreement in the manner specified thereunder.  The Parties agree that there shall be no
duplication of payment for any services rendered with respect to any subject
Real Estate Asset under this Agreement and the Business Management Agreement.

 

8.                                       No Partnership or Joint Venture.  The Parties to this Agreement are independent
contractors.  Nothing in this Agreement
is intended or shall be deemed to constitute a partnership, agency, franchise
or joint venture relationship between the Parties.

 

9.                                       Term.  This term
of this Agreement shall commence on the date hereof, shall continue
concurrently with the term of the Business Management Agreement, as the same
shall be renewed; provided, however, that the Agreement shall
terminate upon the occurrence of a Change in Control (as defined herein).  In the event of the termination of the
Business Management Agreement for any reason, this Agreement shall terminate
simultaneously with the termination of the Business Management Agreement.

 

For purposes of this Section 9,
the term “Change in Control” shall mean:

 

(a)                                  Any sale,
lease, exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Company to any
person or group of related persons for purposes of Section 13(d) of the
Exchange Act; provided,  however,  that any sale, lease, exchange or
transfer to (including, without limitation, any merger or other business
combination with or into) any of the following shall not constitute a Change in
Control: (i) any affiliate controlled by the Company; (ii) Inland
Real Estate Corporation; (iii) Inland Western Retail Real Estate Trust, Inc.;
(iv) Inland American Real Estate Trust, Inc.; (v) The Inland
Group, Inc.; (vi) Inland Real Estate Investment Corporation; or (vii) any
affiliate controlled by, or sponsored by, any of the persons or entities listed
in clauses (i) through (vi) above (all of the persons and entities
described in clauses (i) through (vii) above to be hereinafter
sometimes referred to as the “Inland Companies”);

 

3

 

(b)                                 The approval by
the holders of the outstanding shares of the Company of any plan or proposal
for the liquidation or dissolution of the Company;

 

(c)                                  Any person or
group of related persons for purposes of Section 13(d) of the
Exchange Act (other than any one or more of the Inland Companies) shall become
the owner, directly or indirectly, beneficially or of record, of shares of the
Company representing more than twenty-five percent (25%) of the aggregate ordinary
voting power represented by the issued and outstanding common shares of the
Company; or

 

(d)                                 Following any
change in the composition of the board of directors of the Company, a majority
of the board of directors of the Company are not a combination of either (i) members
of the board of directors of the Company as of the date hereof, or (ii) members
of the board of directors of the Company whose nomination for election or
election to the board of directors of the Company has been recommended,
approved or ratified by at least eighty percent (80%) of the board of directors
of the Company then in office who were either members of the board of directors
of the Company as of the date hereof or whose election as a member of the board
of directors of the Company was previously so approved pursuant to this clause
(ii), or (iii) members of the board of directors of the Company who have
been elected pursuant to a proxy consent other than in connection with a
business combination transaction that would otherwise result in a “Change in Control”
under Section 9(a) or Section 9(c).

 

10.                                 Assignments. 
Except in the case of assignment by a Party to a corporation, trust or
other organization which is a successor to such Party, this Agreement may not
be assigned by any Party hereto without the prior written consent of the other
Parties.  Any assignment of this
Agreement shall bind the assignee hereunder in the same manner as the assignor
is bound hereunder.

 

11.                                 Amendments.  This
Agreement shall not be amended, changed, modified, terminated or discharged in
whole or in part except by an instrument in writing signed by each Party hereto
or their respective successors or assigns.

 

12.                                 Successors and Assigns.  This Agreement shall bind any successors or
assigns of the Parties hereto as herein provided.

 

13.           Governing Law.  The provisions of this Agreement shall be
governed, construed and interpreted in accordance with the internal laws of the
State of Illinois without regard to its conflicts of law principles.

 

14.                                 Notices.  All notices
or other communications required or permitted hereunder shall be in writing and
shall be deemed given or delivered:  (i) when
delivered personally or by commercial messenger; (ii) one business day
following deposit with a recognized overnight courier service, provided the
deposit occurs prior to the deadline imposed by the overnight courier service
for overnight delivery; (iii) when transmitted, if sent by facsimile copy,
provided confirmation of receipt is received by sender and is sent by an additional
method provided hereunder, in each case above provided the notice of
communication is addressed to the intended recipient thereof as set forth
below:

 

4

 

	
  If to Acquisitions:

  	
   

  	
  with a copy to:

  
	
  Inland
  Real Estate Acquisitions, Inc.

  	
   

  	
  The
  Inland Real Estate Group, Inc.

  
	
  2901
  Butterfield Road

  	
   

  	
  Law
  Department

  
	
  Oak
  Brook, IL 60523

  	
   

  	
  2901
  Butterfield Road

  
	
  Attention:

  	
  G.
  Joseph Cosenza

  	
   

  	
  Oak
  Brook, IL 60523

  
	
  Telephone:

  	
  (630)
  218-8000

  	
   

  	
  Attention:
  

  	
  Elliot
  B. Kamenear

  
	
  Facsimile:

  	
  (630)
  218-4935

  	
   

  	
  Telephone:
  

  	
  (630)
  218-8000

  
	
   

  	
   

  	
   

  	
  Facsimile:
  

  	
  (630)
  218-4900

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  If to the Business Manager:

  	
   

  	
  with a copy to:

  
	
  Inland
  Business Manager & Advisor, Inc.

  	
   

  	
  The
  Inland Real Estate Group, Inc.

  
	
  2901
  Butterfield Road

  	
   

  	
  Law
  Department

  
	
  Oak
  Brook, IL 60523

  	
   

  	
  2901
  Butterfield Road

  
	
  Attention:

  	
  Barry
  L. Lazarus

  	
   

  	
  Oak
  Brook, IL 60523

  
	
  Telephone:

  	
  (630)
  218-8000

  	
   

  	
  Attention:
  

  	
  Cathleen
  M. Hrtanek

  
	
  Facsimile:

  	
  (630)
  218-4955

  	
   

  	
  Telephone:
  

  	
  (630)
  368-2257

  
	
   

  	
   

  	
   

  	
  Facsimile:
  

  	
  (630)
  218-4900

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  If to the Company:

  	
   

  	
  with a copy to:

  
	
  Inland
  Diversified Real Estate Trust, Inc.

  	
   

  	
  The
  Inland Real Estate Group, Inc.

  
	
  2901
  Butterfield Road

  	
   

  	
  Law
  Department

  
	
  Oak
  Brook, IL 60523

  	
   

  	
  2901
  Butterfield Road

  
	
  Attention:

  	
  Roberta
  S. Matlin

  	
   

  	
  Oak
  Brook, IL 60523

  
	
  Telephone:

  	
  (630)
  218-8000

  	
   

  	
  Attention:
  

  	
  Cathleen
  M. Hrtanek

  
	
  Facsimile:

  	
  (630)
  218-4955

  	
   

  	
  Telephone:
  

  	
  (630)
  368-2257

  
	
   

  	
   

  	
   

  	
  Facsimile:
  

  	
  (630)
  218-4900

  

 

Any
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 14.  Copies of notices are for informational
purposes only, and a failure to give or receive copies of any notice shall not
be deemed a failure to give notice, and shall in no way adversely affect the
effectiveness of such notice to the addressee Party.

 

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

 

16.                                 Equitable Relief.  Each Party hereto recognizes
and acknowledges that a breach by another Party to this Agreement may cause
irreparable damage to the non-breaching Party or Parties which cannot be
readily remedied in monetary damages in an action at law.  In the event of any default or breach by a
Party, the non-breaching Parties shall be entitled to seek immediate injunctive
relief to prevent such irreparable harm or loss, in addition to any other
remedies available at law and in equity.

 

[THE REMAINDER OF THIS PAGE INTENTIONALLY BLANK]

 

5

 

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

 

	
  INLAND
  REAL ESTATE ACQUISITIONS, INC.

  	
   

  	
  INLAND
  DIVERSIFIED REAL ESTATE TRUST, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INLAND
  DIVERSIFIED BUSINESS  MANAGER &
  ADVISOR, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  	
   

  

 

6

 

EXHIBIT A

FORM OF ACQUISITION NOTICE

 

ACQUISITION NOTICE

 

[NAME OF SUBJECT REAL ESTATE
ASSET]

[GENERAL LOCATION]

[CITY, STATE]

[DATE OF ACQUISITION NOTICE]

 

Inland Diversified Real Estate Trust, Inc.

2901 Butterfield Road

Oak Brook, IL  60523

Attention:         Barry
L. Lazarus

 

Reference
is made to that certain Property Acquisition Agreement, dated as of                         ,
2009 (the “Agreement”), by and between Inland Real Estate Acquisitions, Inc.,
an Illinois corporation (“Acquisitions”), Inland Diversified Business
Manager & Advisor, Inc., an Illinois corporation,  Inland Diversified Real Estate Trust, Inc.,
a Maryland corporation (the “Company”). 
Capitalized terms used in this Acquisition Notice but not defined herein
shall have the meanings ascribed to such terms in the Agreement.

 

Pursuant
to Section 3 of the Agreement, Acquisitions has identified the
following Real Estate Asset: [DESCRIBE REAL ESTATE ASSET].  Attached hereto for your review is our
standard, preliminary “deal sheet” for the subject Real Estate Asset.  This letter constitutes the Acquisition
Notice under and pursuant to the Agreement with respect to the subject Real
Estate Asset and confirmation that all other parties having rights to purchase
this Real Estate Asset have waived such rights.

 

Please
direct all correspondence with respect to the subject Real Estate Asset to
Acquisitions as follows:

 

Inland Real Estate Acquisitions, Inc.

2901 Butterfield Road

Oak Brook, IL 
60523

	
  Attention:

  	
  G. Joseph Cosenza

  
	
  Telephone:

  	
  (630)
  218-8000

  
	
  Facsimile:

  	
  (630) 218-4935

  

 

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  INLAND
  REAL ESTATE ACQUISITIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Its:

  	
   

  

 

We
hereby elect o to acquire, o not to acquire
the above referenced Real Estate Asset.

 

Inland
Diversified Real Estate Trust, Inc.

 

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Its:

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