Document:

EXHIBIT 10.2

 

FORM OF MASTER REAL ESTATE MANAGEMENT AGREEMENT

 

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

 

WITNESSETH:

 

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

 

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

 

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

 

1.             Effective
Date.  Effective as of the date
hereof, the Company hereby retains the Manager to manage certain Properties
acquired by the Company.  This Agreement
is not an exclusive management agreement and the Manager acknowledges and
agrees that the Company may engage other management companies to manage the
Properties.

 

2.             Terms and
Conditions.

 

a.             If Company desires
Manager to manage a Property directly, Manager, Company and affiliate of
Company holding title to the applicable Property shall enter into a Real Estate
Management Agreement in form and substance as attached hereto as Exhibit A
(the “Management Agreement”).  The
initial term of each Management Agreement shall commence on the date of
acquisition by the Company of the Property and shall end December 31 of
the year in which the Property was acquired, with renewal periods as described
in the Management Agreement.

 

b.             If Company desires
Manager to oversee the management of a Property or company, as the case may be,
Manager and Company shall enter into an Oversight Agreement in the form and
substance as attached hereto as Exhibit B (the “Oversight Agreement”).  The initial term of each Oversight Agreement
shall commence on the date of acquisition by the Company of the Property or
company, as the case may be, and shall end December 31 of the year in
which the Property was acquired, with renewal periods as described in the
Oversight Agreement.  In no event shall
the Manager and Company enter into both a Management Agreement and an Oversight
Agreement for the same Property.

 

 

3.             Term
and Termination.

 

a.             Term.  The term of this Agreement shall begin on
[                    ]
[    ], 20[    ] and end on December 31,
20[    ] (the “Initial Term”).  Unless terminated as provided in Section 3(b) below,
the term shall thereafter automatically renew for successive one-year periods
(each, a “Renewal Term”), with the first such one-year renewal period
commencing on January 1, 20[    ], and ending on December 31,
20[    ].

 

b.             Termination.

 

i.              Either party may
terminate this Agreement if sixty (60) days prior to the expiration of the
Initial Term or the current Renewal Term, as applicable, it notifies the other
party hereto in writing that it elects to terminate this Agreement, in which
case this Agreement shall be terminated on the last day of the Initial Term or
the current Renewal Term, if applicable. 
Manager, between ninety (90) and sixty (60) days prior to the expiration
of the Initial Term and each Renewal Term, shall notify the independent members
of the Company’s Board of Directors, of Company’s right to cancel this
Agreement pursuant to this Section 3(b)(i).

 

ii.             Additionally, at any
time, the Company may terminate this Agreement, without cause or penalty, upon
a vote of a majority of the Company’s independent directors by providing no
less than sixty (60) days written notice to Manager.

 

iii.            At the sole option of
the Company, this Agreement shall be terminated immediately upon written notice
of termination from the Board of Directors of the Company to the Manager if any
of the following events occurs:

 

(A)          the Manager violates any
provisions of this Agreement and after notice of such violation fails to cure
the default within thirty (30) days;

 

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

 

(C)           the 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 Manager or for any substantial part
of its property, or makes any 

 

2

 

general assignment for the
benefit of creditors, or fails generally to pay its debts, as they become due.

 

(D)          The Manager agrees that
if any of the events specified in subsections (B) and (C) of this Section 3(b)(iii) occur,
it will give written notice thereof to the Company within seven (7) days
after the occurrence of the event.

 

c.             Effect of
Termination.  Upon termination of
this Agreement, all Management Agreements and Oversight Agreements entered into
among the Company, its affiliates and Manager shall automatically
terminate.  In addition, upon termination
of this Agreement, the Manager shall cooperate with the Company and take all
reasonable steps requested by the Company to assist it in making an orderly
transition of the functions performed by Manager.

 

4.             Indemnification.

 

a.             The Company shall
indemnify the 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 Indemnitee 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 of the Company.

 

b.             The Company shall not
indemnify any person or entity for losses, liabilities or expenses arising
from, or out of, an alleged violation of federal or state securities laws by
any party seeking indemnity unless one or more of the following conditions are
met:

 

i.              there has been a
successful adjudication on the merits of each count involving alleged
securities law violations as to the particular person or entity;

 

ii.             the claims have been
dismissed with prejudice on the merits by a court of competent jurisdiction as
to the particular person or entity; or

 

3

 

iii.            a court of competent
jurisdiction approves a settlement of the claims and finds that indemnification
of the settlement and related costs should be made and the court considering
the request has been advised of the position of the Securities and Exchange
Commission and the published opinions of any state securities regulatory
authority in which securities of the Company were offered and sold with respect
to the availability or propriety of indemnification for securities law
violations.

 

c.             The Company shall
advance amounts to persons entitled to indemnification hereunder for legal and
other expenses and costs incurred as a result of any legal action for which
indemnification is being sought only if all of the following conditions are
satisfied:

 

i.              the legal action
relates to acts or omissions with respect to the performance of duties or
services by the Indemnitee for or on behalf of the Company;

 

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

 

5.             Company’s
Representative.  Company designates Inland Diversified
Business Manager and Advisor, Inc. as Company’s Representative or any
other person or entity designated by Company in all dealings with Manager
hereunder. Whenever the notification and reporting to Company or the approval,
consent or other action of Company is called for hereunder, any notification
and reporting if sent to or specified in writing to Company’s Representative,
and any approval, consent or action if executed by any of the officers of
Company’s Representative, shall be binding on Company. Company’s Representative
address for delivery of reports or notice shall be:

 

	
  Name

  	
   

  	
  Address

  
	
  Inland Diversified
  Business Manager and

  	
   

  	
  2901
  Butterfield Road

  
	
  Advisor, Inc.

  	
   

  	
  Oak Brook,
  IL 60523

  
	
  Attn.
  Ms. Roberta S. Matlin,

  	
   

  	
  Telephone:

  	
  (630)
  218-8000

  
	
  President

  	
   

  	
  Facsimile:

  	
  (630)
  218-4955

  

 

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

 

6.             Notices.  Any notice, report or other communication
required or permitted to be given hereunder shall be in writing unless some
other method of giving such notice, report or 

 

4

 

other
communication is accepted by the party to whom it is given and shall be given
by being delivered at the following addresses of the parties hereto:

 

	
  If to the Company, to:

  	
   

  	
  Inland Diversified Real Estate Trust, Inc.

  
	
   

  	
   

  	
  2901 Butterfield Road

  
	
   

  	
   

  	
  Oak Brook, IL 60523

  
	
   

  	
   

  	
  Attention:

  	
  Ms. Roberta S. Matlin,

  
	
   

  	
   

  	
   

  	
  Vice
  President

  
	
   

  	
   

  	
  Telephone:

  	
  (630)
  218-8000

  
	
   

  	
   

  	
  Facsimile:

  	
  (630) 218-4955

  
	
   

  	
   

  	
   

  
	
  If to the Manager, to:

  	
   

  	
  [Management Company] LLC

  
	
   

  	
   

  	
  2901 Butterfield Road

  
	
   

  	
   

  	
  Oak Brook, IL 60523

  
	
   

  	
   

  	
  Attention:

  	
  Thomas P. McGuinness

  
	
   

  	
   

  	
  Telephone:

  	
  (630)
  218-8000

  
	
   

  	
   

  	
  Facsimile:

  	
  (630) 218-4955

  

 

Either party
may at any time give notice in writing to the other party of a change of its
address for the purpose of this Section 6.

 

7.             Miscellaneous.

 

a.             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 Company or Manager for the performance
by Company 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.  Manager and
Company shall not be construed as joint venturers or partners of each other
pursuant to this Agreement, and neither shall have the power to bind or
obligate the other except as set forth herein. In all respects, the status of
Manager to Company under this Agreement is that of an independent contractor.

 

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

 

c.             This
Agreement shall be binding upon the successors and assigns of Manager and the
heirs, administrators, executors, successors and assignees of Company.  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 

 

5

 

except as herein contained. This Agreement may be modified solely by a
written agreement executed by both parties hereto.

 

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

 

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

 

f.              All
exhibits and schedules attached to this Agreement are hereby incorporated by
reference.

 

[THE REMAINDER OF THIS PAGE INTENTIONALLY
BLANK]

 

6

 

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

 

	
  COMPANY:

  	
  PROPERTY
  MANAGER:

  
	
   

  	
   

  
	
  INLAND DIVERSIFIED REAL ESTATE TRUST, 

  	
  [MANAGEMENT COMPANY] LLC

  
	
  INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  

 

 

EXHIBIT A

 

FORM OF MANAGEMENT AGREEMENT

 

See attached.

 

 

REAL ESTATE MANAGEMENT AGREEMENT

 

THIS REAL ESTATE MANAGEMENT AGREEMENT (this “Agreement”),
dated as of
[                    ]
[    ], 20[    ], is entered into by
and between [SINGLE MEMBER LLC] (“Owner”), and [Management Company] LLC, a
Delaware limited liability company (the “Manager”).

 

WHEREAS, Owner’s
ultimate parent company, Inland Diversified Real Estate Trust, Inc. (the “Parent
Company”) directly or indirectly owns or controls Owner;

 

WHEREAS, the
Parent Company intends to qualify to be taxed as a real estate investment trust
pursuant to the terms of its articles of incorporation (the “Articles of
Incorporation”) and bylaws (the “Bylaws”), as each may be amended from time to
time;

 

WHEREAS, Owner
and the Parent Company desire to avail themselves of the experience, sources of
information, advice, assistance and facilities available to the Manager and to
have the Manager undertake the duties and responsibilities hereinafter set
forth, on behalf of, and subject to the supervision of, the board of directors
of the Parent Company (the “Board of Directors”) and the Owner’s Representative
(as defined below), all as provided herein; and

 

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

 

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

 

1.             Exclusive Management. 
Owner hereby engages Manager exclusively (subject to Section 4
below), to perform the services described herein for the property legally
described on Exhibit A attached hereto and made a part hereof (the “Premises”),
upon the terms and conditions hereinafter set forth herein and Manager accepts
such exclusive engagement.

 

2.             Term and Termination.

 

a.             Term.  The term of this Agreement shall begin on
[                    ]
[    ], 20[    ] and end on December 31,
20[    ] (the “Initial Term”).  Unless terminated as provided in Section 2(b) below,
the term shall thereafter automatically renew for successive one-year periods
(each, a “Renewal Term”), with the first such one-year renewal period
commencing on January 1, 20[    ], and ending on December 31,
20[    ].

 

b.             Termination.

 

i.              Either party may
terminate this Agreement if sixty (60) days prior to the expiration of the
Initial Term or the current Renewal Term, as applicable, it notifies the other
party hereto in writing that it elects to terminate this Agreement, in which
case this Agreement shall be terminated on the last day of the Initial Term or
the current Renewal Term, if applicable. 
Manager, between ninety (90) and sixty (60) days prior to the expiration
of the Initial Term and each Renewal 

 

 

Term, shall notify the independent members of the Board of Directors,
of Owner’s right to cancel this Agreement pursuant to this Section 2(b)(i).

 

ii.             Additionally, at any
time, the Owner may terminate this Agreement, without cause or penalty, upon a
vote of a majority of the Parent Company’s independent directors by providing
no less than sixty (60) days written notice to Manager.

 

iii.            At the sole option of
the Owner, this Agreement shall be terminated immediately upon written notice
of termination from the Owner to the Manager if any of the following events
occurs:

 

A.                                   the
Manager violates any provisions of this Agreement and after notice of such
violation fails to cure the default within thirty (30) days;

 

B.                                     a
court of competent jurisdiction enters a decree or order for relief in respect
of the 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 Manager or for any substantial part of its property or orders
the winding up or liquidation of the Manager’s affairs; or

 

C.                                     the
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 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.

 

D.                                    The
Manager agrees that if any of the events specified in subsections (B) and (C) of
this Section 2(b)(iii) occur, it will give written notice
thereof to the Company within seven (7) days after the occurrence of the
event.

 

3.             Manager Duties.  Owner
hereby gives Manager the exclusive authority and power, as agent for Owner, to
provide the services listed in this Section 3 or elsewhere in this
Agreement, and Owner agrees to reimburse Manager, its affiliates for all
expenses paid or incurred in connection therewith.  Manager shall be entitled at all times to
manage the Premises in accordance with Manager’s standard operating policies
and procedures all in accordance with the budget approved by Owner, except to
the extent that any specific provisions contained herein are to the contrary,
in which case Manager shall manage the Premises consistent with the specific
provisions of this Agreement.

 

2

 

a.             Collection of
Gross Income.

 

i.              Manager shall
collect all rents or assessments and other items due Owner related to the
Premises (all such items being referred to herein as “Gross Income”).  Manager shall give Owner receipts therefore
and deposit all such Gross Income collected hereunder in Manager’s custodial
account which Manager will open and maintain, in a state or national bank of
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 parent of
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 the custodial account.
Manager may endorse any and all checks received in connection with the
operation of the Premises and drawn to the order of Owner and Owner shall, upon
request, furnish Manager’s depository with an appropriate authorization for
Manager to make the endorsement.

 

ii.             When applicable,
Manager shall collect and bill for security deposits or assessments and other
items, including but not limited to calculating, preparing and mailing all
invoices for 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 as stipulated in the leases.  At the request of Owner, Manager will
administer, and create if necessary, a bill-back program for tenant utility
consumption unless prohibited by local law.

 

b.             Payment of
Expenses.  Manager shall pay all
expenses of Owner with respect to the Premises from the Gross Income collected
in accordance with Section 3(a)(i) hereof, from the custodial
account established for the Premises using Owner approved software. In the
event that expenses paid pursuant to this Section 3(b) exceed
Gross Income for any monthly period, Manager shall notify Owner of same. Owner
shall pay the excess amount immediately upon request from Manager, and nothing
herein contained shall obligate Manager to advance its own funds on behalf of
Owner.

 

c.             Annual Budgets.  Manager shall prepare an annualized budget
for operation of the Premises and submit to Owner for approval (the “Annualized
Budget”).  Manager will use its
commercially reasonable efforts to operate the Premises pursuant to the
Annualized Budget, provided, however, Manager shall have no liability to Owner
for failure to meet such Annualized Budget. 
The Annualized Budget shall include a comparison back to the original
underwriting performed at the time of Owner’s acquisition of the Premises and
prior year performance.  The first
Annualized Budget has been prepared and approved for the year commencing
[                    ],
[    ] 20[    ] and ending on December 31,
20[    ]. 
Notwithstanding the period covered by the first Annualized Budget, all
subsequent Annualized Budgets shall cover the period from 

 

3

 

January 1st of each year through December 31st of the same
year. The proposed Annualized Budget for each calendar year shall be submitted
by Manager to Owner by December 1st of the year preceding the year for
which it applies, and Owner shall notify Manager within fifteen (15) days as to
whether Owner has or has not approved the proposed Annualized Budget. If Owner
does not approve the proposed Annualized Budget, Owner shall notify Manager and
Manager shall make the necessary amendments to the Annualized Budget. During
the time Manager is preparing these amendments, Manager will continue to
operate the Premises according to the last approved Annualized Budget. Owner’s
approval of the Annualized Budget shall constitute approval for Manager to
expend sums for all budgeted expenditures, without the necessity to obtain
additional approval of Owner under any other expenditure limitations as set
forth elsewhere in this Agreement.

 

d.             Non-Budgeted
Expenses over $20,000.  Manager shall
secure the approval of, and execution of appropriate agreements by, Owner for
any non-budgeted and non-emergency/contingency capital items, alterations or
other expenditures in excess of Twenty Thousand Dollars ($20,000.00) for any
one item, securing for each item at least three (3) written bids, if
practicable, or providing evidence satisfactory to Owner that the agreed 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 its affiliates and third party agents; provided
that contract rates and prices are competitive with other available sources.
Manager may at any time, and from time to time, request and receive the prior
written authorization of Owner of any one or more purchases or other
expenditures, notwithstanding that Manager may otherwise be authorized
hereunder to make such purchases or expenditures.

 

e.             Third-Party
Agreements.  Owner hereby appoints
Manager as Owner’s authorized agent for the purpose of executing, as agent for
Owner, any agreements with third-parties necessary for operation of the
Premises.  For example, and not in
limitation of the foregoing, Manager shall negotiate and enter into contracts
for services and items in the Annualized Budget relating to the Premises.

 

f.              Manager Employees.  Manager shall hire, supervise, discharge and
pay salary and benefit expenses for all employees of Manager determined
necessary to perform Manager’s duties described in this Agreement including,
but not limited to managers, assistant managers, leasing consultants,
engineers, janitors and maintenance supervisors.  All expenses of such employment, including
but not limited to, wages, salaries, insurance, benefits, employment related taxes,
overhead and other governmental charges, shall be deemed operational expenses
of the Premises and Owner shall reimburse Manager for such expenses which may
be charged to Owner on a per square foot basis. 
Notwithstanding the foregoing, salaries and benefits of Manager’s
employees who also serve as the one of the Parent Company’s executive officers
or as an executive officer of the Manager shall not be reimbursed by the
Owner.  The number and classification of
employees serving the Premises shall be as determined by Manager to be
appropriate for the proper operation of the Premises; provided that
Owner may request changes in the number or classification of employees, and
Manager shall make all requested changes unless in its judgment the resulting
level of operation or maintenance 

 

4

 

of the Premises will be inadequate. [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 Manager shall not assume or otherwise become a party to any collective
bargaining contract for any purpose whatsoever and all personnel subject to a
collective bargaining contract shall be considered the employees of the Owner
and not Manager (delete bracketed text if not applicable to Premises].

 

g.             Insured Losses.

 

i.              Manager shall be
responsible for taking all steps necessary to file any claim for insured losses
or damages; provided that Manager will not make any adjustments or settlements
in excess of $50,000.00 without Owner’s prior written consent.

 

ii.             Manager shall
coordinate with the appropriate insurance company or companies, if applicable,
to process claims.

 

iii.            Manager shall
administer compliance of insurance provisions of tenant leases for all vendors
and commercial tenants, including confirming insurance requirements for any
special events at the Premises and obtaining certificates of insurance.

 

iv.            At the request of
Owner, Manager shall assist Owner’s insurance consultants with any necessary
insurance matters.

 

v.             Manager shall attend
Owner’s Representative’s meetings regarding loss control and claims.

 

h.             Monthly Remittance.  Manager shall remit to Owner the excess of
Gross Income over expenses paid pursuant to Section 3(b) hereof
(“Net Proceeds”) for each month as directed by Owner at the address as stated
in Section 7 hereof.

 

i.              Reporting.  Upon the request of Owner, Manager shall
render reports for the Premises.  Such
reports may include specific and detailed line item information for budget
comparison, expense detail, payables and receivables information, leasing
progress, marketing information, peer comparison and all other measurements of
the key performance indications of the Premises.

 

j.              Litigation.  Manager shall institute and prosecute actions
to evict tenants and to recover possession of the Premises or portions thereof,
to sue for in the name of Owner of the Premises and recover rent and other sums
due; and to settle, compromise and release such actions or suits, or reinstate
such tenancies; provided, however, if the tenancy subject to such proceedings
is of a term greater than fourteen (14) months, Manager shall obtain Owner’s
consent prior to instituting any such proceedings.  All expenses of litigation including, but not
limited to, attorneys’ fees, filing fees and court costs that 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 

 

5

 

operational expenses of the Premises. Manager and Owner shall concur on
the selection of the attorney to handle any litigation.

 

k.             Replacements and
Repairs.  Pursuant to the Applicable
Budget and when applicable, Manager shall make or cause to be made all ordinary
repairs and replacements necessary to preserve the Premises in its present
condition, in all material respects, and for the operating efficiency
thereof.  Manager shall also perform all
alterations required to comply with any lease requirements including, but not
limited to, working with municipalities to comply with any code or lender
requirements, attending lender inspections and assisting with the lender
reserve requirement process.

 

l.              Leasing Services.

 

i.              Manager shall
perform leasing services for the Premises, including, but not limited to,
hiring all brokers, negotiating contracts with these brokers, tracking brokers
progress on all assets, determining when to terminate and replace brokers if
necessary.  Both commissions paid to
brokers and any bonus amount paid to Manager’s leasing employees monitoring the
leasing process shall be an expense of the Premises and charged to Owner.

 

ii.             Manager shall
establish a leasing committee comprised of Manager employees to oversee the
leasing services rendered to Owner under this Agreement (the “Leasing Committee”).  The Leasing Committee shall hold monthly
meetings to which Owner’s Representative may attend (the “Leasing Committee
Meetings”).

 

iii.            Manager shall monitor
current market conditions, meet with tenants, brokers and future prospects and
competitive properties in the surrounding area. 
Manager shall report findings at the Leasing Committee Meetings.

 

iv.            From time to time,
Manager shall attend conferences related to the asset class of the Premises,
including, but not limited to, ICSC, BOMA, NARIET, NAA, NMHC and NAIOP, as
applicable.  If requested by Owner,
Manager shall appropriately staff booths for Owner at such conferences to
represent Owner’s interests and coordinate all necessary marketing materials
and events to maximize Owner’s exposure at such conferences.

 

v.             Manager shall
negotiate all letters of intent for new leases (when applicable) and administer
existing leases, including, but not limited to, processing assignments, renewal
agreements and lease amendments.  Manager
shall process any lease documents in the most cost-efficient manner possible.

 

vi.            Manager shall evaluate
leasing activity of Premises and identify potential re-developments or
re-configurations, including, but not limited to, a discussion of all proposals
that have been sent, targeted tenants, interested and un-interested party
discussions with the Leasing Committee.

 

6

 

vii.           Manager shall track all
leasing calls and inquiries.

 

viii.          Manager shall prepare
and maintain leasing reports as required by Owner which shall track performance
of leasing activity.

 

ix.            Manager shall review
tenant credit reports for new tenants and assignments.  When applicable, such review may include, but
not be limited to, preparing full financial packages of review of both
corporate and individual financial investigations, net worth analysis, net
present value calculations and any other financials measure requested by the
Owner.  Manager shall be entitled to
charge tenant for credit check fees and lease assignment fees (if provided by
applicable lease) and shall not be required to remit such fees to Owner.

 

x.             If a proposed new
lease for the Premises is outside the parameters set by the Annualized Budget,
Manager shall complete analysis of credit and financials of such lease for the
Leasing Committee’s review and approval at the Leasing Committee Meeting.

 

xi.            If the Premises is a
retail property, Manager shall review leases on an on-going basis for
relocation clauses, co-tenancy clauses, exclusives and building restrictions to
determine and avoid any conflicts. 
Manager shall also monitor tenant progress to make recommendations to
Leasing Committee on renewal of tenants and proper tenant mix.  Additionally, Manager shall perform a
on-going market review to determine market rates for leasing at Premises and
make recommendations to Owner for changes in budgeted lease rates.

 

xii.           With respect to
replacing tenants, Manager shall provide consultation regarding tenant mix (if
the Premises has more than one tenant), market analysis, comparison information
and site visits for leasing potential.

 

xiii.          If the Premises is a
retail property, Manager shall schedule and attend meetings on a regular basis
with all major retailers for portfolio review and additional leasing
opportunities.  In preparation for such
meetings, Manager shall perform a full analysis of tenant performance on an
site by site bases for sales, profitability, expansions, space modifications
and tenant merchandising assistance.

 

m.            Operations.

 

i.              Manager shall
oversee capital expenditure execution and projection.

 

ii.             Manager shall oversee
construction management of all new tenant build-outs and provide assistance
with out-parcel development.

 

iii.            As requested by Owner
and if available for the Premises, Manager shall obtain and administer bulk
purchasing and cost efficiency programs for utilities.

 

7

 

iv.            Manager shall monitor
the environmental needs of the Premises including, but not limited to, the
administration of operation and maintenance programs.  If applicable, Manager shall supervise any
remediation projects.

 

v.             Manager shall review
and approve architectural plans for space and signage on the Premises.

 

vi.            Manager shall create
preventative maintenance programs for the Premises and oversee crisis
management for flood, fire, and hurricanes, etc.

 

n.             Marketing.

 

i.              At the request of
Owner, Manager shall create a marketing program for the Premises, including,
but not limited to, preparing and maintaining a website.

 

ii.             If the Premises is a
retail property and at the request of Owner, Manager shall:

 

A.                                   Devote
specialty leasing staff to Premises to generate additional revenue through
seasonal, temporary, kiosk leasing and finding and development incubator
tenants.

 

B.                                     Organize
events for charity programs as well as community events to increase traffic and
sales.

 

C.                                     Sponsor
program and gift cards for the Premises where it is necessary to improve sales
and revenue for the Premises.

 

D.                                    Advertise
the Premises including, but not limited to, printing and sending coupons and
mailers for the Premises.

 

E.                                      Organize
tenant training through merchant or association meetings.

 

iii.            If the Premises is a
multi-family property, at the request of Owner, Manager shall:

 

A.                                   Advertise
the Premises, including, but not limited to advertising through signage, on
websites, in local newspapers and rental guides, and with area referral
services.

 

B.                                     Establish
a marketing committee comprised of Manager employees (the “Marketing Committee”)
who will meet monthly to discuss marketing strategy and implement such
strategy.

 

C.                                     Prepare
weekly status reports that will summarize the rental activity of the Premises
for the previous week.

 

o.             Real Estate
Consultative Services.

 

i.              Upon request of
Owner, Manager shall explore strategic alternatives for the Premises.  In addition, Manager shall use a budget and 

 

8

 

forecasting tool, e.g., Cougar software, to assist in continuous review
of Premises performance.

 

ii.             Manager shall attend
committee meetings at the request of Owner.

 

iii.            Manager shall provide
oversight and management of disposition of the Premises if requested by Owner.

 

iv.            At the request of
Owner, Manager shall perform additional tasks such as evaluating best use,
taking calls for offers to purchase existing properties, determining potential
out-parcel development, and reviewing additional GLA capabilities.

 

v.             Manager shall assist
Owner’s Representative in analyzing the Premises for potential asset impairment
issues.

 

vi.            If applicable, Manager
shall work with Owner’s Representative on CAM payment best-practice compliance
and review of business intelligence and information management systems.

 

p.             Electronic
Document Management.  Manager shall
organize all documents related to the Premises, including, but not limited to
leases, contracts, invoices checks and receipts, in an electronic format with
constant real time information for Owner’s access.

 

q.             Internal
Controls/Sarbanes-Oxley Compliance. 
If requested by Owner, Manager shall:

 

i.              Dedicate full-time
employees to monitor and review all incoming invoices, leases, and other
control points and procedures dictated by Owner’s auditing firm according to
Owner’s internal control matrix (the “Internal Control Matrix”) as updated from
time to time by Owner.

 

ii.             Attend bi-weekly
meeting with Owner’s Representative to review Internal Control Matrix.

 

iii.            Coordinate audits of
leases.

 

iv.            Travel to satellite
offices to insure internal control compliance and perform random spot checking.

 

v.             Adhere to all
policies stated in Internal Control Matrix.

 

r.              Tenant Credit
Monitoring.  Where applicable,
Manager shall:

 

i.              Continuously monitor
retailers of the Premises that are distressed, weak, and bankrupt and calculate
Z-scores and Frisk scores for all distressed 

 

9

 

tenants (which evaluate a publicly-traded company’s credit and
anticipates bankruptcy).

 

ii.             Monitor gross sales
of retail tenants.

 

iii.            Perform tenant surveys
to foster tenant retention and identify problems.

 

iv.            Dedicate staff to
pursue difficult collection accounts, monitor bankruptcies and resolve material
disputes.

 

s.             Master Leases and
Earnouts.  If the Premises is subject
to a so-called Master Lease or Earnout arrangement, Manager shall dedicated a
staff member to monitor and invoice all of the Master Leases.  Such staff member shall resolve issues
concerning monthly billings, track new tenant move-in dates and authorize
release and close-out of Master Lease escrows. 
In addition, Manager shall reconcile all Master Lease accounts on a
monthly basis.  Manager shall also coordinate
all aspects of Earnouts.

 

t.              Post-Closing and
New Building/Tenant Set-Up Duties. 
Manager shall coordinate any existing post-closing items including, but
not limited to, the transfer of all utilities from the previous owner of the
Premises, CAM reconciliations and prorations, if applicable, and bringing
tenants into Owner’s software system.  In
addition, Manager shall send tenants welcoming letters which include, the
direction to pay all future rents to Manager, wiring instructions, a form W-9,
notification from the previous owner about the sale, a letter of introduction
to property management and lease assignment and related documents, as
requested.

 

4.             SubManager.  Notwithstanding
anything to the contrary contained in this Agreement, Owner acknowledges and
agrees that any of the duties of Manager as contained herein may be delegated
by Manager and performed by an affiliate or third-party agent (a “SubManager”)
with whom Manager contracts for the purpose of performing such duties. Owner
specifically grants Manager the authority to enter management agreements with
any SubManager; provided that Owner shall have no liability or
responsibility to any 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 Owner for all loss,
liability, damage or claims incurred by Owner as a result of the delegation of
duties by Manager to SubManager. Owner further acknowledges and agrees that
Manager may assign this Agreement and all of Manager’s rights and obligations
hereunder, to another management entity that is then managing other property
for Owner (“Successor Manager”). Owner specifically grants Manager the
authority to make an assignment of this Agreement to a Successor Manager.

 

10

 

5.             Manager’s Liability/Indemnification.

 

a.             Parent Company shall
indemnify the Manager and its officers, directors, employees and agents
(individually an “Indemnitee”, collectively the “Indemnitees”) to the same
extent as the Parent Company may indemnify its officers, directors, employees
and agents under its Articles of Incorporation and Bylaws so long as:

 

i.              the Indemnitee has determined, in good faith,
that the course of conduct that caused the loss, liability or expense
was in the best interests of the Owner;

 

ii.             the Indemnitee was
acting on behalf of, or performing services for, the Owner;

 

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 Parent Company’s net assets and not
from any personal assets of any stockholder.

 

b.             Parent Company shall not indemnify any person
or entity for losses, liabilities or expenses arising from, or out of,
an alleged violation of federal or state securities laws by any party seeking
indemnity unless one or more of the following conditions are met:

 

i.              there has been a
successful adjudication on the merits of each count involving alleged
securities law violations as to the particular person or entity;

 

ii.             the claims have been dismissed with prejudice
on the merits by a court of competent jurisdiction as to the particular
person or entity; or

 

iii.            a court of competent
jurisdiction approves a settlement of the claims and finds that indemnification
of the settlement and related costs should be made and the court considering
the request has been advised of the position of the Securities and Exchange
Commission and the published opinions of any state securities regulatory
authority in which securities of Parent Company were offered and sold with
respect to the availability or propriety of indemnification for securities law
violations.

 

c.             Parent Company shall advance amounts to
persons entitled to indemnification hereunder for legal and other
expenses and costs incurred as a result of any legal action for which
indemnification is being sought only if all of the following conditions are
satisfied:

 

i.              the legal action
relates to acts or omissions with respect to the performance of duties or
services by the Indemnitee for or on behalf of the Owner;

 

11

 

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 Parent 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.

 

6.             Management Fee.  Owner
agrees to pay Manager, monthly, a management fee hereunder for the services
provided by Manager hereunder performed directly or through its affiliates or
agents, an amount equal to             
[Not to exceed Four and One-Half Percent (4.5%) – unless approved by Parent
Company’s Board of Directors including a majority of Parent Company’s
independent directors ] of the Gross Income for the month in which the
management fee is paid (the “Management Fee”), which shall be deducted monthly
by Manager and retained by Manager from Gross Income prior to payment to Owner
of Net Proceeds; provided, however, Owner shall authorize the payment and
amount of the monthly fee to Manager prior to the return of Net Proceeds to
Owner. The Management Fee shall be compensation for all services specified in
this Agreement.  Owner acknowledges and
agrees that Manager may pay or assign all or any portion of its Management Fee
to a SubManager as described in Section 4 hereof.

 

7.             Owner’s Representative. 
Owner designates Inland Diversified Business Manager and Advisor, Inc.
as Owner’s Representative or any other person or entity designated by Owner 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 notification and reporting if sent to or specified in writing to
Owner’s Representative, and any approval, consent or action if executed by any
of the officers of Owner’s Representative, shall be binding on Owner. Owner’s
Representative address for delivery of reports or notice shall be:

 

	
  Name

  	
   

  	
  Address

  
	
  Inland
  Diversified Business Manager and 

  	
   

  	
  2901
  Butterfield Road

  
	
  Advisor, Inc.

  	
   

  	
  Oak Brook,
  IL 60523

  
	
  Attn.
  Ms. Roberta S. Matlin,

  	
   

  	
  Telephone:

  	
  (630)
  218-8000

  
	
  President

  	
   

  	
  Facsimile:

  	
  (630)
  218-4955

  

 

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

 

8.             No Structural Alterations.  Owner
expressly withholds from Manager any power or authority to make any structural
changes in any building or to make any other major alterations or additions in
or to any such building or equipment therein, or to incur any expense
chargeable to Owner, other than expenses related to exercising the express
powers above vested in Manager without the prior written direction of Owner’s
Representative, except that Manager shall make all emergency repairs as may be
required to ensure the safety of persons or property or which are immediately
necessary for the preservation and safety of the Premises or the safety 

 

12

 

of the tenants and occupants thereof or are
required to avoid the suspension of any necessary service to the Premises.

 

9.             Notice of Non-Compliance with Laws. 
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 material 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 Owner any material complaints, warnings, notices or summonses
received by Manager relating to these matters.

 

10.           Payment of Fees and Actions upon Termination.

 

a.             The Manager shall not
be entitled to compensation after the date of termination of this Agreement for
further services hereunder, but shall be paid all compensation accruing to the
date of termination. Upon termination of this Agreement, the Manager shall:

 

i.              pay over to Owner
all moneys collected and held for the account of Owner pursuant to this
Agreement, after deducting any accrued compensation and reimbursement for
expenses to which the Manager is entitled;

 

ii.             deliver to Owner a
full accounting, including a statement showing all payments collected by the
Manager and a statement of all money held by the Manager, covering the period
following the date of the last accounting furnished to Owner;

 

iii.            deliver to Owner all
property and documents of Owner or Parent Company then in the custody of the
Manager; and

 

iv.            cooperate with Owner
and take all reasonable steps requested by Owner to assist it in making an
orderly transition of the functions performed by the Manager.

 

b.             Upon termination,
Owner shall specifically assume in writing all obligations under any
third-party agreements entered into by Manager pursuant to Section 3(e) on
behalf of Owner.

 

11.           Survival.  All
provisions of this Agreement that require Owner to have insured, or to protect,
defend, save, hold and indemnify or to reimburse 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
Manager of Owner, such provisions shall apply as if this Agreement were still
in effect.

 

12.           Insurance.  Owner
agrees that Manager may be listed as an additional insured on all insurance policies
related to the Premises.  Owner hereby
authorizes Manager to take all steps necessary to cause Manager to be named as
an additional insured including, but not limited to, obtaining insurance from
Inland Insurance and Risk Management Services.

 

13

 

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

 

	
  If to Owner, to:

  	
   

  	
  Inland
  Diversified Business Manager and Advisor, Inc.

  
	
   

  	
   

  	
  2901
  Butterfield Road

  
	
   

  	
   

  	
  Oak Brook,
  IL 60523

  
	
   

  	
   

  	
  Attention:

  	
  Ms. Roberta
  S. Matlin, President

  
	
   

  	
   

  	
  Telephone:

  	
  (630)
  218-8000

  
	
   

  	
   

  	
  Facsimile:

  	
  (630)
  218-4955

  
	
   

  	
   

  	
   

  
	
  If to Manager, to:

  	
   

  	
  [Management Company] LLC

  
	
   

  	
   

  	
  2901
  Butterfield Road

  
	
   

  	
   

  	
  Oak Brook,
  IL 60523

  
	
   

  	
   

  	
  Attention:

  	
  Thomas P. McGuinness

  
	
   

  	
   

  	
  Telephone:

  	
  (630)
  218-8000

  
	
   

  	
   

  	
  Facsimile:

  	
  (630)
  218-4955

  

 

14.           Miscellaneous.

 

a.             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 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.  Manager and Owner shall not be
construed as joint venturers or partners of each other pursuant to this
Agreement, and neither shall have the power to bind or obligate the other
except as set forth herein. In all respects, the status of Manager to Owner
under this Agreement is that of an independent contractor.

 

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

 

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

 

14

 

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

 

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

 

f.              All exhibits and
schedules attached to this Agreement are hereby incorporated by reference.

 

[THE REMAINDER OF THIS PAGE INTENTIONALLY
BLANK]

 

15

 

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

 

	
  MANAGER:

  	
  OWNER:

  
	
   

  	
   

  
	
  [MANAGEMENT
  COMPANY] LLC, a Delaware 

  	
  [SINGLE
  MEMBER LLC]

  
	
  limited
  liability company

  	
   

  
	
   

  	
   

  
	
  By: INLAND
  DIVERSIFIED MANAGEMENT 

  	
  By: INLAND
  DIVERSIFIED REAL 

  
	
  HOLDCO LLC,
  a Delaware limited liability 

  	
  ESTATE
  TRUST, INC., a Maryland corporation, its sole

  
	
  company, its
  sole member

  	
  member

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  PARENT
  COMPANY (limited to obligations

  
	
   

  	
   

  	
   

  	
  in Section 5
  hereof):

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  INLAND
  DIVERSIFIED REAL ESTATE TRUST,

  
	
   

  	
   

  	
   

  	
  INC., a
  Maryland corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
   

  
							

 

16

 

Exhibit A

 

Legal Description

 

See
attached.

 

17

 

EXHIBIT B

 

FORM OF OVERSIGHT AGREEMENT

 

See attached.

 

18

 

OVERSIGHT AGREEMENT

 

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

 

WHEREAS, the
Company has registered with the Securities and Exchange Commission in a public
offering and intends to qualify to be taxed as a real estate investment trust
pursuant to the terms of its articles of incorporation (the “Articles of
Incorporation”) and bylaws (the “Bylaws”);

 

WHEREAS, the
Company has acquired an interest in the property described on Exhibit A
attached hereto and made a part hereof (the “Premises”);

 

WHEREAS, the
Premises is currently managed by
                                  
(the “Current Manager”) and not by the Manager;

 

WHEREAS, the
Company desires to avail itself of the experience, sources of information,
advice, assistance and facilities available to the Manager and to have the
Manager undertake the duties and responsibilities hereinafter set forth, on
behalf of, and subject to the supervision of, the board of directors of Company
(the “Board of Directors”) and the Company’s Representative (as defined below),
all as provided herein; and

 

WHEREAS, the
Manager is willing to render these services on the terms and conditions
hereinafter set forth.

 

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

 

1.                                       Oversight of Premises and Current Manager.  Company hereby engages Manager to oversee the
performance of the Premises as further described in this Section 1
and Manager accepts such engagement. 
Specifically, Manager shall provide the following services:

 

a.                           Manager
shall monitor the operating performance of the Premises.

 

b.                          Manager
shall arrange monthly meetings with the Company’s Representative (the “Oversight
Meetings”) to discuss the performance of the Premises, including, but not
limited to any issues related thereto.

 

c.                           Manager
shall coordinate with the Company’s Representative and the Current Manager or
joint venture to resolve any integration issues related to the acquisition of
the Premises.

 

d.                          Manager
shall review and approve G&A costs of the Premises.  Such analysis shall include, but not be
limited to, staff needs and office space expenditures.

 

 

e.                           At the
request of the Company, Manager shall respond to documentation requests by
lenders regarding the Premises.

 

f.                             Manager
shall review, approve and manage the relationship with Current Manager on
behalf of Company, including, but not limited to, serving as the Company’s
contact for the Current Manager. 
Likewise, if the Premises is owned by an entity in which the Company has
an interest, Manager shall review, approve and manage the relationship with the
remaining interest holder(s) on behalf of Company, including, but not limited
to, serving as the Company’s contact for remaining interest holder(s).

 

g.                          At
the request of the Company, Manager shall participate in contract negotiations
or renewals with the Current Manager, joint venture partners and lenders with
respect to the Premises.

 

h.                          From
time to time, Manager shall attend conferences related to the asset class of
the Premises, including, but not limited to, ICSC, BOMA, NARIET, NAA, NMHC and
NAIOP, as applicable to the Premises.

 

i.                              At
the request of the Company, Manager shall analyze the potential disposition of
the Premises.

 

j.                              Manager
shall organize and present materials for periodic meetings held by the Company
regarding the asset class of the Premises on topics and in scope to be
determined by the Company.

 

k.                           Manager
shall serve as a liaison among the Premises, the Current Manager, joint venture
partners of Company in the Premises, if applicable, and the Company’s
consultants.

 

l.                              If
the Premises is in the process of being developed, Manager shall:

 

i.                                          Monitor
construction process, including, but not limited to, review of budget variance,
draws, costs, plan approval and progress.

 

ii.                                       Hire consultants
as needed.

 

iii.                                   Work
with legal counsel to draft and negotiate documents such as easements,
development agreements and construction documents to facilitate the development
process.

 

2.                                       Term and Termination.

 

a.                           Term.  The term of this Agreement shall begin on
[                    ]
[    ], 20[    ] and end on December 31,
20[    ] (the “Initial Term”).  Unless terminated as provided in Section 2(b) below,
the term shall thereafter automatically renew for successive one-year periods
(each, a “Renewal Term”), with the first such one-year renewal period
commencing on January 1, 20[    ], and ending on December 31,
20[    ].

 

2

 

b.                          Termination.

 

i.                                          Either
party may terminate this Agreement if sixty (60) days prior to the expiration
of the Initial Term or the current Renewal Term, as applicable, it notifies the
other party hereto in writing that it elects to terminate this Agreement, in
which case this Agreement shall be terminated on the last day of the Initial
Term or the current Renewal Term, if applicable.  Manager, between ninety (90) and sixty (60)
days prior to the expiration of the Initial Term and each Renewal Term, shall
notify the independent members of the Board of Directors, of Company’s right to
cancel this Agreement pursuant to this Section 2(b)(i).

 

ii.                                       Additionally,
at any time, the Company may terminate this Agreement, without cause or
penalty, upon a vote of a majority of the Company’s ultimate parent company’s
independent directors by providing no less than sixty (60) days written notice
to Manager.

 

iii.                                    At
the sole option of the Company, this Agreement shall be terminated immediately
upon written notice of termination from the Company to the Manager if any of
the following events occurs:

 

A.                                   the
Manager violates any provisions of this Agreement and after notice of such
violation fails to cure the default within thirty (30) days;

 

B.                                     a
court of competent jurisdiction enters a decree or order for relief in respect
of the 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 Manager or for any substantial part of its property or orders
the winding up or liquidation of the Manager’s affairs; or

 

C.                                    the
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 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.

 

D.                                    The
Manager agrees that if any of the events specified in subsections (B) and (C) of
this Section 2(b)(iii) occur, it will give written notice
thereof to the Company within seven (7) days after the occurrence of the
event.

 

3

 

3.                                       Manager’s Liability/Indemnification.

 

a.                           Company
shall indemnify the Manager and its officers, directors, employees and agents
(individually an “Indemnitee”, collectively the “Indemnitees”) to the same
extent as Company may indemnify its officers, directors, employees and agents
under its Articles of Incorporation and Bylaws so long as:

 

i.                                          the Indemnitee 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 Company’s net assets and
not from any personal assets of any stockholder.

 

b.                          Company shall not indemnify any person or
entity for losses, liabilities or expenses arising from, or out of, an
alleged violation of federal or state securities laws by any party seeking
indemnity unless one or more of the following conditions are met:

 

i.                                          there
has been a successful adjudication on the merits of each count involving
alleged securities law violations as to the particular person or entity;

 

ii.                                       the claims have been dismissed with prejudice
on the merits by a court of competent jurisdiction as to the particular
person or entity; or

 

iii.                                    a
court of competent jurisdiction approves a settlement of the claims and finds
that indemnification of the settlement and related costs should be made and the
court considering the request has been advised of the position of the
Securities and Exchange Commission and the published opinions of any state
securities regulatory authority in which securities of Company were offered and
sold with respect to the availability or propriety of indemnification for
securities law violations.

 

c.                           Company shall advance amounts to persons
entitled to indemnification hereunder for legal and other expenses and
costs incurred as a result of any legal action for which indemnification is
being sought only if all of the following conditions are satisfied:

 

i.                                          the
legal action relates to acts or omissions with respect to the performance of
duties or services by the Indemnitee for or on behalf of the Company;

 

4

 

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 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.

 

4.                                       Management Fee.  At
Manager’s discretion, Company agrees to pay Manager, either a monthly oversight
fee:

 

a.                           of
           [not to exceed 1%
] of the gross income (as defined below) of the Premises which shall be paid
monthly by the Company.  For purposes of
this Agreement, gross income shall be defined as all rents, assessments and
other income generated by the Premises; or

 

b.                          based
upon the “hourly billing rate” of the Manager, multiplied by the number of
hours spent by Manager employees in providing oversight services
hereunder.  For these purposes, the “hourly
billing rate” approximates the hourly cost to the Manager to provide services
to the Company and is based on:

 

i.                                          the amount of salaries and bonuses
paid to the employees of the Manager providing the services; and

 

ii.                                       an allocation for overhead including
employee benefits, rent, materials, fees, taxes, and other operating expenses
incurred by Manager in operating its business, except for direct expenses for
which we reimburse Manager.

 

5.                                       Expenses.  In addition to the compensation paid to the
Manager pursuant to Section 5 hereof, and subject to
the limits herein, the Company shall reimburse the Manager for all expenses
paid or incurred by the Manager in providing the services hereunder, including
all direct expenses and the costs of salaries and benefits of persons employed
by the Manager 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 Company’s Representative; provided,
however, if Manager is paid an hourly fee pursuant to Section 5(b) above,
it shall not be reimbursed for expenses related to personnel.  Manager shall prepare a statement documenting
the expenses paid or incurred by Manager for the Company on a quarterly
basis.  The Company shall reimburse the
Manager for these expenses within forty-five (45) days after the end of each
calendar quarter.

 

6.                                       Company’s Representative. 
Company designates Inland Diversified Business Manager and Advisor, Inc.
as Company’s Representative or any other person or entity designated by Company
in all dealings with Manager hereunder. Whenever the notification and reporting
to Company or the approval, consent or other action of Company is called for
hereunder, any notification and reporting if sent to or specified in writing to
Company’s Representative, and any approval, consent or action if executed by
any of the officers of 

 

5

 

Company’s Representative, shall be binding on
Company. Company’s Representative address for delivery of reports or notice
shall be:

 

	
  Name

  	
   

  	
  Address

  
	
  Inland Diversified Business Manager and 

  Advisor, Inc. 

  	
   

  	
  2901 Butterfield Road 

  Oak Brook, IL 60523 

  
	
  Attn. Ms. Roberta S. Matlin, 

  	
   

  	
  Telephone:

  	
  (630) 218-8000 

  
	
  President

  	
   

  	
  Facsimile:

  	
  (630) 218-4955

  

 

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

 

7.                                       Payment of Fees and Actions upon Termination.

 

a.                           The
Manager shall not be entitled to compensation after the date of termination of
this Agreement for further services hereunder, but shall be paid all
compensation accruing to the date of termination. Upon termination of this
Agreement, the Manager shall:

 

i.                                          deliver
to Company all property and documents of Company or Company then in the custody
of the Manager; and

 

ii.                                       cooperate
with Company and take all reasonable steps requested by Company to assist it in
making an orderly transition of the functions performed by the Manager.

 

8.                                       Survival.  All
provisions of this Agreement that require Company to have insured, or to
protect, defend, save, hold and indemnify or to reimburse 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
Manager of Company, such provisions shall apply as if this Agreement were still
in effect.

 

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

 

	
  If to Company, to:

  	
   

  	
  Inland Diversified Business Manager and Advisor, Inc.

  2901 Butterfield Road

  
	
   

  	
   

  	
  Oak Brook, IL  60523

  
	
   

  	
   

  	
  Attention:

  	
  Ms. Roberta S. Matlin, President

  
	
   

  	
   

  	
  Telephone:

  	
  (630) 218-8000

  
	
   

  	
   

  	
  Facsimile:

  	
  (630) 218-4955

  

 

6

 

	
  If to Manager, to:

  	
   

  	
  [Management Company] LLC

  
	
   

  	
   

  	
  2901 Butterfield Road

  
	
   

  	
   

  	
  Oak Brook, IL  60523

  
	
   

  	
   

  	
  Attention:

  	
  Thomas P. McGuinness

  
	
   

  	
   

  	
  Telephone:

  	
  (630) 218-8000

  
	
   

  	
   

  	
  Facsimile:

  	
  (630) 218-4955

  

 

10.                                Miscellaneous.

 

a.                           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 Company or Manager for the performance
by Company 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.  Manager and
Company shall not be construed as joint venturers or partners of each other
pursuant to this Agreement, and neither shall have the power to bind or
obligate the other except as set forth herein. In all respects, the status of
Manager to Company under this Agreement is that of an independent contractor.

 

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

 

c.                           This
Agreement shall be binding upon the successors and assigns of Manager and the
heirs, administrators, executors, successors and assignees of Company.  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.

 

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

 

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

 

7

 

f.                             All
exhibits and schedules attached to this Agreement are hereby incorporated by
reference.

 

[THE REMAINDER OF THIS PAGE INTENTIONALLY BLANK]

 

8

 

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

 

	
  MANAGER:

  	
   

  	
  COMPANY:

  
	
   

  	
   

  	
   

  
	
  [MANAGEMENT COMPANY] LLC, a Delaware

  	
   

  	
  INLAND DIVERSIFIED REAL ESTATE TRUST,

  
	
  limited liability company

  	
   

  	
  INC., a Maryland corporation

  
	
   

  	
   

  	
   

  
	
  By: INLAND DIVERSIFIED MANAGEMENT

  	
   

  	
  By:

  	
   

  
	
  HOLDCO LLC, a Delaware limited liability

  	
   

  	
  Name:

  	
   

  
	
  company, its sole member

  	
   

  	
  Its:

  	
   

  
						

 

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  

 

9

 

Exhibit A

 

Description of Premises

 

See attached.

 

10EXHIBIT 10.4

 

FORM OF ESCROW AGREEMENT

 

THIS ESCROW
AGREEMENT (this “Agreement”) is made and entered into as of the
       day of
                    ,
2008, by and among INLAND DIVERSIFIED REAL ESTATE TRUST, INC., a Maryland
corporation (the “Company”), INLAND SECURITIES CORPORATION, a Delaware
corporation (the “Dealer Manager”) and BANK OF AMERICA, N.A., a national
banking association (the “Escrow Agent”).

 

1.             The Company does
hereby open this escrow and Escrow Agent’s sole concern and duties shall be as specifically
set forth herein:  From time to time
during the course of this escrow, in connection with the Company’s offering
(the “Offering”) of up to 700,000,000 shares of common stock on a “best efforts”
basis (the “Shares”) (exclusive of Shares offered and sold pursuant to the
Company’s distribution reinvestment plan), Escrow Agent will receive from
subscribers deposits to be held in escrow in accordance with the terms hereof.
All such funds received by Escrow Agent shall, except as otherwise specified herein,
be placed into an interest-bearing account entitled “Inland Diversified Real
Estate Trust, Inc. Subscription Account” (the “Escrow Account”).

 

2.             Deposits received
from residents of Pennsylvania (the “Pennsylvania Subscribers”) (as identified
as such by the Company) shall be placed into an interest-bearing account
entitled “Inland Diversified Real Estate Trust, Inc. Pennsylvania
Subscription Account” (the “Pennsylvania Escrow Account”) until such
Pennsylvania Escrow Account has closed pursuant to Section 11 hereof.

 

3.             All deposits from
each subscriber shall be accompanied by the subscriber name, social security
number, current address and investment amount.

 

4.             Checks deposited into
either the Escrow Account or the Pennsylvania Escrow Account from the various
subscribers shall be made payable to “B. of A., Escrow Agent for Inland
Diversified                              .”

 

5.             All parties
understand and are aware that all funds received during the course of the
escrow and deposited into either the Escrow Account or the Pennsylvania Escrow
Account must clear the normal banking channels prior to the release of any
funds.

 

6.             The Company
understands that it is not entitled to any funds received into escrow in the
event of cancellation of the Offering and in such event, deposits shall be
returned to the subscribers.

 

7.             The parties agree
that this is an impound escrow between the Company, the Dealer Manager and the
Escrow Agent. The Company and the Dealer Manager agree that the subscribers who
deposit into either the Escrow Account or the Pennsylvania Escrow Account are
not a party to this escrow.

 

8.             All documents,
including any instrument necessary for the negotiation or other transfer of
escrow assets, deposited simultaneously with the execution of this Agreement
are 

 

 

approved by the Company, and
the Escrow Agent shall not be obligated to inquire as to the form, manner of
execution or validity of these documents or any document hereafter deposited
pursuant to the provisions hereof, nor shall the Escrow Agent be obligated to
inquire as to the identity, authority or rights of the persons executing the
same. The Escrow Agent shall be liable under this Agreement only for its gross
negligence or willful misconduct in the performance of its duties expressly set
forth in this Agreement. The Escrow Agent shall have a lien on all securities,
monies and documents deposited in this escrow by each subscriber to secure
Escrow Agent’s reasonable compensation and expenses and for judgments,
attorneys’ fees and other liabilities which the Escrow Agent may incur or
sustain by reason of this escrow, and the undersigned agrees to pay to Escrow
Agent, upon demand, amounts to satisfy all such liabilities, fees and expenses.
In case of conflicting demands upon it, the Escrow Agent may withhold
performance of this escrow until such time as the conflicting demands shall
have been withdrawn or the rights of the respective parties shall have been
settled by court adjudication, arbitration, joint order or otherwise.

 

9.             Until the termination
of the Offering, the Company shall notify the Escrow Agent of the Company’s
acceptance or rejection of each subscription agreement as promptly as
practicable, but in any event within ten (10) days of its receipt, and of
any subscription which is rescinded within five (5) days of such
rescission. If the Escrow Agent receives notice that a subscription is rejected
by the Company, the subscriber’s deposit will be returned by the Escrow Agent
to the subscriber, without interest or deduction, as promptly as practicable,
but in any event within ten (10) days after its receipt of notice from the
Company that the subscription has been rejected. If a subscription is
rescinded, the Escrow Agent shall return to the subscriber the subscriber’s
deposit, without interest or deduction, within seven (7) days of being
notified by the Company of such rescission. In the event the check of a
subscriber whose subscription has been rescinded has been negotiated (and if
the funds represented thereby have been disbursed to the Company), the Company
shall deposit with the Escrow Agent an amount of funds equal to the amount
necessary to be returned to the subscriber (or the Escrow Agent may deduct such
amount from any funds due to the Company under this Agreement). The Escrow
Agent shall not be liable for the failure to return a rejected or rescinded
subscription if the Company fails to notify the Escrow Agent of the rejection
of rescission of the corresponding subscription agreement.

 

10.           Once the Escrow Account
contains paid and accepted subscriptions for at least $2,000,000 (the “Minimum
Offering”), provided such date is within one (1) year of the original
effective date of the Company’s prospectus (such original effective date of the
Company’s prospectus being the “Effective Date”), and ending on the Termination
Date (the “Offering Period”), the Escrow Agent shall:

 

(a)           disburse to the Company
on a weekly basis any funds in the Escrow Account received by the Escrow Agent
for accepted subscriptions , but not those funds of a subscriber whose
subscription has been rejected or rescinded of which the Escrow Agent has been
notified by the Company, or otherwise in accordance with the Company’s written
request, and

 

(b)           subject to Section 12
hereof, invest any funds held in the escrow in such instruments as the Company
may direct.

 

2

 

Upon
termination of the Offering, which shall occur not later than twelve (12)
months after the Effective Date, provided however that, subject to requalification
in certain states, the Company may extend the Offering Period from time to
time, but in no event more than two years after the Effective Date (the “Termination
Date”), all amounts theretofore undistributed from the Escrow Account shall be
distributed to the Company, and this escrow shall close and be consummated in
its entirety. If subscriptions for at least the Minimum Offering have not been
received, accepted and paid for within one (1) year of the Effective Date,
all funds received will be promptly returned in full to subscribers, together
with their pro rata share of any interest earned thereon pursuant to
instructions made by the Company, upon which the Escrow Agent may conclusively
rely. If such refund is made, Inland Real Estate Investment Corporation, an
affiliate of the Dealer Manager, will pay any escrow fees.

 

11.

 

(a)                                  Notwithstanding
any disbursement of funds from the Escrow Account pursuant to Section 10
hereof, Escrow Agent will continue to place deposits from the Pennsylvania
Subscribers into the Pennsylvania Escrow Account, until such time as the
Company notifies the Escrow Agent in writing that total subscription proceeds
(including the amount then in the Pennsylvania Escrow Account) equal or exceed
$350,000,000, whereupon the Escrow Agent shall:

 

(i)                                   disburse
to the Company any funds in the Pennsylvania Escrow Account received by the
Escrow Agent for accepted subscriptions, but not those funds of a subscriber
whose subscription has been rejected or rescinded of which the Escrow Agent has
been notified by the Company, or otherwise in accordance with the Company’s
written request,

 

(ii)                                transfer
any funds in the Pennsylvania Escrow Account received by the Escrow Agent for
unaccepted subscriptions into the Escrow Account, and

 

(iii)                             close
the Pennsylvania Escrow Account.

 

(b)                                 If
the Company has not received total subscriptions of at least $350,000,000
within 120 days of the date the Company first receives a subscription from a
Pennsylvania Subscriber (the “Initial Escrow Period”), the Company shall notify
each Pennsylvania Subscriber by certified mail of the right of Pennsylvania
Subscribers to have their investment returned to them.  If, pursuant to such notice, a Pennsylvania
Subscriber requests the return of his or her subscription funds within ten (10) days
after receipt of the notification (the “Request Period”), the Escrow Agent
shall promptly refund, without interest or deduction, directly to each
Pennsylvania Subscriber the fund deposited in the Pennsylvania Escrow Account
on behalf of the Pennsylvania Subscriber.

 

(c)                                  The
funds of Pennsylvania Subscribers who do not request the return of their funds
within the Request Period shall remain in the Pennsylvania Escrow Account for
successive 120-day escrow periods (each a “Successive Escrow Period”), each
commencing automatically upon the termination of the prior Successive Escrow
Period, and the Company and Escrow Agent shall follow the notification and
payment procedure 

 

3

 

set forth in Section 11(b) above
with respect to the Initial Escrow Period for each Successive Escrow Period,
provided that any refunds made to a Pennsylvania Subscriber after a Successive
Escrow Period shall include a pro rata share of any interest earned thereon after
the Initial Escrow Period, until the occurrence of the earliest of (i) the
Termination Date, (ii) the receipt and acceptance by the Company of
subscriptions with total purchase proceeds that equal or exceed $350,000,000
and the disbursement of the Pennsylvania Escrow Account on the terms specified
herein, or (iii) all funds held in the Pennsylvania Escrow Account having
been returned to the Pennsylvania Subscribers in accordance with the provisions
hereof.

 

If, upon
termination of the Offering, the Company has not received and accepted total
purchase proceeds that equal or exceed $350,000,000, all funds in the
Pennsylvania Escrow Account will be promptly returned in full to subscribers,
together with their pro rata share of any interest earned thereon pursuant to
instructions made by the Company, upon which the Escrow Agent may conclusively
rely. If such refund is made, Inland Real Estate Investment Corporation will
pay any escrow fees.

 

12.           The funds deposited
herein shall be invested in federally insured bank accounts (e.g., savings accounts), short-term certificates of deposit
issued by a bank, short-term securities issued or guaranteed by the United
States government and any other investments permitted under Rule 15c2-4 of
the Securities Exchange Act of 1934, as amended, at the direction of the
Company. The interest on such investments shall, on a monthly basis while
subscribers’ deposits remain in escrow and, if all conditions herein are met,
when such deposits are disbursed to the Company, be disbursed by the Escrow
Agent to the Company in accordance with Section 10 and  Section 11
hereof.

 

13.           The Company agrees to
disburse to the Dealer Manager any funds due to it for the Offering in
accordance with the terms and conditions of the Dealer Manager Agreement dated
                    ,
2008 between the Company and the Dealer Manager, provided that the Escrow Agent
has disbursed to the Company the funds due to the Company for the related
subscriptions. The Dealer Manager shall assist the Company in connection with
the Company’s compliance with this Agreement. The Dealer Manager shall not have
any lien on or security interest in any securities, monies or documents
deposited in this escrow.

 

14.           Any notices which are
required or desired to be given hereunder to the parties hereto shall be in
writing and may be given by mailing the same to the address indicated below (or
to such other address as either of the parties may have theretofore substituted
therefor by written notification to the other party hereto), by registered or
certified United States mail, postage prepaid. For all purposes hereof, any
notice so mailed by the Escrow Agent shall be treated as though served upon the
party to whom it was mailed at the time it is deposited in the United States
mail by the Escrow Agent whether or not such party thereafter actually receives
such notice. Notices to the Escrow Agent shall be in writing and shall not be
deemed to be given until actually received by the Escrow Agent’s trust
department. Whenever under the terms hereof the time for giving a notice or
performing an act falls upon a Saturday, Sunday or bank holiday, such time
shall be extended to the Escrow Agent’s next business day.

 

4

 

15.           The Escrow Agent, when
acting as the Escrow Agent hereunder, undertakes to perform only such duties as
are expressly set forth herein and the Escrow Agent shall not be subject to,
nor obliged to recognize, any other agreement between, or direction or
instruction of, the Company even though reference thereto may be made herein;
provided, however, this Agreement may be amended at any time or times by an
instrument in writing signed by the Company, the Dealer Manager and Escrow
Agent. In the event the Escrow Agent becomes involved in or is threatened with
litigation by reason hereof, it is hereby authorized to and may deposit with
the clerk of a court of competent jurisdiction any and all funds held by it
pursuant hereto, and thereupon the Escrow Agent shall stand fully relieved and discharged
of any further duties hereunder.

 

16.           If any property subject
hereto is at any time attached, garnished or levied upon, under any court
order, or in case the payment, assignment, transfer, conveyance or delivery of
any such property shall be stayed or enjoined by any court order, or in any
case any order, judgment or decree shall be made or entered by any court
affecting such property, or any part thereof, then in any of such events, the
Escrow Agent is authorized, in its sole discretion, to rely upon and comply
with any such order, writ, judgment or decree, which it is advised by legal
counsel of its own choosing is binding upon it, and if it complies with any
such order, writ, judgment or decree, it shall not be liable to any of the
parties hereto or to any other person, firm or corporation by reason of such
compliance, even though such order, writ, judgment or decree may be
subsequently reversed, modified, annulled, set aside or vacated.

 

17.           This Agreement shall be
construed, enforced and administered in accordance with the internal laws, as
opposed to the conflicts of laws provisions, of the State of Illinois.

 

18.           The Escrow Agent shall
be entitled to reasonable fees in connection with this Escrow, which fees shall
be payable by the Company.

 

19.           The Escrow Agent may
resign at any time upon giving at least thirty (30) days’ prior written notice
to the Company; provided, however, that no such resignation shall become
effective until the appointment of a successor escrow agent which shall be
accomplished as follows: The Company shall use its best efforts to select a
successor escrow agent within thirty (30) days after receiving such notice. If
the Company fails to appoint a successor escrow agent within such time, the
Escrow Agent shall have the right to appoint a successor escrow agent. The
successor escrow agent shall execute and deliver an instrument accepting such
appointment and it shall, without further acts, be vested with all the estates,
properties, rights, powers, and duties of the predecessor escrow agent as if
originally named as escrow agent. Upon delivery of such instrument, the Escrow
Agent shall be discharged from any further duties and liability under this
Agreement. The Escrow Agent shall be paid any outstanding fees and expenses prior
to transferring assets to a successor escrow agent.

 

20.           Any notice required to
be given hereunder by any of the parties hereto shall be addressed as follows:

 

	
  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

  

 

5

 

	
  If to the
  Dealer Manager:

  	
  Inland
  Securities Corporation

  
	
   

  	
  2901
  Butterfield Road

  
	
   

  	
  Oak Brook, IL
  60523

  
	
   

  	
  Attention: 

  	
  Ms. Brenda
  G. Gujral

  
	
   

  	
  Telephone: 

  	
  (630)
  218-8000

  
	
   

  	
  Facsimile: 

  	
  (630)
  218-4955

  
	
   

  	
   

  
	
  If to
  Escrow Agent:

  	
  Bank of
  America, N.A.

  
	
   

  	
  Corporate
  Trust Department

  
	
   

  	
  135 South
  LaSalle Street

  
	
   

  	
  Chicago, IL
  60603

  
	
   

  	
  Attention: 

  	
  Mark
  LoIacono

  
	
   

  	
  Telephone: 

  	
  (312)
  904-2931

  
	
   

  	
  Facsimile: 

  	
  (312)
  904-2236

  

 

21.           The foregoing is
subject to the following conditions:

 

(a)           The obligations and
duties of the Escrow Agent are confined to those specifically enumerated in the
escrow instructions. The Escrow Agent shall not be subject to, nor be under any
obligation to ascertain or construe the terms and conditions of any other
instrument, whether or not now or hereafter deposited with or delivered to the
Escrow Agent or referred to in the escrow instructions, nor shall the Escrow
Agent be obligated to inquire as to the form, execution, sufficiency, or
validity of any such instrument nor to inquire as to the identity, authority,
or rights of the person or persons executing or delivering the same.

 

(b)           The Escrow Agent shall
not be personally liable for any act which it may do or omit to do hereunder in
good faith and in the exercise of its own best judgment. Any act done or
omitted by the Escrow Agent pursuant to the advice of its attorneys shall be
deemed conclusively to have been performed or omitted in good faith by the
Escrow Agent.

 

(c)           If the Escrow Agent
should receive or become aware of any conflicting demands or claims with
respect to this Agreement, or the rights of any of the parties hereto, or any
money, property, or instruments deposited herein or affected hereby, the Escrow
Agent shall have the right in its sole discretion, without liability for
interest or damages, to discontinue any or all further acts on its part until
such conflict is resolved to its satisfaction and/or to commence or defend any
action or proceeding for the determination of such conflict. Notwithstanding
any other provision hereof, in the event of any dispute, disagreement or legal
action relating to or arising in connection with the escrow, the Escrow Fund,
or the performance of the Escrow Agent’s duties under this Agreement, the
Escrow Agent will not be required to determine the controversy or to take 

 

6

 

any action regarding it. The Escrow Agent may
hold all documents and funds and may wait for settlement of any such
controversy by final appropriate legal proceedings, arbitration, or other means
as, in the Escrow Agent’s discretion, it may require. In such event, the Escrow
Agent will not be liable for interest or damage. Furthermore, the Escrow Agent
may, at its option, file an action of interpleader requiring the parties to
answer and litigate any claims and rights among themselves. The Escrow Agent is
authorized, at its option, to deposit with the Court in which such interpleader
action is filed all documents and funds held in escrow. The Escrow Agent is
further authorized to withhold from such deposit for its own account an amount
sufficient to compensate itself for all costs, expenses, charges, and
reasonable attorneys’ fees incurred by it due to the interpleader action. Upon
initiating such action, the Escrow Agent shall be fully released and discharged
of and from all obligations and liability imposed by the terms of this
Agreement.

 

(d)           The Company and Dealer
Manager agree, jointly and severally, to indemnify and hold the Escrow Agent,
its officers, directors and employees harmless from and against all costs,
damages, judgments, attorney’s fees (whether such attorneys shall be regularly
retained or specially employed), expenses, obligations and liabilities of every
kind and nature which the Escrow Agent may incur, sustain, or be required to
pay in connection with or arising out of this Agreement, and to pay the Escrow
Agent on demand the amount of all such costs, damages, judgments, attorney’s
fees, expenses, obligations, and liabilities. To secure said indemnification
and to satisfy its compensation hereunder, the Escrow Agent is hereby given a
first lien upon and the right to reimburse itself therefor out of, all of the
rights, titles, and interests of each of said parties in all money, property,
and instruments deposited hereunder, except for any money, property or
instruments that relate to money received that must be returned pursuant to the
provisions of the second to last sentence of Section 9.

 

[SIGNATURES
ON THE FOLLOWING PAGE]

 

7

 

IN WITNESS
WHEREOF, the parties hereto have executed this Escrow Agreement as of the day
and year first above written.

 

	
   

  	
  INLAND DIVERSIFIED REAL ESTATE TRUST, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
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  INLAND SECURITIES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
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  BANK OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
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Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}]]