Document:

EXHIBIT 10.1

 

FORM OF

BUSINESS
MANAGEMENT AGREEMENT

 

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

 

WITNESSETH:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

“Acquisition Fees”
means the total of all fees and commissions, excluding Acquisition Expenses,
paid by any Person to any other Person (including any fees or commissions paid
by or to the Company, the Business Manager or any Affiliate of either) in
connection with an investment in Real Estate Assets or purchasing, developing
or constructing a property by the Company. 
For these purposes, the fees or commissions shall include any real
estate commission, selection fee, development fee, construction fee,
nonrecurring management fee, loan fee (including points), or any fee of a
similar nature, however designated, except for development fees and
construction fees paid to any Person not Affiliated with the Sponsor or
Business Manager in connection with the development and construction of a
project, or fees in connection with temporary short-term investments acquired
for purposes of cash management.

 

“Acquisition of a Real Estate Operating Company”
means the acquisition of a Real Estate Operating Company by the Company or a
wholly-owned subsidiary of the Company: (i) by purchasing a Controlling
Interest in a Real Estate Operating Company, or by merger or other business
combination, reorganization or tender offer or (ii) by acquiring all or
substantially all of a Real Estate Operating Company’s assets in a single
purchase or series of purchases.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Average Invested Assets” means, for any period, the average
of the aggregate Book Value of the assets of the Company, including all
intangibles and goodwill, invested, directly or indirectly, in equity interests
in and loans secured by Real Estate Assets, as well as amounts invested in
consolidated and unconsolidated joint ventures or other partnerships, REITs and
other Real Estate Operating Companies, before reserves for amortization and
depreciation or bad debts or other similar non-cash reserves, computed by
taking the average of these values at the end of each 

 

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month during
the relevant quarter. For purposes of calculating the Management Fee pursuant
to Section 8(a) of the Agreement, Average Invested Assets
shall not include any investments in securities including any non-controlling
interests in REITs or other Real Estate Operating Companies, for which a
separate investment advisor fee is paid. 

 

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

 

“Book Value” means the value of the
particular asset on the books and records of the Company, before any allowance
for depreciation or amortization.

 

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

 

“Company Fixed Assets” means the Real
Property, together with the buildings, leasehold interests, improvements,
equipment, furniture, fixtures and personal property associated therewith, used
by the Company in conducting its business.

 

“Controlling Interest”
means an interest equal to or greater than fifty and one-tenth percent (50.1%)
of the capital stock or other equity of an entity.

 

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

 

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

 

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

 

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

 

“GAAP” means United
States generally accepted accounting principles as in effect from time to time,
consistently applied.

 

“Gross Offering Proceeds” means the total
proceeds from the sale of 700,000,000 Shares in the Offering before deducting
Offering Expenses. For purposes of calculating Gross Offering Proceeds, the selling
price for all Shares, including those for which volume discounts apply, shall
be deemed to be $10.00 per Share. Unless specifically included in a given
calculation, Gross Offering Proceeds does not include any proceeds from the
sale of Shares under the Company’s distribution reinvestment plan.

 

3

 

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

 

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

 

(b)                                 does
not serve as a director for more than three REITs organized by the Sponsor or
advised by the Business Manager or any of its Affiliates; and

 

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

 

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

 

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

 

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

 

“Market Value” means the aggregate market
value of all of the Shares outstanding at the date of Listing, measured by
taking the average closing price or average of bid and asked price, as the case
may be, over a period of thirty days during which the Shares are traded, with
that period commencing 180 days after Listing.

 

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

 

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itemized and detailed due diligence expenses
incurred in connection with investigating the Company or any offering of
Securities made by the Company.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Property” or “Properties”
means interests in (i) Real Property or (ii) any buildings,
structures, improvements, furnishings, fixtures and equipment, whether or not
located on the Real Property, in each case owned or to be owned by the Company
either directly or indirectly through one or more Affiliates, joint ventures,
partnerships or other legal entities.

 

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

 

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

 

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

 

“Real Estate Operating Company”
means: (i) any entity that has equity securities registered under Section 12(b) or
12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”); (ii) any entity that files periodic reports under Sections 13 or 15(d) of
the Exchange Act; or (iii) any entity that, either itself or through its
subsidiaries:

 

(a) owns and operates interests in real estate on a going concern
basis rather than as a conduit vehicle for investors to participate in the
ownership of assets for a limited period of time;

 

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

 

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

 

(d) either (1) has its own officers and employees that, on a
daily basis, actively operate the entity and its subsidiaries and businesses,
or (2) has retained the services of an affiliate or sponsor of, or advisor
to, the entity to, on a daily basis, actively operate the entity and its
subsidiaries and businesses.

 

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Notwithstanding
the above, for these purposes, any joint venture or other partnership the
Company may form with a third party, in which the Company is a member, equity
holder or partner (whether the entity is consolidated or unconsolidated on the
Company’s financial statements) will not constitute a Real Estate Operating
Company.

 

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

 

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

 

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

 

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

 

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

 

“Stockholders” means holders of shares of
Equity Stock.

 

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

 

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

 

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

 

(c)                                  interest
payments;

 

(d)                                 taxes;

 

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

 

(f)                                    any
incentive fees payable hereunder; and

 

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

 

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2.                                       Duties
of the Business Manager. The Business Manager shall consult with the
Company and furnish advice and recommendations with respect to all aspects of
the business and affairs of the Company. 
The Business Manager shall inform the Board of Directors of factors that
come to the Business Manager’s attention that may, in its opinion, influence
the policies of the Company.  Subject to
the supervision of the Board of Directors and consistent with the provisions of
the Articles of Incorporation, the Business Manager shall use its commercially
reasonable best efforts to:

 

(a)                                  identify
potential investment opportunities in Real Estate Assets located both in and
outside of the United States, and consistent with the Company’s investment
objectives and policies; including but not limited to:

 

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

 

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

 

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

 

(iv)                              entering
into leases and service contracts, on the Company’s behalf, for Real Estate
Assets and, to the extent necessary, performing all functions necessary to
maintain and administer the Company’s assets.

 

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

 

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

 

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

 

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

 

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

 

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qualifies as an “independent
contractor” as that phrase is used in connection with applicable laws, rules and
regulations affecting REITs that own Real Property;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

9

 

(q)                                 enter
into ancillary agreements with the Sponsor and its Affiliates to arrange for
the services and licenses to be provided by the Business Manager hereunder, as
summarized on Schedule 2.9(q) hereto.

 

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

 

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

 

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

 

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

 

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

 

8.                                       Compensation.
Subject to the provisions of Section 12 hereof, for services rendered
hereunder the Company shall pay to the Business Manager or its Affiliate or
designee the following:

 

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

 

10

 

fourth percent (0.25%) of Average Invested Assets for that quarter; (ii) if
the Company has declared distributions to the holders of its common stock
during the prior quarter, in an amount equal to or greater than an average six
percent (6.0%) annualized distribution rate but less than an average seven
percent (7.0%) annualized distribution rate (in each case, assuming a share of
common stock was purchased for $10.00), the Company will pay a fee equal to three-sixteenths
percent (0.1875%) of Average Invested Assets for that quarter; (iii) if the
Company has declared distributions to the holders of its common stock during
the prior quarter, in an amount equal to or greater than an average five
percent (5.0%) annualized distribution rate but less than an average six
percent (6.0%) annualized distribution rate (in each case, assuming a share of common
stock was purchased for $10.00), the Company will pay a fee equal to one-eighth
percent (0.125%) of Average Invested Assets for that quarter; or (iv) if
the Company does not satisfy the criteria in clauses (i), (ii) or (iii) of
this Section 8(a) in a particular quarter, the Company will
not, except as set forth below, pay a Management Fee for that quarter.  In the event that clause (i), (ii) or (iii) of
this Section 8(a) is satisfied, the Business Manager may
decide, in its sole discretion, to be paid an amount less than the total amount
that may be paid.  If the Business
Manager decides to accept less in any particular quarter, the excess amount
that is not paid may, in the Business Manager’s sole discretion, be waived
permanently or deferred, without interest, to be paid at a later point in
time.  The obligation to pay this fee
terminates if the Company acquires the Business Manager.

 

(b)                                 An
Acquisition Fee, equal to two and one-half percent (2.5%) of the aggregate
purchase price paid, including any borrowings or debt assumed, upon Acquisition
of a Real Estate Operating Company; provided, however, that
Acquisition Fees shall not be paid for acquisitions solely of a fee interest in
Property or for less than a Controlling Interest in REITs or other Real Estate
Operating Companies and shall not be paid in the event that the Company
acquires a Controlling Interest in an Affiliate of the Sponsor.  The Company shall pay, at the Business
Manager’s option, Acquisition Fees either in cash or by issuing Shares at a per
share value equal to the greater of (i) the per share offering price of
common stock in the Company’s most recent public offering; (ii) if
applicable, the per share price ascribed to shares of common stock used in the
Company’s most recent Acquisition of a Real Estate Operating Company; and (iii) $10.00
per share.  Any Shares issued will be
subject to restrictions on transfer agreed upon by the Business Manager and the
Company as well as any transfer restrictions included in the Articles of Incorporation.  If the issuance of Shares to pay an
Acquisition Fee would result in more than 9.8% in value of the Company’s common
stock or more than 9.8% in value or in number of shares, whichever is more
restrictive, of the Company’s common stock being held by The Inland Group, Inc.,
a Delaware corporation, and its Affiliates including the Business Manager, the
Board of Directors may waive the ownership restrictions set forth in the
Articles of Incorporation to permit the issuance of the additional Shares and
the payment of the Acquisition Fee in that instance.  Any waiver by the Board of Directors shall,
as a consequence, reduce the aggregate number of Shares of the Company’s common
stock that may be held by individuals and entities other than the Business
Manager.  If the Board of Directors does
not waive the ownership restrictions, the Company shall pay any excess fee in
cash.  The obligation to pay this fee
terminates if the Company acquires the Business Manager.

 

(c)                                  An
incentive fee equal to fifteen percent (15%) of the Net Sales Proceeds; provided
that in no event shall the Company be obligated to pay an incentive fee unless
and until all of its Stockholders have first received, on an aggregate basis, a
ten percent (10%) per annum cumulative, non-compounded return on, plus return
of, their Invested 

 

11

 

Capital.  The obligation to pay this fee terminates if
the Company acquires the Business Manager.

 

(d)                                 Upon
a Listing the Company shall pay the Business Manager a listing fee equal to
fifteen percent (15%) of the amount by which (i) the Market Value plus the
total distributions paid to Stockholders in excess of the Priority Return from
inception until the Determination Date exceeds (ii) the Invested Capital,
less any distributions of Net Sales Proceeds, plus the total distributions
required to be made to the Stockholders in order to pay them the Priority
Return from inception through the Determination Date.  In the event that, at the time of Listing,
Stockholders have not received a return of capital plus the Priority Return,
the fee may be paid at the time that the Company has paid the total
distributions required to be made to the Stockholders in order to pay them the
Priority Return, provided, however, that the fee shall be
calculated as described in this Section 8(d), as if the return
would have been satisfied at the time of Listing.  The obligation to pay this fee terminates if
the Company acquires the Business Manager.

 

9.                                       Expenses.

 

(a)                                  In
addition to the compensation paid to the Business Manager pursuant to Section 8
or Section 10 hereof, and subject to the limits herein, the Company
shall reimburse the Business Manager, the Sponsor and its Affiliates for all
expenses paid or incurred by the Business Manager, the Sponsor or its
Affiliates to provide certain services and licenses hereunder, including all
direct expenses and the costs of salaries and benefits of persons employed by
the Business Manager, the Sponsor and its Affiliates and performing services
for the Company, except for the salaries and benefits of persons who also serve
as one of the Company’s executive officers or as an executive officer of the
Business Manager.

 

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

 

(i)                                     any
Offering Expenses;

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

(ix)                                expenses
associated with listing or with issuing Shares and Securities, including
advertising expenses, taxes, legal and accounting fees, listing and
registration fees and other Organization Expenses and Offering Expenses except
for Selling Commissions or other fees and expenses paid by the Dealer Manager
to any Soliciting Dealer (as those terms are defined in the Dealer Manager
Agreement) pursuant to that certain Dealer Manager Agreement dated                     ,
2009 by and between the Company and Inland Securities Corporation;

 

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

 

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

 

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

 

(xiii)                          administrative
service expenses including personnel costs in accordance with Section 9(f);
provided, however, that no reimbursement shall be made for costs
of personnel to the extent that such personnel perform services in transactions
for which the Business Manager receives a separate fee; provided, further,
that any reimbursement of personnel costs shall be subject to the restrictions
set forth in Section 9(a);

 

(xiv)                         audit,
accounting and legal fees;

 

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

 

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

 

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

 

(i)                                     In
the case of the Sponsor, whose employees also provide services for other
entities sponsored by, or affiliated with, the Sponsor, the Company shall 

 

13

 

reimburse only a pro rata
portion of the salary and benefits of these persons based on the amount of time
spent by that person on matters for the Company compared to the time spent by
that same person on all matters including the Company’s matters.

 

(ii)                                  Except
as otherwise agreed in writing by the Company or the Business Manager, the
Company shall also reimburse Affiliates of the Sponsor for the salaries and
benefits of persons employed by these Affiliates.  The salary and benefit costs for each Affiliate
shall be determined by multiplying (A) the number of hours spent by all
employees of the Affiliate in providing services for the Company by (B) that
Affiliate’s “hourly billing rate.”  For
these purposes, the “hourly billing rate” will approximate the hourly cost to
the Affiliate to provide services to the Company based on:

 

(1)                                  the
average amount of all salaries and bonuses paid to the employees of the
Affiliate; and

 

(2)                                  an
allocation for overhead including employee benefits, rent, materials, fees,
taxes, and other operating expenses incurred by the Affiliate in operating its
business except for direct expenses reimbursed by the Company pursuant to Section 9(b) hereof.

 

(d)                                 The
Business Manager shall prepare a statement documenting the expenses paid or
incurred by the Business Manager, the Sponsor and its Affiliates for the
Company on a quarterly basis.  The
Company shall reimburse the Business Manager, the Sponsor and its Affiliates
for these expenses within forty-five (45) days after the end of each calendar
quarter.

 

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

 

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

 

10.                                 Compensation
for Additional Services, Certain Limitations.

 

(a)                                  The
Company and the Business Manager will separately negotiate and agree on the
fees for any additional services that the Company asks the Business Manager 

 

14

 

or its Affiliates to render in addition to
those set forth in Section 2 hereof.  Any additional fees or reimbursements to be
paid by the Company in connection with the additional services must be fair and
reasonable and shall be approved by a majority of the Board of Directors,
including a majority of the Independent Directors.

 

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

 

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

 

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

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

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

 

Notwithstanding
any other provision of the Agreement to the contrary, this Agreement may be
terminated with the mutual consent of the parties.  The Company may terminate this Agreement
without cause or penalty upon a vote of a majority of the Independent Directors
by providing no less than sixty (60) days’ written notice to the Business
Manager. In the event of the termination of the Agreement, the Business Manager
will cooperate with the Company and take all reasonable steps requested to
assist the Board of Directors in making an orderly transition of the functions
performed hereunder by the Business Manager.

 

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

 

16

 

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

 

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

 

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

 

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

 

(b)                                 a
court of competent jurisdiction enters a decree or order for relief in respect of
the Business Manager in any involuntary case under the applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or appoints a
receiver liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Business Manager or for any substantial part of its property
or orders the winding up or liquidation of the Business Manager’s affairs; or

 

(c)                                  the
Business Manager commences a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consents to the
entry of an order for relief in an involuntary case under any such law, or
consents to the appointment of, or taking possession by, a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
the Business Manager or for any substantial part of its property, or makes any
general assignment for the benefit of creditors, or fails generally to pay its
debts, as they become due.

 

The Business
Manager agrees that if any of the events specified in subsections (b) and (c) of
this Section 17 occur, it will give written notice thereof to the
Company within seven (7) days after the occurrence of such event.

 

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

 

17

 

(a)                                  pay
over to the Company all moneys collected and held for the account of the
Company pursuant to this Agreement, after deducting any accrued compensation
and reimbursement for expenses to which the Business Manager is entitled;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

23.                                 Liability
and Indemnification.

 

(a)                                  The
Company shall indemnify the Business Manager and its officers, directors,
employees and agents (individually an “Indemnitee”, collectively the 

 

18

 

“Indemnitees”) to the same extent as the
Company may indemnify its officers, directors, employees and agents under its
Articles of Incorporation and bylaws so long as:

 

(i)                                     the
Board of Directors has determined, in good faith, that the course of conduct
that caused the loss, liability or expense was in the best interests of the
Company;

 

(ii)                                  the
Indemnitee was acting on behalf of, or performing services for, the Company;

 

(iii)                               the
liability or loss was not the result of negligence or misconduct on the part of
the Indemnitee; and

 

(iv)                              any
amounts payable to the Indemnitee are paid only out of the Company’s net assets
and not from any personal assets of any Stockholder.

 

(b)                                 The
Company shall not indemnify any 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 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

 

19

 

(iii)                               the
Indemnitee receiving the advances undertakes to repay any monies advanced by
the Company, together with the applicable legal rate of interest thereon, in
any case(s) in which a court of competent jurisdiction finds that the party
is not entitled to be indemnified.

 

24.                                 Notices.
Any notice, report or other communication required or permitted to be given
hereunder shall be in writing unless some other method of giving such notice,
report or other communication is accepted by the party to whom it is given and
shall be given by being delivered at the following addresses of the parties
hereto:

 

	
  If to the Company:

  	
  Inland
  Diversified Real Estate Trust, Inc.

  
	
   

  	
  2901
  Butterfield Road

  
	
   

  	
  Oak Brook,
  IL  60523

  
	
   

  	
  Attention:

  	
  Ms. Roberta
  S. Matlin

  
	
   

  	
  Telephone:

  	
  (630)
  218-8000

  
	
   

  	
  Facsimile:

  	
  (630)
  218-4955

  
	
   

  	
   

  
	
  If to the Business Manager:

  	
  Inland
  Diversified Business Manager & Advisor Inc.

  
	
   

  	
  2901
  Butterfield Road

  
	
   

  	
  Oak Brook,
  IL 60523

  
	
   

  	
  Attention:

  	
  Ms. Brenda
  Gujral

  
	
   

  	
  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 24.

 

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

 

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

 

20

 

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

 

	
  COMPANY:

  	
   

  	
  BUSINESS
  MANAGER:

  
	
   

  	
   

  	
   

  
	
  INLAND
  DIVERSIFIED REAL ESTATE TRUST, INC.

  	
   

  	
  INLAND
  DIVERSIFIED BUSINESS MANAGER & ADVISOR INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  

 

 

Schedule
2.9

 

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

 

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

 

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

 

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

 

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

 

·                  Office and Facilities Management Services.  Inland Office Services, Inc.
and Inland Facilities Management, Inc. will provide office and facilities
management services, including purchasing and maintaining office supplies and
furniture, installing telephones, maintaining security, providing mailroom,
courier and switchboard services and contracting with and supervising
housekeeping and other facilities maintenance service providers.

 

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

 

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

 

·                  Software License.   ICS will grant the Business Manager a
non-exclusive and royalty-free right and license to use and copy software owned
by ICS and to use certain third party software according to the terms of the
applicable third party licenses to ICS, all in connection with the Business
Manager’s obligations under the Agreement. 
ICS will provide the Business Manager with all upgrades to the licensed
software.EXHIBIT 10.5

 

FORM OF
INDEMNIFICATION AGREEMENT

 

This Indemnification
Agreement (this “Agreement”), dated as of [                    ]
[    ], 2009, is made by and between Inland
Diversified Real Estate Trust, Inc., a Maryland corporation (the “Company”
or the “Indemnitor”), as indemnitor, and the director, officer, employee or
agent of the Company executing this Agreement as of or subsequent to the date
hereof whether by separate instrument, counterpart or otherwise, as indemnitee
(the “Indemnified Party”).  Capitalized
terms used herein but not otherwise defined herein shall have the meanings
ascribed to them in the Company’s Articles of Incorporation (as amended or
restated from time to time, the “Articles”).

 

RECITALS

 

A.                                   The Company was
formed on June 30, 2008, and intends to operate as a real estate
investment trust (a “REIT”) for federal and state income tax purposes.

 

B.                                     The Articles
and the Company’s Bylaws (as amended or restated from time to time, the “Bylaws”)
authorize the Company to indemnify and advance expenses to the Indemnified
Party, subject to certain limitations and conditions.

 

C.                                     The Indemnified
Party has requested that the Company enter into a contract for indemnity and
advancement of expenses pursuant to the applicable sections of the Articles and
Bylaws, and the Company is willing to enter into such a contract.

 

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

 

1.                                       Company
Indemnification of the Indemnified Parties.

 

(a)                                  Subject to
paragraphs (b), (c) and (d) of this Section 1, the
Company shall indemnify and, without requiring a preliminary determination of
the ultimate entitlement to indemnification, pay, advance or reimburse
reasonable expenses to the Indemnified Party from and against any liability or
loss to which the Indemnified Party may become subject or which the Indemnified
Party may incur by reason of his or her services as a director, officer,
employee or agent of the Company.

 

(b)                                 The Company
shall not indemnify the Indemnified Party unless:

 

(i)                                     the Directors have
determined, in good faith, that the course of conduct which caused the liability
or loss was in the best interest of the Company;

 

(ii)                                  the Indemnified Party was
acting on behalf of or performing services on the part of the Company;

 

 

(iii)                               the liability or loss was
not the result of negligence or misconduct on the part of the Indemnified Party
except that in the event the Indemnified Party is or was an Independent
Director, the liability or loss shall not have been the result of gross
negligence or willful misconduct;

 

(iv)                              the indemnification is
recoverable only out of the Net Assets of the Company and not from the
Stockholders; and

 

(v)                                 in respect to an
indemnification or reimbursement of legal fees, the requisite Board of
Directors, special legal counsel or stockholders determination has been made
that indemnification or reimbursement is proper.

 

(c)                                  Notwithstanding
anything to the contrary in paragraph (b) above, the Company shall not
indemnify the Indemnified Party for liabilities or losses arising from or out
of an alleged violation of federal or state securities laws by the
Indemnified Party unless one or more of the following conditions are met:

 

(i)                                     there has been a successful
adjudication on the merits of each count involving alleged securities law
violations as to the Indemnified Party;

 

(ii)                                  the claims have been dismissed
with prejudice on the merits by a court of competent jurisdiction as to the
Indemnified Party; or

 

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

 

(d)                                 The Company
shall advance amounts to the Indemnified Party for legal and other expenses and
costs incurred as a result of any legal action for which indemnification is
being sought, and only if all of the following conditions are satisfied:

 

(i)                                     the legal action relates to
acts or omissions with respect to the performance of duties or services by the
Indemnified Party for or on behalf of the Company;

 

(ii)                                  the legal action is
initiated by a third party who is not a Stockholder or the legal action is
initiated by a Stockholder acting in his or her capacity as such and a court of
competent jurisdiction specifically approves the advancement; and

 

(iii)                               the Indemnified Party
receiving the advances undertakes in writing to repay the advanced funds to the
Company, together with the applicable legal rate of interest thereon, in the
event that the Indemnified Party is found not to be entitled to
indemnification.

 

2

 

(e)                                  The Company shall have the
power to purchase and maintain insurance or provide similar protection on
behalf of the Indemnified Party against any liability or loss asserted that was
incurred in any capacity with the Company or arising out of this status; provided,
however, that the Company shall not incur the costs of any liability
insurance that insures any Person against liability or loss for which he, she
or it could not be indemnified under the Articles.

 

(f)                                    Nothing contained in this
Agreement shall constitute a waiver by the Indemnified Party of any right that
the Indemnified Party may have against any Person under federal or state
securities laws.

 

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

 

	
  Indemnitor:

  	
   

  	
  Inland Diversified Real
  Estate Trust, Inc.

  
	
   

  	
   

  	
  2901 Butterfield Road

  
	
   

  	
   

  	
  Oak Brook, IL 60523

  
	
   

  	
   

  	
  Attn: Ms. Roberta S.
  Matlin,

  Vice President

  
	
   

  	
   

  	
  Telephone:

  	
   

  	
  (630) 218-8000

  
	
   

  	
   

  	
  Facsimile:

  	
   

  	
  (630) 218-4955

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Indemnified
  Party:

  	
   

  	
  To the address set forth
  by the Indemnified

  Party on the signature page hereto

  

 

3.                                       Counterparts.  This Agreement may be executed in one or more
counterparts, all or which taken together shall constitute one and the same
agreement, and shall become effective when the counterparts have been signed by
each party hereto and delivered to the other parties hereto.

 

4.                                       Governing Law. 
This Agreement shall be construed, performed and enforced in accordance
with, and governed by, the internal laws of the State of Maryland, without
giving effect to the principles of conflicts of laws thereof.

 

5.                                       Amendments. 
This Agreement may be amended or modified, and any of the terms, covenants,
representations, warranties or conditions hereof may be waived, only by a
written instrument executed by the parties hereto, or in the case of a waiver,
by the party waiving compliance.

 

3

 

6.                                       Headings.  The
descriptive headings in this Agreement are for reference purposes only and
shall not affect the meaning or interpretation of this Agreement.

 

7.                                       Severability. 
In the event that any part of this Agreement is declared by any court or
other judicial or administrative body to be null, void or unenforceable, said
provision shall survive to the extent it is not so declared, and all of the
other provisions of this Agreement shall remain in full force and effect.

 

8.                                       Successor and Assigns. 
All references herein to the Company hereunder shall be deemed to
include all successors and assigns of the Company.  The Indemnified Party may not assign its
benefits hereunder to any third party beneficiaries or successors or assigns
without the prior written consent of the Company.

 

[SIGNATURES ON FOLLOWING PAGE]

 

4

 

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

 

	
   

  	
  INDEMNITOR:

  
	
   

  	
   

  
	
   

  	
  INLAND DIVERSIFIED REAL
  ESTATE TRUST, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INDEMNIFIED PARTY:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}]]