Exhibit
10.7
EXECUTION
COPY
INVESTMENT ADVISORY AGREEMENT FOR
DISCRETIONARY ACCOUNTS
This INVESTMENT ADVISORY AGREEMENT (the
“Agreement”) is made and entered into as of this 24th
day of August, 2009 by and between Inland Diversified Real Estate
Trust, Inc. (“Client”) and Inland Investment Advisors,
Inc., an Illinois corporation (“Adviser”), an
investment adviser registered under the Investment Advisers Act of
1940, as amended (the “Advisers Act”), for the purpose
of setting forth the terms and conditions pursuant to which Adviser
will manage Client’s assets designed for management
hereunder.
NOW, THEREFORE, in consideration of the
promises and the mutual covenants contained herein, the parties
hereto agree as follows:
1.
APPOINTMENT AS INVESTMENT
ADVISER.
Client hereby appoints and retains
Adviser as investment adviser and attorney-in-fact on the terms and
conditions set forth in this Agreement for those assets which
Client may from time to time place with Adviser, and any
appreciation, income or proceeds thereon (the
“Account”). Adviser accepts the appointment as
investment adviser and agrees to manage and direct the investments
of the Account, subject to any Investment Guidelines (defined in
Section 9 below) communicated to Adviser in advance and in writing.
Adviser assumes responsibility for the investment management
of, and all trading decisions for, the Account as of the date
assets are placed in the Account.
2.
AUTHORITY OF ADVISER.
Adviser has full discretionary authority
with respect to the investment and reinvestment of the assets of
the Account, subject to the Investment Guidelines. Adviser,
when it deems appropriate, without prior consultation with or
notification of Client, may, (a) purchase, sell, exchange, convert
and otherwise trade in securities, including but not limited to
money market instruments, mutual funds, stocks, options and
warrants, on margin or otherwise, (collectively,
“Investments”), for such prices, at such times and on
such terms as Adviser, in its sole discretion, deems advisable; (b)
place orders for the execution of transactions with or through
brokers, dealers or issuers Adviser selects in its sole discretion,
including broker-dealer with whom Adviser is related; (c) render,
furnish and provide advice, analyses and other information
concerning the retention, monitoring, performance or termination of
other investment advisers or asset managers; (d) negotiate, on
Client’s behalf, the terms and conditions, and execute and
deliver all agreements and ancillary documents incidental thereto,
necessary to open accounts in the name, or for the benefit, of
Client with such brokers, dealers, advisers, managers, issuers or
custodians as Adviser may select with respect to the Account; and
(e) act on Client’s behalf in all matters necessary or
incidental to servicing the Account, including all transactions for
the Account. Client will furnish Adviser with all additional
powers of attorney and other documentation, if any, necessary to
appoint Adviser as agent and attorney-in-fact with respect to the
Account, but such powers shall not be construed to authorize
Adviser to take any action not authorized by this
Agreement.
The foregoing authority shall remain in
full force and effect until; (a) revoked by Client pursuant to
written notice to Adviser, or (b) the termination of this Agreement
pursuant to the
terms of Section 14 below.
Revocation shall not affect transactions entered into prior
to such revocation.
3.
CUSTODIANSHIP.
The assets of the Account will be held by
the clearinghouse, broker-dealer, bank, trust company or other
entity designed and appointed by Adviser, and acceptable to Client,
as custodian of the Account (“Custodian”). All
Investments held in the Account may be registered in the name of
Client or its nominee or held in street name. Custodian is
responsible for the physical custody of the assets of the Account;
for the collection of any interest, dividends or other income
attributable to the assets of the Account; and for the exercise of
rights and tenders on assets of the Account. Adviser is not
responsible for any loss incurred by reason of any act or omission
of Custodian; provided, however, that Adviser will make reasonable
efforts to require that Custodian perform its obligations with
respect to the Account.
4.
BROKERAGE/RESEARCH.
A.
Selection of Broker-dealer.
Adviser may allocate the execution of
transactions for the Account to any broker-dealer at prices and
commission rates as Adviser, in its good faith judgment, believes
are in the best interest of the Account. Client understands
that other brokerage entities may be willing to execute
transactions at prices and commission rates that are lower than or
different from those charged by the entity selected by Adviser.
Client further understands and acknowledges that Adviser has
a relationship with Inland Securities Corporation, a broker-dealer
registered with the Securities and Exchange Commission, and that
certain transactions on behalf of the Account may be executed
through Inland Securities Corporation, and as a result, Adviser as
a part of the Inland Group of companies, may benefit from the
brokerage commissions from these transactions. Although
Adviser intends to treat Client fairly and act in the best
interests of Client and the Account in accordance with
Adviser’s fiduciary duty, Client understands that Adviser has
an incentive to execute transactions through Inland Securities
Corporation to generate brokerage commissions.
B.
Research Services.
In determining what is in the
Account’s best interest, Adviser will consider the available
prices and rates of brokerage commissions, and other relevant
factors including, without limitation, execution capabilities, the
value of ongoing relationships Adviser may have with various
broker-dealer and research and other services, as defined in
Section 28(e)(3) of the Securities Exchange Act of 1934. In
addition, Adviser may receive equipment, subscriptions and
reimbursement for professional memberships from broker-dealer, and
may purchase research and other services directly from vendors,
obtaining reimbursement from broker-dealer. Adviser need not
demonstrate that the research and other services are of a direct
benefit to the Account. The
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commissions paid to the broker-dealer may
exceed the amount of commissions another broker-dealer would charge
for the same transaction. Such research and other services,
moreover, may be available to Adviser on a cash basis.
Adviser will be required to determine, in good faith, that
the amount of commissions paid is reasonable in relation to the
value of the brokerage, research and other services provided by the
broker-dealer, viewed in terms of either the particular transaction
or Adviser’s overall responsibilities to all of its clients.
The research and other services provided may relate to a
specific transaction placed with the broker-dealer, but for the
most part will consist of a wide variety of information useful to
the Account, Adviser and Adviser’s other clients.
Adviser’s ability to obtain research and other services
is an integral factor in establishing the fees charged by Adviser
under this Agreement.
C.
Execution of Transactions by
Broker-Dealer.
In effecting transactions at the
direction of Adviser, broker-dealer selected by Adviser may effect
similar transactions in the same Investment Account and for the
accounts of other clients of Adviser. Broker-dealer may bunch
transaction orders and will allocate the Investments so purchased
or sold in a bunched order among the participating accounts
(including the Account) as Adviser determines to be reasonable.
Adviser may be charged a lesser per unit commission on
bunched orders than would otherwise be charged for a non-bunched
order, with the savings allocated to Client and Adviser’s
other clients whose orders are bunched. In the case of
bunched orders, the brokerage commission paid by Client will be
equal to a pro rata portion of the entire commission charged,
determined by multiplying the entire commission by a fraction, the
numerator of which is the number of shares allocated to the Account
and the denominator of which is the total number of shares
purchased or sold in the bunched transaction.
5.
SERVICES TO OTHERS.
Client understands that Adviser performs
investment advisory services for various clients. Adviser
will allocate investment opportunities over a period of time on a
fair and equitable basis relative to all clients. These
allocations will be made on a basis determined by Adviser to be
reasonable, including a determination that some clients may not
purchase or sell the same Investments at the same time as others.
Client acknowledges that Adviser and its principals,
employees and affiliates may purchase or sell Inve
