Exhibit 10.1
 
EXECUTION COPY

 

 
 
AMENDED AND RESTATED
 
LIMITED PARTNERSHIP AGREEMENT
 
OF
 
NET LEASE STRATEGIC ASSETS FUND L.P.
 
Dated as of November 5, 2007
 

 
 
 
 
 

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TABLE OF CONTENTS      
          

    Page             
ARTICLE I
DEFINITIONS
1

 
Section 1.1
Definitions
1

ARTICLE II
FORMATION, DURATION AND PURPOSES; PURCHASE OF INITIAL PROPERTIES
16

 
Section 2.1
Formation
16
 
Section 2.2
Name; Registered Agent and Registered Office
16
 
Section 2.3
Principal Office
16
 
Section 2.4
Purposes and Business
16
 
Section 2.5
Term
17
 
Section 2.6
Other Qualifications
17
 
Section 2.7
Limitation on the Rights of Partners
17
 
Section 2.8
Purchase of Qualified Sale Assets
17
 
Section 2.9
Remuneration To Partners
17

ARTICLE III
MANAGEMENT RIGHTS, DUTIES, AND POWERS  OF THE GENERAL PARTNER; TRANSACTIONS
INVOLVING PARTNERS
18

 
Section 3.1
Management
18
 
Section 3.2
Actions of the General Partner
19
 
Section 3.3
Authority of the General Partner
20
 
Section 3.4
Major Decisions
21
 
Section 3.5
Preliminary and Annual Plans
24
 
Section 3.6
Qualified Asset Acquisitions
26
 
Section 3.7
Sale of Qualified Assets
29
 
Section 3.8
Partnership Indebtedness
29
 
Section 3.9
Business Opportunity
31
 
Section 3.10
Payments to the Asset Manager of the General Partner
33
 
Section 3.11
Exculpation
34
 
Section 3.12
Indemnification
34

ARTICLE IV
BOOKS AND RECORDS; REPORTS TO PARTNERS
35

 
Section 4.1
Books
35
 
Section 4.2
Monthly and Quarterly Reports
36

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TABLE OF CONTENTS
(continued)
          
 

      Page                   
Section 4.3
Annual Reports
36
 
Section 4.4
Accountants; Tax Returns
37
 
Section 4.5
Accounting and Fiscal Year
37
 
Section 4.6
Partnership Funds
37
 
Section 4.7
Insurance
37

ARTICLE V
CONTRIBUTIONS
38

 
Section 5.1
Capital Contributions
38
 
Section 5.2
Preferred Equity Capital Contribution
40
 
Section 5.3
Return of Capital Contribution
40
 
Section 5.4
Liability of the Limited Partners
40
 
Section 5.5
No Third Party Beneficiaries
41

ARTICLE VI
MAINTENANCE OF CAPITAL ACCOUNTS; ALLOCATION OF PROFITS AND LOSSES FOR BOOK AND
TAX PURPOSES
41

 
Section 6.1
Capital Accounts
41
 
Section 6.2
Profits and Losses
42
 
Section 6.3
Regulatory Allocations
43
 
Section 6.4
Allocation of Tax Items for Tax Purposes
44
 
Section 6.5
Tax Matters Partner
45
 
Section 6.6
Adjustments
46

ARTICLE VII
DISTRIBUTIONS
46

 
Section 7.1
Cash Available for Distributions
46

ARTICLE VIII
TRANSFER; REMOVAL OF GENERAL PARTNER
48

 
Section 8.1
Prohibition on Transfers and Withdrawals by Partners
48
 
Section 8.2
Removal of LMLP GP as General Partner
49

ARTICLE IX
TERMINATION
49

 
Section 9.1
Dissolution
49
 
Section 9.2
Termination
50
 
Section 9.3
Certificate of Cancellation
51
 
Section 9.4
Acts in Furtherance of Liquidation
51

ARTICLE X
REPRESENTATIONS OF THE PARTNERS
51

 
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TABLE OF CONTENTS
(continued)
 

      Page                   
Section 10.1
Representations of Inland
51
 
Section 10.2
Representations of the LMLP Partners
53

ARTICLE XI
SPECIAL PARTNER RIGHTS AND OBLIGATIONS
54

 
Section 11.1
Right of First Offer
54
 
Section 11.2
Buy/Sell
55
 
Section 11.3
Provisions Applicable to Right of First Offer and Buy/Sell
57

ARTICLE XII
GENERAL PROVISIONS
58

 
Section 12.1
Notices
58
 
Section 12.2
Governing Laws
60
 
Section 12.3
Entire Agreement
60
 
Section 12.4
Waiver
60
 
Section 12.5
Validity
60
 
Section 12.6
Terminology; Captions
60
 
Section 12.7
Remedies Not Exclusive
60
 
Section 12.8
Action by the Partners
61
 
Section 12.9
Further Assurances
61
 
Section 12.10
Liability of the Limited Partners
61
 
Section 12.11
Binding Effect
61
 
Section 12.12
Amendments
61
 
Section 12.13
Counterparts
61
 
Section 12.14
Waiver of Partition
61
 
Section 12.15
No Third Party Beneficiaries
61
 
Section 12.16
Expenses
62
 
Section 12.17
Jurisdiction; Venue
62
 
Section 12.18
Jury Waiver
62
 
Section 12.19
REIT Provisions
62

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TABLE OF CONTENTS
(continued)
 

 
 Page
       
SCHEDULE 1
CAPITAL COMMITMENT OF PARTNERS/INITIAL CAPITAL CONTRIBUTIONS/PERCENTAGE
INTERESTS/PREFERRED EQUITY CAPITAL CONTRIBUTION/QUALIFIED CONTRIBUTED ASSETS
SCHEDULE 2
ACQUISITION PARAMETERS
SCHEDULE 2.8
QUALIFIED SALE ASSETS
SCHEDULE 3.5
FORM OF ANNUAL PLAN
SCHEDULE 3.8
CROSS-DEFAULT PROVISIONS
SCHEDULE 3.9
LMLP EXISTING JOINT VENTURE EXCLUSIVITY TERMS
SCHEDULE 4.7
INSURANCE REQUIREMENTS
   
EXHIBIT A
FORM OF ANNUAL BUDGET
EXHIBIT B
FORM OF CONTRIBUTION AGREEMENT
EXHIBIT C
FORM OF MANAGEMENT AGREEMENT
EXHIBIT D
FORM OF PURCHASE AGREEMENT
EXHIBIT E
FORM OF SP SUBSIDIARY PARTNERSHIP AGREEMENT
EXHIBIT F
FORM OF SP SUBSIDIARY LIMITED LIABILITY COMPANY AGREEMENT

-iv-

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AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
NET LEASE STRATEGIC ASSETS FUND L.P.
 
THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (as it may be amended,
modified, supplemented or restated from time to time, this “Agreement”) of NET
LEASE STRATEGIC ASSETS FUND L.P. (the “Partnership”), made and entered into as
of November 5, 2007 by and among The Lexington Master Limited Partnership, a
Delaware limited partnership (“LMLP”), as a limited partner of the Partnership,
LMLP GP LLC, a Delaware limited liability company (“LMLP GP”), as a general
partner of the Partnership, and Inland American (Net Lease) Sub, LLC, a Delaware
limited liability company (“Inland”), as a limited partner of the Partnership,
amends and restates in its entirety the Limited Partnership Agreement, made and
entered into as of August 10, 2007 (the “Original Agreement”), by and among
LMLP, LMLP GP and Inland.
 
LMLP and Inland are sometimes individually referred to herein as a “Limited
Partner” and collectively referred to herein as the “Limited Partners”.  The
Limited Partners and the General Partner are sometimes individually referred to
herein as a “Partner” and collectively referred to herein as the
“Partners”.  LMLP and LMLP GP are sometimes individually referred to herein as a
“LMLP Partner” and collectively referred to herein as the “LMLP Partners”.
 
In consideration of the covenants and agreements set forth herein, the Partners
hereby amend and restate the Original Agreement in its entirety and agree as
follows:
 
ARTICLE I
DEFINITIONS
 
Section 1.1      Definitions.  For the purposes of this Agreement, initially
capitalized terms used herein shall have the following meanings:
 
“Acquisition Activities” is defined in Section 3.6(f) hereof.
 
“Acquisition Costs” is defined in Section 3.6(f) hereof.
 
“Acquisition Fee” is defined in Section 3.6(g) hereof.
 
“Acquisition Memorandum” shall mean a memorandum with respect to any Proposed
Qualified Asset as provided in Section 3.6(b) hereof.
 
“Acquisition Parameters” shall mean the guidelines and requirements for any
Proposed Qualified Asset that are set forth on Schedule 2 hereto.
 
“Acquisition Period” shall mean the period commencing on August 10, 2007 and
ending the earliest of (a) the second anniversary of August 10, 2007 and (b) a
Removal Event;
 

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provided that, if the Acquisition Period has not ended because of a Removal
Event, the Acquisition Period may, pursuant to Section 3.4 hereof, be extended
for a period of six months.
 
“Act” is defined in Section 2.1 hereof.
 
“Additional Capital Contribution” is defined in Section 5.1(b) hereof.
 
“Adjusted Capital Account Deficit” shall mean the deficit balance, if any, in a
Partner’s Capital Account at the end of any fiscal year, with the following
adjustments:  (a) credit to such Capital Account any amount that such Partner is
obligated or deemed obligated to restore under Regulations
Section 1.704-1(b)(2)(ii)(c), as well as any additions thereto pursuant to the
next to last sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5),
after taking into account thereunder any changes during such year in Partnership
Minimum Gain and in the minimum gain attributable to any Partner Nonrecourse
Debt; and (b) debit to such Capital Account the items described in Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6).  The foregoing definition of
Adjusted Capital Account Deficit is intended to comply with the provisions of
Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted in a manner
consistent with such intent.
 
“Affiliate” when used with respect to any particular Person, shall mean (a) any
Person or group of Persons acting in concert that directly or indirectly through
one or more intermediaries controls or is controlled by or is under common
control with such particular Person, (b) any Person that is an officer, partner,
manager, member or trustee of, or serves in a similar capacity with respect to,
such particular Person or of which such particular Person is an officer,
partner, manager, member or trustee or with respect to which such particular
Person serves in a similar capacity, (c) any Person that, directly or
indirectly, is the beneficial owner of 10% or more of any class of voting
securities of, or otherwise has an equivalent beneficial interest in, such
particular Person or of which such particular Person is directly or indirectly
the owner of 10% or more of any class of voting securities or in which such
particular Person has an equivalent beneficial interest or (d) any relative or
spouse of such particular Person.  Notwithstanding the foregoing, (a) neither
LMLP nor LMLP GP shall be deemed to be an Affiliate of Inland and (b) Inland
shall not be deemed to be an Affiliate of the LMLP Partners.  The definition of
“Affiliate” as used in this Agreement shall not be affected by the Regulations
under Code Section 752 describing certain “related” parties.
 
“Agreement” is defined in the Preamble hereto.  This Agreement shall be the
“partnership agreement” for the Partnership within the meaning of
Section 17-101(12) of the Act.
 
“Annual Budget” shall mean the annual budget for the Partnership and each
Qualified Asset for any fiscal year, including without limitation a reasonable
description of the amount, source and character of each item of gross income,
expense and services to be rendered in the form attached hereto as Exhibit A,
approved by the Executive Committee as provided in Section 3.5 hereof.
 
“Annual Plan” is defined in Section 3.5(a) hereof.
 
“Approved Qualified Asset” is defined in Section 3.6(d) hereof.

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“Asset Manager” shall mean (i) so long as LMLP GP is the General Partner,
Lexington Realty Advisors, Inc. or another Affiliate of LMLP, or (ii) so long as
LMLP GP is no longer the General Partner, such other entity, including an
Affiliate of Inland, that may be appointed by the Executive Committee, in each
case to provide asset management services to the Partnership on market terms if
a third party manager is hired or pursuant to the terms of the Management
Agreement if an Inland Affiliate.
 
“Bankruptcy” of the Partnership or a Partner shall be deemed to have occurred
upon the happening of any of the following:  (a) the filing of an application by
the Partnership or such Partner for, or a consent to, the appointment of a
trustee, receiver or liquidator of its assets; (b) the filing by the Partnership
or such Partner of a voluntary petition or answer in bankruptcy or the filing of
a pleading in any court of record admitting in writing its inability to pay its
debts as such debts come due or seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
statute, law or regulation; (c) the making by the Partnership or such Partner of
a general assignment for the benefit of creditors; (d) the filing by the
Partnership or such Partner of an answer admitting the material allegations of,
or its consenting to or defaulting in answering, a bankruptcy or insolvency
petition filed against it in any bankruptcy or similar proceeding; (e) the entry
by any court of competent jurisdiction of an order for relief in any bankruptcy
or insolvency proceeding involving the Partnership or such Partner or of an
order, judgment or decree adjudicating the Partnership or such Partner a
bankrupt or insolvent or appointing a trustee, receiver or liquidator of its
assets; or (f) the filing by a third party against the Partnership of such
Partner of an involuntary petition under any bankruptcy or insolvency law, which
petition is not dismissed within sixty (60) days from the date of such filing.
 
“Book Basis” shall mean, with respect to any asset of the Partnership, the
adjusted basis of such asset for federal income tax purposes; provided, however,
that (a) if any asset is contributed to the Partnership, the initial Book Basis
of such asset shall equal its fair market value on the date of contribution (as
agreed to by the Partners), and (b) if the Capital Accounts of the Partners are
adjusted pursuant to Treasury Regulations Section 1.704-1(b) to reflect the fair
market value of any asset of the Partnership, the Book Basis of such asset shall
be adjusted to equal its respective fair market value as of the time of such
adjustment (as agreed to by the Partners), in accordance with such Treasury
Regulations.  The Book Basis of all assets of the Partnership shall be adjusted
thereafter by depreciation or amortization as provided in Treasury Regulations
Section 1.704-1(b)(2)(iv)(g) and any other adjustment to the basis of such
assets other than depreciation or amortization.
 
“Book Depreciation” shall mean all deductions attributable to the depreciation,
amortization or other cost recovery, including additions, of any Qualified Asset
or other asset (whether tangible or intangible) acquired by the Partnership that
has a useful life in excess of one year, as such deductions are computed for
federal income tax purposes; provided, that with respect to any Partnership
asset the tax basis of which differs from the Book Value of such asset, Book
Depreciation for any period shall equal (a) the sum total of all deductions
taken during such period attributable to depreciation, amortization or other
cost recovery deduction for federal income tax purposes with respect to such
asset, multiplied by (b) the Book Value of such asset divided by the tax basis
thereof; providedfurther, that if the depreciation, amortization or other cost
recovery deduction for federal income tax purposes with respect to any
Partnership asset for

3

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any period is zero ($0.00), Book Depreciation shall be determined by the Tax
Matters Partner using any reasonable method selected by the Tax Matters Partner
that is based on the Book Value of such asset.
 
“Book Value” shall mean, with respect to any Partnership asset at any time, the
adjusted basis of such asset for federal income tax purposes, except that
(a) the initial Book Value of any asset contributed by a Partner to the
Partnership shall be the Fair Market Value of such asset, and (b) the Book Value
of all Partnership assets shall be adjusted to equal their Fair Market Values,
as determined in good faith by the General Partner, upon the occurrence of
certain events as described below.  In either case, the Book Value of
Partnership assets shall thereafter be adjusted for Book Depreciation taken into
account with respect to such asset.  Provided the Tax Matters Partner makes an
election to do so as provided under Section 1.704-1(b)(2)(iv)(f) of the
Regulations, the Book Value of Partnership assets shall be adjusted to equal
their Fair Market Value, as determined in good faith by the General Partner, as
of the following times to which the election relates:  (a) the admission of a
new Partner to the Partnership or acquisition by an existing Partner of an
additional interest in the Partnership, provided that the consideration
contributed to the Partnership upon such admission or acquisition is more than a
de minimis amount of money or assets; (b) the distribution by the Partnership to
a Partner of more than a de minimis amount of money or other assets; and (c) the
termination of the Partnership for federal income tax purposes pursuant to Code
Section 708(b)(1)(B).
 
The Book Value of all Partnership assets shall also be increased (or decreased)
to the extent that adjustments to the adjusted basis of such assets pursuant to
Code Section 734(b) or Code Section 743(b) have been taken into account for
purposes of determining Capital Accounts in accordance with Regulation
Section 1.704-1(b)(2)(iv)(m), unless such adjustments have already been
accounted for pursuant to the preceding paragraph.  If the Book Value of an
asset has been determined or adjusted pursuant hereto, such value shall
thereafter be the basis for, and be adjusted by, the depreciation taken into
account with respect to, such asset for purposes of computing Profits and
Losses.  Moreover, notwithstanding the foregoing, the Book Value of any
Partnership asset distributed to any Partner shall be the gross Fair Market
Value of such asset on the date of distribution.
 
“Business Day” shall mean any day other than a Saturday, Sunday or any day on
which national banks in New York, New York are not open for business.
 
“Buy/Sell Asset” is defined in Section 11.2(a) hereof.
 
“Buy/Sell Notice” is defined in Section 11.2(a) hereof.
 
“Buy/Sell Offer Price” is defined in Section 11.2(a) hereof.
 
“Buy/Sell Offering Partner” is defined in Section 11.2(a) hereof.
 
“Buy/Sell Responding Interest Price” is defined in Section 11.2(c) hereof.
 
“Buy/Sell Responding Partner” is defined in Section 11.2(a) hereof.
 
“Buy/Sell Response Notice” is defined in Section 11.2(a) hereof.
 
4

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“Cap Ex/Lease Assumed Asset” shall mean the following Qualified Assumed Assets:
(i) the property located at 940 Industrial Road, Marshall, Michigan; (ii) the
property located at 10419 North 30th Street, Tampa, Florida; and (iii) the
property located at 601 & 701 Experian Parkway, Allen, Texas.
 
“Cap Ex/Lease Assumed Asset Amount” is defined in Section 5.1(a) hereof.
 
“Capital Account” shall mean, with respect to any Partner, the separate “book”
account which the Partnership shall establish and maintain for such Partner as
provided in Section 6.1 hereof and in accordance with Section 704(b) of the Code
and Regulations Section 1.704-1(b)(2)(iv) and such other provisions of
Section 1.704-1(b) of the Regulations as must be complied with in order for the
Capital Accounts to be determined in accordance with the provisions of said
Regulations.  In furtherance of the foregoing, the Capital Accounts shall be
maintained in compliance with Section 1.704-1(b)(2)(iv) of the Regulations, and
the provisions hereof shall be interpreted and applied in a manner consistent
therewith.
 
“Capital Call” is defined in Section 5.1(b) hereof.
 
“Capital Commitment” shall mean, with respect to each Partner, the amount set
forth opposite its name on Schedule 1 hereto, as such Schedule may be amended or
modified from time to time upon the Partners’ unanimous consent.  Any payment of
the Acquisition Fees by Inland shall decrease Inland’s Capital Commitment, and,
in such event, LMLP’s Capital Commitment shall be decreased by 17.65% of the
amount Inland’s Capital Commitment is decreased. 
 
“Capital Contribution” shall mean, (a) at formation of the Partnership, the
Initial Capital Contributions set forth on Schedule 1 hereto, and (b) at any
particular time thereafter and with respect to any Partner, an amount equal to
the sum of (a) the total amount of cash and (b) the Fair Market Value of any
asset (determined as of the date such asset is contributed by such Partner and
net of any liabilities secured by such asset that the Partnership is considered
to assume or take subject to under Section 752 of the Code, that has in each
case been contributed to the Partnership by such Partner pursuant to Section 5.1
hereof.
 
“Change of Control” shall be deemed to occur upon (a) any Person (and its
Affiliates) becoming the beneficial owner, directly or indirectly, of more than
fifty percent (50%) of the outstanding partnership interests in LMLP (other than
an LMLP Affiliated Party) and (b) the resignation or removal (including death or
permanent disability) of at least two of the following individuals from the
management of LMLP: Michael L. Ashner, E. Robert Roskind and T. Wilson Eglin.
 
“Closing” is defined in Section 11.3(c) hereof.
 
“Closing Date” is defined in Section 11.3(c) hereof.
 
“Code” shall mean the Internal Revenue Code of 1986, as amended, or
corresponding provisions of future laws.
 
“Contributed Asset” is defined in the Contribution Agreement.
 
5

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“Contribution Agreement” shall mean the Contribution Agreement, dated as of
August 10, 2007, pursuant to which LMLP contributes the Qualified Contribution
Assets to the Partnership pursuant to Section 5.1 hereof and a copy of which is
attached as Exhibit B to this Agreement.
 
“CPI” shall mean the Revised Consumer Price Index for All Urban Consumers
published by the Bureau of Labor Statistics of the United States Department of
Labor, U.S.  City Average, All Items, based on 2002 as 100.  If the CPI
hereafter ceases to use the 2002 Base as 100, then the CPI with the new base
shall be used.  If the Bureau of Labor Statistics ceases to publish the CPI,
then the successor or most nearly comparable index shall be used.  In the event
that the U.S.  Department of Labor, Bureau of Labor Statistics, changes the
publication frequency of the CPI so that it is not available when required under
the Agreement, then the CPI for the closest preceding month for which a CPI is
available shall be used in place of the CPI no longer available.
 
“Default Sale Period” is defined in Section 11.3(d) hereof.
 
“Defaulting Partner” is defined in Section 11.3(b) hereof.
 
“Deposit” is defined in Section 5.1(d) hereof.
 
“Distributable Cash” shall mean the amounts distributed pursuant to Sections
7.1(a)(i) and (ii) hereof.
 
“Distribution Date” is defined in Section 7.1(a)(i) hereof.
 
“Economic Interest” shall mean, with respect to any Percentage Interest, (a) all
income, profits, cash flow, proceeds of sales and/or refinancing of the
Qualified Assets, fees or payments of whatever nature and all distributions to
which any Partner would be entitled, now or at any time hereafter, of whatsoever
description or character; (b) all of any Partner’s present and future rights to
and in its Capital Account, whether by way of liquidating distributions or
otherwise, and all of such Partner’s right to receive or share in any surplus of
the Partnership in the event of the dissolution of the Partnership; and (c) all
damages, awards, money and considerations of any kind or character to which any
Partner would be entitled, now or at any time hereafter, arising out of or
derived from any proceeding by or against such Partner in any federal or state
court, under any bankruptcy or insolvency law or under any law relating to
assignments for the benefit of creditors, compositions, extensions or
adjustments of indebtedness, or to any other relief of debtors, or otherwise in
connection with its interest in the Partnership.
 
“Economic Risk of Loss” shall have the meaning specified in Regulations
Section 1.752-2.
 
“Environmental Assessment” shall mean with respect to any Proposed Qualified
Asset, a phase one environmental site assessment performed by a qualified
environmental consultant selected by the General Partner in accordance with the
then current ASTM Standard Practice for Environmental Site Assessments, E1527
and, if required by the General Partner, any
 
6

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additional Phase II sampling, investigation, monitoring or other activities
performed by a qualified environmental consultant.
 
“Environmental Law” shall mean every federal, state, county or other
governmental law, statute, ordinance, rule, regulation, requirement, order
(including any consent order), or other binding obligation, injunction, writ or
decision relating to or addressing the environment or hazardous materials,
including, but not limited to, those federal statutes commonly referred to as
the Clean Air Act, Clean Water Act, Resource Conservation Recovery Act, Toxic
Substances Control Act, Comprehensive Environmental Response, Compensation and
Liability Act and the Endangered Species Act as well as all regulations
promulgated thereunder and all state laws and regulations equivalent thereto, as
each such statute, regulation or state law or regulation equivalent may be
amended from time to time.
 
“Equity Capital” shall mean the book equity of the Partnership, computed in
accordance with GAAP and based on the monthly average over the fiscal year,
adjusted to exclude the effect of any depreciation, unrealized gains, unrealized
losses and other non-cash items.  For realized gains or losses, the amount of
gain or loss shall be based on unadjusted book value.
 
“Event of Default” shall mean with respect to or by any Partner (a) the
declaration of Bankruptcy, (b) a failure to timely perform its obligations under
this Agreement (or with respect to the LMLP Partners, the failure by an LMLP
Affiliated Party to timely perform its obligations under the Contribution
Agreement, the Purchase Agreement or the Management Agreement), including the
failure of the General Partner to timely enforce any material term of the
Management Agreement, or other material breach of this Agreement (or with
respect to the LMLP Partners, any other material breach by an LMLP Affiliated
Party of a material provision of the Contribution Agreement, the Purchase
Agreement or the Management Agreement) and the continuation of such failure or
other material breach beyond the applicable grace, notice or cure periods, if
any, including, without limitation, the obligation to make any Additional
Capital Contributions, (c) any attempted assignment, mortgage, pledge, transfer
or other disposition, whether voluntary or involuntary, of its Percentage
Interests (in whole or in part) not expressly permitted in this Agreement, (d)
the dissolution, withdrawal or incapacity of such Partner, which prohibits such
Partner’s ability to continue as a Partner of the Partnership, (e) the
intentional misrepresentation by such Partner or any of its Affiliates of a
material fact involving the Partnership to another Partner or an Affiliate
thereof or to the Partnership, (f) the entry of a final judgment or decree of a
court or governmental agency having proper jurisdiction, declaring such Partner
guilty of a felony involving moral turpitude, fraud or wrongdoing in connection
with any business activity, (g) the misapplication by such Partner or any of its
Affiliates of any assets of the Partnership, or (h) fraud or material and
willful misconduct by such Partner or any of its Affiliates involving the
Partnership or in the performance of its obligations under this Agreement or the
Management Agreement, Contribution Agreement or Purchase Agreement.  The matters
set forth in clauses (b), (c), (e), (f), (g) and (h) above shall not constitute
an Event of Default if such matter does not pertain to wrongdoing involving a
criminal conviction and such matter is cured (including the payment of any
damages) within thirty (30) days following receipt of notice of such failure
from any other Partner, unless such matter by its very nature is incapable of
being cured within such thirty (30) day period and the defaulting Partner has
commenced and is diligently pursuing a cure, in which event such defaulting
Partner shall have a commercially
 
7

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reasonable period not to exceed ninety (90) days to effect such cure; provided
that in the case of matters set forth in (f), (g) and (h), the cure shall
include the removal of the employees or agents involved in such event from the
active management of the Partnership.  So long as LMLP GP is the General
Partner, a breach of Section 3.8(a) or Section 12.19 shall be considered an
Event of Default by LMLP, unless such breach (i) has been cured within ninety
(90) days of such breach and a similar breach of Section 3.8(a) has not occurred
in the previous twelve (12) months in the case of Section 3.8(a), (ii) was
directly and proximately caused by an action approved by a Supermajority Vote of
the Executive Committee or consented to by Inland and Inland had knowledge of
the possibility of such breach.
 
“Executive Committee” shall mean a committee of five (5) members, consisting of
three (3) members appointed by LMLP and two (2) members appointed by
Inland.  The initial members of the Executive Committee appointed by the LMLP
Partners shall be Michael L. Ashner, T. Wilson Eglin and Brendan P.
Mullinix.  The initial members of the Executive Committee appointed by Inland
shall be Lori Foust and Thomas McGuinness.
 
“Exclusivity Right” is defined in Section 3.9(a)(ii) hereof.
 
“Existing Indebtedness” shall mean the existing indebtedness encumbering the
Qualified Contribution Assets and the Qualified Sale Assets, the principal
balances as of August 1, 2007 are respectively set forth on Schedules 1 and 2.8
hereto.
 
“Extraordinary Call” is defined in Section 5.1(c) hereof.
 
“Extraordinary Call Cap” is defined in Section 5.1(c) hereof.
 
“Extraordinary Capital Contribution” is defined in Section 5.1(c) hereof.
 
“Extraordinary Funding” is defined in Section 5.1(c) hereof.
 
“Fair Market Value” shall mean an amount (in cash) that a bona fide, willing
buyer under no compulsion to buy and a bona fide, willing and unrelated seller
under no compulsion to sell would pay and accept, respectively, for the purchase
and sale of a Qualified Asset, taking into account any liens, restrictions and
agreements then in effect and binding upon the Qualified Asset or any successor
owner thereof and any options, rights of first refusal or offer or other rights
or options that either burden the Qualified Asset or run to the benefit of the
owner of the Qualified Asset; provided, however, that in determining the Fair
Market Value of any Qualified Asset, none of the options, rights of first
refusal or offer or other rights of the Partners hereunder shall be taken into
consideration.
 
“General Partner” shall mean the Person appointed general partner of the
Partnership pursuant to the terms of this Agreement. The initial General Partner
shall be LMLP GP.
 
“Gross Revenues” is defined in Section 3.10(a) hereof.
 
“Indemnified Party” is defined in Section 3.12(a) hereof.
 

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“Initial Capital Contribution” shall mean, (a) with respect to Inland, the
amount of cash and (b) with respect to each LMLP Partner, the amount of cash
and/or the amount of the Contribution Value (as defined in the Contribution
Agreement), in each case as pursuant to Section 5.1 hereof and made prior to
March 1, 2008 and as set forth on Schedule 1 hereto, which shall be amended and
restated to reflect each such contribution.
 
“Initiating Partner” is defined in Section 11.3(f) hereof.
 
“Inland” is defined in the Preamble hereto.
 
“Inland Priority Return” is defined in Section 7.1(a)(i)(B) hereof.
 
“Letter Agreement” shall mean that certain Letter Agreement, dated as of the
date first set forth above, among Inland, LMLP and LMLP GP.
 
“Limited Partner” is defined in the Preamble hereto.
 
“Liquidating Events” is defined in Section 9.1 hereof.
 
“Liquidation” shall mean (a) when used with respect to the Partnership, the date
upon which the Partnership ceases to be a going concern, and (b) when used with
respect to any Partner, the earlier of (i) the date upon which there is a
Liquidation of the Partner and (ii) the date upon which such Partner’s entire
interest in the Partnership is terminated other than by transfer, assignment or
other disposition to a Person other than the Partnership.
 
“Liquidator” shall mean any Person designated as such by a Supermajority Vote of
the Executive Committee.
 
“Losses” and“Profits” are defined in Section 6.2(b) hereof.
 
“LMLP” is defined in the Preamble hereto.
 
“LMLP Affiliated Party” shall mean any LMLP Partner, the Asset Manager and/or
any of their respective Affiliates (but shall in no event include the
Partnership, any SP Subsidiary, Inland or any of its Affiliates).
 
“LMLP GP” is defined in the Preamble hereto.
 
“LMLP Partner” is defined in the Preamble hereto.
 
“LMLP Priority Return” is defined in Section 7.1(a)(i)(C) hereof.
 
“LMLP Sale Affiliates” shall mean the LMLP Affiliates set forth on Schedule 2.8
hereto that are selling the Qualified Sale Assets to the Partnership pursuant to
Section 2.8 hereof.
 
“LXP” shall mean Lexington Realty Trust, a Maryland real estate investment
trust, or its successors or assigns.
 

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“Major Decision” is defined in Section 3.4 hereof.
 
“Majority Vote” shall mean the written consent of three (3) of the five (5)
members of the Executive Committee.
 
“Management Agreement” shall mean the Management Agreement, dated as of August
10, 2007, between the Asset Manager and the Partnership, a copy of which is
attached as Exhibit C hereto, and the agreement between any subsequent Asset
Manager and the Partnership, which shall be substantially in the form as the
Management Agreement attached hereto as Exhibit C, and which shall in all cases
provide that the Management Agreement may be terminated by the Partnership at
any time and the terms of which shall be monitored and enforced by the General
Partner.
 
“Management Fees” shall mean the Property Management Fee and the Partnership
Management Fee.
 
“Material Modification” shall mean a modification relating to the treatment of
Capital Accounts, distributions and/or allocations hereunder which, when
considered on a cumulative basis with the effect of all other such modifications
previously made, is likely to adversely affect the amount ultimately
distributable or paid to any Partner hereunder as determined by the independent
accountants of the Partnership.
 
“Net Cash Flow from Operations” shall mean the gross revenues from Partnership
operations (excluding sales or other dispositions or refinancings of Qualified
Assets) less, without duplication, the sum of any portion thereof used to (a)
pay Operating Expenses, general and administrative costs and overhead of the
Partnership, capital improvements, replacements or debt payments, any Management
Fees payable to the General Partner or Asset Manager pursuant to Section 3.10
hereof, any credits reserved pursuant to Section 3.10 hereof, indemnities and
other extraordinary payments made pursuant to this Agreement or to (b) establish
reasonable reserves for Operating Expenses, capital improvements, replacements,
debt payments and contingencies as provided in the Annual Plan, as such reserves
are calculated, established and maintained by the General Partner pursuant to
Section 3.4.  “Net Cash Flow from Operations” shall not be reduced by real
estate depreciation or by cost amortization, cost recovery deductions or similar
allowances, but shall be increased by any reduction of reserves previously
described in an Annual Plan.
 
“Net Cash from Sales or Refinancings” shall mean the gross cash proceeds from
the sale or other disposition or refinancing or repayment or exercise of
Qualified Assets less (a) any closing, transaction and other costs incurred by
the Partnership in connection with such sale or other disposition or refinancing
or repayment or exercise, as the case may be; (b) the amount required to retire
any debt outstanding against such Qualified Assets; and (c) any amounts required
to fund any related reserves up to the levels required.  Net Cash from Sales or
Refinancings shall be increased by releases of reserves previously funded from
Net Cash from Sales or Refinancings.  “Net Cash from Sales or Refinancings”
shall include all principal and interest payments made with respect to any note
or other obligation received by the Partnership in connection with the sale or
other disposition of any Qualified Asset.
 
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“9% Cash on Cash Return” shall mean, with respect to either Inland or LMLP a
return sufficient to achieve a 9% cash on cash yield calculated by dividing (a)
Distributable Cash distributed to such Partner by (b) the Capital Contributions
(including credited amounts under Section 3.10 hereof) made, plus, (i) solely
with respect to Inland, the Acquisition Fees (if any) paid by Inland, or (ii)
solely with respect to LMLP, 17.65% of the amount the Acquisition Fees (if any)
paid by Inland. For purposes of calculating Inland’s 9% Cash on Cash Return,
clause (b) hereof shall be increased by the outstanding Cap Ex/ Lease Assumed
Asset Amount.  For the avoidance of doubt, the amount of Capital Contributions
under clause (b) herein shall not include the outstanding amount, if any, of
Preferred Equity Capital Contributions for purposes of calculating the 9% Cash
on Cash Return.
 
“Nonrecourse Liability” shall mean any Partnership liability (or portion
thereof) the Economic Risk of Loss of which is not borne by any Partner or any
party related to any Partner, as such related party is described in the
applicable Regulations under Code Section 752.
 
“Non-Parameter Asset” is defined in Section 3.6(c) hereof.
 
“Offer Price” shall mean the ROFO Offer Price or the Buy/Sell Offer Price, as
applicable.
 
“Offered Agreement” is defined in Section 11.2(a) hereof.
 
“O.P. Unit” shall mean a partnership interest in a partnership in which LXP or
its Affiliate is a partner.
 
“Operating Expenses” shall mean (a) all reasonable and customary costs and
expenses of Third Parties retained in connection with the ownership, leasing,
operation, repair and maintenance of the Qualified Assets and (b) real estate
taxes, insurance premiums, utility charges, rent collection and lease
enforcement costs, brokerage commissions to the extent applicable to the period
in question (but excluding any Acquisition Fees payable to the Asset Manager
under Section 3.6(g) hereof), maintenance expenses, costs of repairs and
replacements (which, under generally accepted accounting principles consistently
applied, may be expensed during the period when made) and management fees
(including any Management Fees payable to the Asset Manager pursuant to
Section 3.10 hereof) in connection with the ownership, leasing, operation,
repair and maintenance of the Qualified Assets.  Operating Expenses shall not
include general and administrative costs and overhead of the Partnership and
debt payments.
 
“Original Agreement” is defined in the Preamble hereto.
 
“Other Partner(s)” in respect of either or both of the LMLP Partners shall mean
Inland and in respect of Inland shall mean either or both of the LMLP Partners.
 
“Partially Adjusted Capital Account” shall mean, with respect to any Partner for
any taxable year of the Partnership, the Capital Account balance of such Partner
at the beginning of such year, adjusted for all contributions and distributions
during such year and all special allocations pursuant to Section 6.3 hereof with
respect to such year but before giving effect to any allocations pursuant to
Section 6.2 hereof with respect to such year.
 
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“Partner” is defined in the Preamble hereto.
 
“Partner Nonrecourse Debt” shall have the meaning set forth in Regulations
Section 1.704-2(b)(4).
 
“Partner Nonrecourse Debt Minimum Gain” shall have the meaning set forth in
Regulations Section 1.704-2(i)(2).
 
“Partner Nonrecourse Deductions” is defined in Section 6.3(d) hereof.
 
“Partnership” is defined in the Preamble hereto.
 
“Partnership Management Fee” is defined in Section 3.10(b) hereof.
 
“Partnership Minimum Gain” shall have the meaning set forth in
Section 1.704-2(b)(2) and (d) of the Regulations.
 
“Percentage Interest” shall mean the entire undivided ownership interest in the
Partnership of any Partner at any particular time, (a) expressed as a percentage
rounded to the nearest one one-hundredth (0.01%), (b) determined at such time by
dividing the total Capital Contributions (excluding Preferred Equity Capital
Contributions) made by such Partner by the total Capital Contributions
(excluding Preferred Equity Capital Contributions) made to the Partnership by
all Partners and (z) as may be adjusted from time to time in accordance with the
terms hereof.  The Percentage Interest of each Partner as of the date first set
forth above shall be as described on Schedule 1 hereto (without regard to the
Preferred Equity Capital Contribution).
 
“Permitted Expenses” shall mean, for each annual period covered by an Annual
Plan, Operating Expenses, capital improvements, replacements and debt payments
as set forth therein plus, with respect to each budget line item in the Annual
Budget portion of such Annual Plan, the greater of (a) five percent (5%) of each
such budget line item or (b) Twenty Thousand Dollars ($20,000.00); provided,
however, that the aggregate Permitted Expenses (other than the Management Fees
payable to the Asset Manager pursuant to Section 3.10 hereof), when added to all
other obligations incurred or reserve amounts accrued in excess of the
applicable budget line items in such Annual Budget portion of the Annual Plan,
shall not exceed (i) One Hundred Thousand Dollars ($100,000) in any fiscal year
for a particular Qualified Asset or (ii) an average (taking into account all
Qualified Assets then owned by the Partnership) of Fifty Thousand Dollars
($50,000) per Qualified Asset.  Permitted Expenses shall also mean (a) all
reasonable and customary costs and expenses of Third Parties retained in
connection with the Acquisition Activities as provided in Section 3.6(f) hereof,
(b) any reasonable costs or expenses incurred in implementing a Major Decision
approved as provided in Section 3.4 hereof and not otherwise already included in
an Annual Plan, and (c) costs and expenses incurred by and on behalf of the
Partnership in connection with the formation of the Partnership, including legal
fees and costs and expenses associated with assumption or refinancing the
Existing Indebtedness, but excluding fees and expenses set forth in Section
12.16 hereof.
 
“Person” shall mean any individual, trust (including a business trust),
unincorporated association, corporation, limited liability company, joint stock
company, general partnership, limited partnership, joint venture, governmental
authority or other entity.
 
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“Physical Inspection Report” shall mean a report prepared by a qualified
independent third party engineer, architect or other real estate inspector
selected by the General Partner concerning the physical condition of any
Proposed Qualified Asset.
 
“Plan Amendment” is defined in Section 3.5(c).
 
“Preferred Equity” shall mean the Preferred Equity Capital Contribution by LMLP
pursuant to Section 5.2 hereof.
 
“Preferred Equity Capital Contribution” shall mean the contribution to the
Partnership by LMLP pursuant to Section 5.2 hereto.
 
“Preferred Equity Redemption Amount” shall mean one hundred and twenty five
(125%) percent of the allocated amount of the outstanding Preferred Equity
Capital Contribution set forth opposite a Qualified Assumed Asset on Schedule 1
hereto; provided, that for the purposes of Section 3.8(e) hereof only, if LMLP
is no longer the General Partner because of an Event of Default caused by an
LMLP Partner or an LMLP Affiliated Party, then the Preferred Equity Redemption
Amount shall mean one hundred percent (100%) of the allocated amount of the
Outstanding Preferred Equity Capital Contribution set forth opposite a Qualified
Assumed Asset on Schedule 1 hereto.
 
“Preferred Equity Return” shall mean a cumulative distribution on the
outstanding Preferred Equity paid quarterly in accordance with Section 7.1
hereof at a rate of 6.5% per annum; provided, that if the Partnership fails to
(i) make a distribution to LMLP in an amount equal to the Preferred Equity
Return on a Distribution Date, such distribution shall accrue, and LMLP shall be
entitled to additional distributions on such accrued amount, at the rate of 6.5%
per annum compounded quarterly, or (ii) redeem any Preferred Equity when such
redemption is required hereunder, such  redemption amount shall accrue, and LMLP
shall be entitled to additional distributions on such accrued amount, at the
rate of 10.5% per annum compounded quarterly.
 
“Priority Loan” is defined in Section 5.1(a) hereof.
 
“Priority Return” shall mean the Inland Priority Return and/or the LMLP Priority
Return, as applicable.
 
“Profits” and “Losses” are defined in Section 6.2(b) hereof.
 
“Property Management Fee” is defined in Section 3.10(a) hereof.
 
“Proposed Plan” is defined in Section 3.5(a) hereof.
 
“Proposed Qualified Asset” is defined in Section 3.6(a) hereof.
 
“Purchase Agreement” shall mean the Purchase Agreement, dated as of August 10,
2007, pursuant to which the Partnership purchases the Qualified Sale Assets from
the LMLP Sale Affiliates pursuant to Section 2.8 hereof and a copy of which is
attached as Exhibit D to this Agreement.
 
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“Purchasing Partner” shall mean the purchasing Partner under Section 11.1 or
Section 11.2 hereof, as the case may be.
 
“Purchase Price” shall mean (a) with respect to each Qualified Contribution
Asset, the Contribution Value which will be set forth on Schedule 1 to the
Contribution Agreement upon acquisition of the Qualified Contribution Asset, (b)
with respect to each Qualified Sale Asset, the Sales Price which will be set
forth on Schedule 1 to the Purchase Agreement upon acquisition of the Qualified
Sale Asset, and (c) with respect to each other Qualified Asset, the gross
purchase cost of the Qualified Asset.
 
“Qualified Asset” or “Qualified Assets” shall mean the direct or indirect
interest of the Partnership in (a) each Approved Qualified Asset and
Non-Parameter Asset acquired by the Partnership pursuant to Section 3.6 hereof,
and (b) the Qualified Assumed Assets.
 
“Qualified Assumed Assets” shall mean the Qualified Contribution Assets and the
Qualified Sale Assets.
 
“Qualified Contribution Assets” shall mean the assets set forth on Schedule 1,
each of which shall be a Qualified Asset upon contribution to the Partnership
pursuant to the Contribution Agreement and Section 5.1(a) hereof.
 
“Qualified Sale Assets” shall mean the interests of the LMLP Sale Affiliates in
the assets set forth on Schedule 2.8, each of which shall be a Qualified Asset
upon acquisition by the Partnership pursuant to the Purchase Agreement.
 
“Recoverable Amounts” is defined in Section 3.10(a) hereof.
 
“Regulations” shall mean the income tax regulations promulgated under the Code,
whether temporary, proposed or finalized, as such regulations may be amended
from time to time (including corresponding provisions of future regulations).
 
“Regulatory Allocations” is defined in Section 6.3(f) hereof.
 
“REIT” shall mean “real estate investment trust” within the meaning of Sections
856-860 of the Code.
 
“Removal Event” shall mean (a) an Event of Default caused by an LMLP Partner or
an LMLP Affiliated Party or (b) a Change of Control.
 
“Required Third Party Price” is defined in Section 11.1(a) hereof.
 
“Responding Partner” shall mean the ROFO Responding Partner or the Buy/Sell
Responding Partner, as applicable.
 
“Rights Trigger Date” shall mean the earliest of the following: (a) the fourth
anniversary of the date first set forth above; (b) an Event of Default; (c) a
Change of Control; (d) termination of the Management Agreement by the
Partnership; and (e) a Removal Event.
 
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“ROFO Notice” is defined in Section 11.1(a) hereof.
 
“ROFO Offer Price” is defined in Section 11.1(a) hereof.
 
“ROFO Offering Partner” is defined in Section 11.1(a) hereof.
 
“ROFO Responding Partner” is defined in Section 11.1(a) hereof.
 
“ROFO Response Notice” is defined in Section 11.1(a) hereof.
 
“ROFO Terms” is defined in Section 11.1(a) hereof.
 
“Section 704(c) Property” shall mean (a) each item of property to which
Section 704(c) of the Code or Section 1.704-3(a)(3) of the Regulations applies
that is contributed to the Partnership, and (b) any property owned by the
Partnership which is governed by the principles of Section 704(c) of the Code,
as contemplated by Section 1.704-1(b)(4)(i) and other analogous provisions of
the Regulations.
 
“Selling Partner” shall mean the selling Partner under Section 11.1 or Section
11.2 hereof, as the case may be.
 
“SP Subsidiary” shall mean an entity selected by the General Partner which shall
be wholly-owned (directly or indirectly) by the Partnership, the purpose of
which is limited to acquiring, financing, holding for investment, preserving,
managing, operating, improving, leasing, selling, exchanging, transferring and
otherwise using or disposing of a Qualified Asset or Qualified Assets.
 
“SP Subsidiary Limited Liability Company Agreement” shall mean the limited
liability company agreement of an SP Subsidiary that is the general partner of
another SP Subsidiary, which, except as provided in Section 3.4 hereof, shall be
substantially in the form attached hereto as Exhibit E.
 
“SP Subsidiary Partnership Agreement” shall mean the limited partnership
agreement of an SP Subsidiary that is the owner of a Qualified Asset, which,
except as provided in Section 3.4 hereof, shall be substantially in the form
attached hereto as Exhibit F.
 
“SP Subsidiary Agreements” shall mean the SP Subsidiary Limited Liability
Company Agreements and the SP Subsidiary Partnership Agreements.
 
“Supermajority Vote” shall mean the written consent of four (4) of the five (5)
members of the Executive Committee.
 
“Target Account” shall mean, with respect to any Partner for any taxable year of
the Partnership, the excess of (a) an amount (which may be either a positive
balance or a negative balance) equal to the hypothetical distribution (or
contribution) such Partner would receive (or contribute) if all assets of the
Partnership, including cash, were sold for cash equal to their Book Basis
(taking into account any adjustments to Book Basis for such year), all
liabilities (including prepayment penalties, yield maintenance fees and similar
costs) of the Partnership
 
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were then satisfied according to their terms (except that if the nonrecourse
liabilities secured by an asset exceed the Book Basis of such asset, such
calculation shall be made assuming that the asset were transferred to the lender
in satisfaction of the debt) and all remaining proceeds from such sale were
distributed pursuant to Section 9.2 over (b) such Partner’s share of Partnership
Minimum Gain and Partner Nonrecourse Debt Minimum Gain immediately prior to such
sale.
 
“Tax Depreciation” shall mean with respect to any property owned by the
Partnership depreciation, accelerated cost recovery, or modified cost recovery,
and any other amortization or deduction allowed or allowable for federal, state
or local income tax purposes.
 
“Tax Matters Partner” is defined in Section 6.5 hereof.
 
“Third Parties” shall mean consultants, engineers, environmental consultants,
accountants, attorneys, contractors and subcontractors, brokers or managers, but
excluding any LMLP Affiliated Party.
 
“Third Party Sale Period” is defined in Section 11.1(b) hereof.
 
ARTICLE II
FORMATION, DURATION AND PURPOSES; PURCHASE OF INITIAL
PROPERTIES
 
Section 2.1    Formation.  Pursuant to the Delaware Revised Uniform Limited
Partnership Act, codified in the Delaware Code Annotated, Title 6, Sections
17-101 to 17-1111, as the same may be amended from time to time (the “Act”), the
Partners agree to form and hereby form the Partnership by entering into this
Agreement.  The Partners hereby acknowledge that a certificate of limited
partnership has been executed and filed in the office of the Delaware Secretary
of State on August 8, 2007.  The execution and filing of such certificate of
limited partnership with the Delaware Secretary of State is hereby authorized,
ratified and approved by the Partners.  The rights, liabilities and obligations
of any Partner with respect to the Partnership shall be determined in accordance
with the Act and this Agreement.  To the extent anything contained in this
Agreement modifies, supplements or otherwise affects any such right, liability,
or obligation arising under the Act, this Agreement shall supercede the Act to
the extent not restricted thereby.
 
Section 2.2    Name; Registered Agent and Registered Office.  The name of the
Partnership and the name under which the business of the Partnership shall be
conducted shall be “Net Lease Strategic Assets Fund L.P.”  The registered agent
of the Partnership shall be Corporation Service Company, and the registered
office of the Partnership shall be at Corporation Service Company, 2711
Centerville Road, Suite 400, Wilmington, Delaware 19808.  The General Partner
may select another such registered agent or registered office from time to time.
 
Section 2.3    Principal Office.  The principal place of business and office of
the Partnership shall be located at c/o The Lexington Master Limited
Partnership, One Penn Plaza, Suite 4015, New York, New York 10119-4015, or at
such other place as the General Partner may determine from time to time.  The
business of the Partnership may also be conducted at such additional place or
places as the General Partner may determine.
 
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Section 2.4    Purposes and Business.  The business of the Partnership is to,
directly or indirectly, acquire, finance, refinance, hold for investment,
preserve, manage, operate, improve, lease, sell, exchange, transfer and
otherwise use or dispose of the Qualified Assets as may be, directly or
indirectly, acquired by the Partnership from time to time pursuant to the terms
hereof, which Qualified Assets may be located anywhere in the United States.  In
connection therewith and without limiting the foregoing, the Partnership shall
have the power to dispose of the Qualified Assets in accordance with the terms
of this Agreement and to engage in any and all activities related or incidental
thereto, all for the benefit of the Partners.  
 
Section 2.5    Term.  The term of the Partnership shall commence on the date of
this Agreement and shall continue in full force and effect until terminated
pursuant to the terms hereof.  No Partner may withdraw from the Partnership
without the prior consent of the General Partner, other than as expressly
provided in this Agreement.
 
Section 2.6    Other Qualifications.  The Partnership shall file or record such
documents and take such other actions under the laws of any jurisdiction in
which the Partnership does business as are necessary or desirable to permit the
Partnership to do business in any such jurisdiction and to promote the
limitation of liability for the Partners in any such jurisdiction.
 
Section 2.7    Limitation on the Rights of Partners.  Except as otherwise
specifically provided in this Agreement, (a) no Partner shall have the right to
withdraw or retire from, or reduce its contribution to the capital of, the
Partnership; (b) no Partner shall have the right to demand or receive assets
other than cash in return for its Capital Contribution; and (c) no Partner shall
have priority over any other Partner either as to the return of its Capital
Contribution or as to profits or distributions.
 
Section 2.8    Purchase of Qualified Sale Assets.  The LMLP Sale Affiliates have
agreed to sell, and the Partnership has agreed to purchase the Qualified Sale
Assets described on Schedule 2.8 hereto at the purchase prices set forth on
Schedule 2.8 hereto pursuant to the Purchase Agreement.  In the event the
Qualified Sale Asset located at 3600 Southgate Drive, Danville, Illinois is
acquired by the Partnership pursuant to the Purchase Agreement and (i) the
funding of the currently contemplated 55,000 square foot expansion at such
Qualified Asset has not occurred, LMLP or an LMLP Affiliated Party shall pay
directly up to $8,823,826 of the costs incurred to complete the expansion and
required to be funded, and the Partnership shall be responsible for all costs in
excess of such amount and shall fund such excess through an Additional Capital
Contribution, or (ii) the funding of the currently contemplated 55,000 square
foot expansion at such Qualified Asset has occurred, the Partnership shall
reimburse LMLP or an LMLP Affiliate Party designated by LMLP for all costs
incurred to complete the expansion and required to be funded in excess of
$8,823,826.
 
Section 2.9    Remuneration To Partners.  No Partner is entitled to remuneration
for acting on behalf of the Partnership.  Except as otherwise authorized in this
Agreement, including but not limited to Sections 3.6 and 3.10, no Partner is
entitled to remuneration for acting in the Partnership business.

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ARTICLE III
MANAGEMENT RIGHTS, DUTIES, AND POWERS
OF THE GENERAL PARTNER; TRANSACTIONS INVOLVING PARTNERS
 
Section 3.1    Management.
 
(a)           Management by the General Partner.  LMLP GP shall be the General
Partner until (x) a Removal Event, or (y) LMLP GP resigns as the General
Partner.  The General Partner shall manage the investments, business and
day-to-day affairs of the Partnership and shall be responsible for acquisitions
and dispositions of Qualified Assets, subject, however, to the provisions of
Section 3.4 hereof with respect to Major Decisions, of Section 3.6, Section 3.7
and Article XI hereof with respect to the acquisition or sale of Qualified
Assets and any other provisions of this Agreement concerning the investments,
business and day-to-day affairs of the Partnership.  The General Partner shall
use commercially reasonable efforts to manage the investments, business and
day-to-day affairs of the Partnership in accordance with the Annual Plan
approved in accordance with Section 3.5 hereof.  Any action taken by the General
Partner in accordance with the terms of this Agreement shall constitute the act
of and serve to bind the Partnership.  The General Partner may delegate certain
of the tasks that are to be performed in connection with the acquisition of
Qualified Assets, the management of the Qualified Assets or the business and
day-to-day affairs of the Partnership.  Any such delegation to third parties
provided in the previous sentence shall be at the cost of the General Partner
and supervised by the General Partner and such delegation shall not relieve the
General Partner of any of its obligations hereunder.  Any right of any Partner
to consent to any action requiring its consent hereunder shall not be diminished
or otherwise affected by such delegation.
 
(b)           Delegation to the Executive Committee.
 
(i)            The Executive Committee shall be delegated the authority to
exercise the authority conferred on it by this Agreement.  No member of the
Executive Committee shall (x) have any interest in or rights under this
Agreement, (y) be admitted as a substitute for any Partner or (z) have any of
the rights of a Partner under the Act or this Agreement.
 
(ii)            Action requiring a Supermajority Vote by the Executive Committee
shall be taken without a meeting by a consent in writing setting forth the
action taken, which shall be signed by at least four (4) of the five (5) members
of the Executive Committee.  Action requiring a Majority Vote of the Executive
Committee shall be taken at a special meeting of the Executive Committee, upon
not less than five (5) Business Days’ prior written notice by the General
Partner to the members of the Executive Committee.  Such meetings shall be held
at the time specified in the notice at a location selected by the General
Partner or, if requested by any member of the Executive Committee, by
teleconference.

(iii)           Any member of the Executive Committee may resign at any time by
giving written notice to each Partner.  The resignation of any member of the
Executive Committee shall take effect upon receipt of the notice thereof or at
such later time as shall be specified in such notice; and, unless otherwise
specified therein, the acceptance of such

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resignation shall not be necessary to make such resignation effective.  The
Partner who appointed the resigning Executive Committee member shall appoint a
replacement Executive Committee member within seven (7) Business Days of such
resignation.  Any Partner who appointed an Executive Committee member may remove
such member at any time upon written notice to the other Partners, which notice
shall name and appoint a new Executive Committee member to replace the Executive
Committee member so removed.
 
(iv)          The members of the Executive Committee shall not be entitled to
receive any fees or reimbursement for any expenses for their service in such
capacity.
 
(c)           Delegation to the Asset Manager.  The General Partner shall retain
the Asset Manager pursuant to a Management Agreement substantially in the from
attached hereto as Exhibit C and delegate (pursuant to Sections 3.1(a) and (b)
above) to the Asset Manager the management of the Qualified Assets and, during
the Acquisition Period, the performance of the tasks necessary for the
evaluation of Proposed Qualified Assets and the acquisition of Approved
Qualified Assets as contemplated in Section 3.6 hereof.  The Asset Manager shall
(x) have no interest in or rights under this Agreement, (y) not be admitted as a
substitute for any Partner and (z) not have any of the rights of a Partner under
the Act or this Agreement.  Any delegation to the Asset Manager provided in this
Section 3.1(b) shall be supervised by the General Partner and the Executive
Committee and such delegation shall not relieve the General Partner of any of
its obligations hereunder as General Partner.
 
(d)           Right to Rely on Authority of the General Partner.  Any action
taken by the General Partner, acting on behalf of the Partnership pursuant to
the authority conferred thereon in this Agreement, shall be binding on the
Partnership.  In no event shall any Person dealing with the General Partner with
respect to the conduct of the affairs of the Partnership be obligated to
ascertain whether the terms of this Agreement have been complied with, or be
obligated to inquire into the necessity or expediency of any action of the
General Partner.
 
(e)           Inland’s Right to Enforce Partnership Rights Against LMLP
Affiliated Parties.  Notwithstanding anything herein to the contrary, if LMLP
GP, in its capacity as General Partner, has failed to enforce any of the
Partnership’s rights against any LMLP Affiliated Party that has defaulted on any
obligation owed to the Partnership under this Agreement, the Contribution
Agreement, the Purchase Agreement or any agreement between the Partnership and
any LMLP Affiliated Party (including the Management Agreement), Inland shall be
entitled to exercise, on behalf of the Partnership and at the expense of the
Partnership, the Partnership’s rights and obligations arising under such
agreements all without the consent or approval of LMLP GP or the Executive
Committee.
 
Section 3.2    Actions of the General Partner.
 
(a)            Acts of the General Partner.  Any action required or permitted to
be taken by the General Partner shall be taken by written consent of the General
Partner, and the writing or writings shall be filed with the books and records
of the Partnership.

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(b)           General Informational Meetings.  The General Partner shall hold
informational meetings with the Partners to review and discuss the Partnership’s
activities and business at least once annually and, so long as LMLP GP is the
general partner and if requested by Inland upon not less than ten (10) Business
Days’ prior written notice, at least once quarterly.  Such meetings shall be
held at a mutually convenient time at a location selected by the General Partner
and teleconferencing will be made available.
 
Section 3.3    Authority of the General Partner.  
 
(a)           Except as otherwise provided in this Article III, the General
Partner is hereby authorized to do the following, for and in the name and on
behalf of the Partnership, as may be necessary, convenient or incidental to the
implementation of the Annual Plan or to the accomplishment of the purposes of
the Partnership (provided, that if any of the following constitutes a Major
Decision that is not specifically set forth in the Annual Plan, the General
Partner shall first obtain the consent of the Executive Committee pursuant to
Section 3.4 hereof):
 
(i)            enter into a good faith non-binding letter of intent concerning
the acquisition of a Proposed Qualified Asset.
 
(ii)           acquire by purchase, exchange or otherwise, any Proposed
Qualified Asset consistent with the purposes of the Partnership, but only in
accordance with Sections 3.4 and  3.6 hereof;
 
(iii)          operate, manage and maintain each of the Qualified Assets;
 
(iv)          take such action as is necessary to form, create or set up any SP
Subsidiary that has been approved in accordance with Section 3.6 hereof;
 
(v)           dissolve, terminate or wind-up any SP Subsidiary, provided that
any Qualified Asset held by such SP Subsidiary has been disposed of in
accordance with Article XI hereof or transferred to the Partnership or any other
SP Subsidiary;
 
(vi)          enter into, amend, extend or renew any lease of any Qualified
Asset or any part thereof or interest therein approved as part of the Annual
Plan;
 
(vii)         initiate legal proceedings or arbitration with respect to any
lease of any Qualified Asset or part thereof or interest therein; provided that
the initiation of such legal proceedings or arbitration shall have arisen (x) in
connection with any matter of an emergency nature, (y) for the collection of
rent or (z) involving an uninsured claim of less than $100,000;
 
(viii)        dispose of any or all of the Qualified Assets by sale, lease,
exchange or otherwise, and grant an option for the sale, lease, exchange or
otherwise of any or all the Qualified Assets, but only in accordance with
Section 3.7 hereof;
 
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(ix)           employ and dismiss from employment any and all employees, agents,
independent contractors, attorneys and, subject to Section 3.4 hereof,
independent accountants for the Partnership;
 
(x)            pay all Permitted Expenses (and maintain in reserve the amount of
any credits pursuant to Section 3.10 hereof);
 
(xi)           execute and deliver any and all agreements, contracts, documents,
certifications and instruments necessary or convenient in connection with the
management, maintenance and ownership of the Qualified Assets and in connection
with any other matters with respect to which the General Partner has authority
to act pursuant to the Annual Plan or as set forth in this Section 3.3;
 
(xii)          draw down funds as needed under any approved lines of credit or
other financing previously approved under Section 3.4 hereof;
 
(xiii)         finance or refinance a portion of the purchase price of any
Qualified Asset and incur (and refinance) indebtedness secured by any Qualified
Asset, or any portion thereof or any interest or estate therein and incur any
other secured or unsecured borrowings or other indebtedness;
 
(xiv)         implement those Major Decisions that are specifically set forth in
the Annual Plan or that have been approved by the Executive Committee pursuant
to Section 3.4 below; and
 
(xv)          subject to any conditions expressly provided in this Agreement,
engage in any kind of activity and perform and carry out contracts of any kind
necessary or incidental to or in connection with the accomplishment of the
purposes of the Partnership as may be lawfully carried out or performed by a
limited partnership under the laws of each state in which the Partnership is
then formed or registered or qualified to do business.
 
Section 3.4     Major Decisions.  
 
(a)           Major Decisions. Notwithstanding anything to the contrary
contained in this Agreement, but subject to Section 3.4(b), Section 3.8(e) and
Section 3.8(f) hereof, the General Partner shall not take, on behalf of the
Partnership, and shall not permit the Partnership or the Asset Manager to take,
any action, make any decision, expend any sum or undertake or suffer any
obligation which comes within the scope of any Major Decision unless such Major
Decision is approved by the Executive Committee in the manner required by
Section 3.4(b) in advance in writing or as specifically set forth in the Annual
Plan.
 
As used herein, “Major Decision” shall mean a decision to take any of the
following actions directly or indirectly through or for an SP Subsidiary:
 
                    (i)           the acquisition (including any decisions under
Section 3.6) by purchase, exchange or otherwise of any Qualified Asset or other
asset and except for the acquisition of the Qualified Assumed Assets; provided
that acquisitions of Qualified Assets shall only occur during the Acquisition
Period;
 
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(ii)          the construction, alteration, improvement, repair, rehabilitation,
razing, rebuilding or replacement of any building or other improvements or the
making of any capital improvements, replacements, repairs, alterations or
changes in, to or on any Qualified Asset, or any part thereof, except to the
extent provided for in the Annual Plan; provided that repairs of an emergency
nature may be undertaken without prior approval of a majority of the members of
the Executive Committee provided the General Partner notifies each member of the
Executive Committee in writing thereof within two (2) Business Days following
the commencement of such emergency repairs;
 
(iii)         the reinvestment for restoration purposes of (i) insurance
proceeds in excess of $500,000 received by the Partnership in connection with
the damage or destruction of any Qualified Asset or (ii) condemnation proceeds
in excess of $500,000 received by the Partnership in connection with the taking
or settlement in lieu of a threatened taking of all or any portion of any
Qualified Asset; provided that (x) if the determination is made not to reinvest
any such insurance or condemnation proceeds, then so much thereof as may be
necessary shall be applied to the razing or other disposition of the remaining
improvements as may be required by law or by a reasonably prudent property
manager and the balance of such insurance or condemnation proceeds shall be
distributed in accordance with this Agreement and (y) any distribution of such
insurance or condemnation proceeds shall be made in accordance with Section
7.1(a)(ii) hereof.
 
(iv)         the commencement of any case, proceeding or other action seeking
protection for the Partnership as debtor under any existing or future law of any
jurisdiction relating to Bankruptcy, insolvency, reorganization or relief of
debtors; any consent to the entry of an order for relief in or institution of
any case, proceeding or other action brought by any third party against the
Partnership as a debtor under any existing or future law of any jurisdiction
relating to Bankruptcy, insolvency, reorganization or relief of debtors; the
filing of an answer in any involuntary case or proceeding described in the
previous clause admitting the material allegations of the petition therefor or
otherwise failing to contest any such involuntary case or proceeding; the
seeking of or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator, custodian or any similar official for the Partnership or
for a substantial portion of its Qualified Assets; any assignment for the
benefit of the creditors of the Partnership; or the admission in writing that
the Partnership is unable to pay its debts as they mature or that the
Partnership is not paying its debts as they become due;
 
(v)          the extension of the statute of limitations for assessing or
computing any tax liability against the Partnership or the amount of any
Partnership tax item or to settle any dispute with respect to any income, or any
other material, tax;
 
(vi)          a merger, sale or recapitalization of the Partnership or a sale or
other disposition, including a disposition by lease, of any or all of the
Qualified Assets, except in accordance with Article XI hereof;
 
(vii)         the financing or refinancing of, or the increasing of any mortgage
indebtedness encumbering, any Qualified Asset, or any portion thereof or any
interest or estate therein, whether recourse or non-recourse to the Partnership,
or the incurrence of indebtedness secured by any Qualified Asset, or any portion
thereof or any interest or estate
 
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therein, or the incurrence of any other secured or unsecured borrowings or other
indebtedness by the Partnership, including determination of the terms and
conditions thereof, and any amendments to such terms and conditions or otherwise
with respect to anything in this clause (vii) except (A) in accordance with
Section 3.8(f) hereof or (B) as contemplated in an Annual Plan or in accordance
with Section 3.4 hereof;
 
(viii)         the approval of the Annual Plan, including any budget line item,
and any amendment to the Annual Plan;
 
(ix)            the incurring of any cost or expense for any fiscal year, other
than a Permitted Expense;
 
(x)             the entering into of any transaction or agreement with or for
the benefit of, or the employment or engagement of, any LMLP Affiliated Party,
except as expressly contemplated in Sections 3.1(c) and 3.10 hereof;
 
(xi)           except as required by the lenders under the loan documents
governing indebtedness of the Partnership, the establishment of a reserve for
working capital, capital expenditures or to pay other costs and expenses
incident to ownership of the Qualified Assets and for such other Partnership
purposes in excess of an aggregate of  (A) $100,000 or (B) $500,000;
 
(xii)           the initiation of legal proceedings or arbitration by the
Partnership or the settlement of any litigation against the Partnership
involving an uninsured claim in excess of (A) $100,000 or (B) $500,000; provided
that the initiation of such legal proceedings or arbitration (x) in connection
with any matter of an emergency nature, or (y) for the collection of rent, shall
not be a Major Decision subject to this Section 3.4(a);
 
(xiii)         with respect to any lease of any Qualified Asset, or part thereof
or interest therein, the entering into, amending, extending or renewing thereof,
in each case not already approved as part of the Annual Plan;
 
(xiv)         the admission of a new Partner to the Partnership or acquisition
by an existing Partner of an additional interest in the Partnership, except in
accordance with Article VIII and XI hereof;
 
(xv)          the engagement of an accounting firm to audit the financial
statements of the Partnership;
 
(xvi)         the extension of the Acquisition Period, which decision to extend
shall be made not less than 60 days prior to the end of the Acquisition Period;
 
(xvii)        making an Extraordinary Call to the Partners to fund an operating
deficit of the Partnership in excess of the Extraordinary Call Cap;
 
(xviii)       except in connection with items set forth in the Annual Budget or
items constituting a Permitted Expense, the entry into any agreement by the
 
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Partnership involving more than $100,000 of consideration or having a term in
excess of 1 year and in all cases any property management agreement or brokerage
agreement;
 
(xix)          the winding up or dissolution of the Partnership;
 
(xx)           any deviation from the SP Subsidiary Agreements, which directly
or indirectly impairs the economic or management rights of the Partnership; and
 
(xxi)         subject to Section 3.3 hereof, the execution of any agreement,
contract or understanding or other arrangement to effectuate a Major Decision.
 
(b)            Vote Required. Major Decisions shall require the following
approvals:
 
(i)             A Supermajority Vote shall be required for the Major Decisions
set forth in Section 3.4(a)(i)-(iv), (vi)-(x), (xi)(B), (xii)(B) and
(xiii)-(xxi).
 
(ii)            A Majority Vote shall be required for the Major Decisions set
forth in Section 3.4 (v), (xi)(A) and (xii)(A).
 
(c)            Non-Binding Letters of Intent. Notwithstanding the foregoing, the
General Partner shall be authorized to execute non-binding letters of intent
with respect to property and operational actions that constitute Major
Decisions.
 
Section 3.5    Preliminary and Annual Plans.
 
(a)            Preparation and Approval of Plans.  The General Partner shall
prepare and deliver to the Executive Committee for its approval or disapproval a
proposed annual plan for the next fiscal year of the Partnership (as further
described below, a “Proposed Plan”).  The Proposed Plan shall cover the
Partnership and each Qualified Asset and shall include:
 
(i)             a proposed Annual Budget covering the Partnership and each
Qualified Asset and a brief narrative description of the material portions
thereof;
 
(ii)            a plan of operations for each Qualified Asset, including
anticipated repairs and improvements;
 
(iii)           estimated financing needs and estimated financing costs for the
Partnership and each Qualified Asset;
 
(iv)           estimated cash flow projections for the Partnership and each
Qualified Asset;
 
(v)            a description of tenants then in occupancy in each Qualified
Asset;
 

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(vi)           a schedule of Qualified Assets, any leases which are expiring
during such fiscal year and the plans for the re-leasing of such Qualified
Assets and any lease restructures (such as subleasing or expansion by a tenant)
of which the General Partner is aware;
 
(vii)          projected capital improvements and capital repairs;
 
(viii)         a description of any Proposed Qualified Assets to the extent
identified, including the terms of acquisition, provided that nothing in the
Proposed Plan shall affect or limit the provisions of Section 3.6 hereof; and
 
(ix)           any other information relative to the management of the Qualified
Assets or the Partnership reasonably requested by any member of the Executive
Committee.
 
The General Partner shall prepare and submit a Proposed Plan to the Executive
Committee on or before November 15th of the year prior to such fiscal year.  The
Executive Committee shall approve or disapprove such revised Proposed Plan no
later than December 15th of the year prior to the fiscal year covered by such
revised Proposed Plan.  Any Proposed Plan approved by the Executive Committee in
accordance with Section 3.4 shall become the annual plan for the next fiscal
year of the Partnership (any Proposed Plan approved by the Executive Committee
for any fiscal year of the Partnership, and as may be amended from time to time
by a Plan Amendment, an “Annual Plan”).  A model of an Annual Plan is attached
as Schedule 3.5 and made a part hereof.  The General Partner, within thirty (30)
days after the closing of the last to be acquired of Qualified Assumed Assets,
shall submit the initial Annual Plan, covering all of the Qualified Assets held
by the Partnership for the remainder of the then current year, to the Executive
Committee for approval or disapproval in accordance with the procedures outlined
herein which Proposed Plan upon approval shall become the Annual Plan.
 
(b)           Dispute Concerning an Annual Budget.  If, prior to the
commencement of any fiscal year, the Executive Committee has disapproved the
Proposed Plan because it could not reach an agreement as to the amount to be
allocated to any budget line item set forth in the Annual Budget portion of the
Proposed Plan for such fiscal year, then (i) as to any such disputed budget line
item, the Annual Budget portion of the Annual Plan for the immediately preceding
fiscal year (exclusive of any non-recurring capital expenditures) shall be
controlling but only with respect to such disputed budget line item (in each
case adjusted to reflect the increases in the CPI for November of such fiscal
year over the CPI for November of such immediately preceding fiscal year) and
only until such time as the Executive Committee has approved the amount to be
allocated to such budget line item, and (ii) as to any budget line item or items
that are not in dispute, the Annual Budget portion of the Proposed Plan shall
control.
 
(c)           Amendments to Annual Plans.  If in any Partner’s judgment an
Annual Plan requires amendment, such Partner shall deliver to the Executive
Committee a written notice setting forth the proposed amendment to the Annual
Plan and the basis therefor.  The Executive Committee shall approve or
disapprove, in accordance with Section 3.4 hereof, such proposed amendment
within ten (10) Business Days after receipt thereof, and, if the Executive
Committee shall approve such proposed amendment (any such amendment, a “Plan
 

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Amendment”), the Annual Plan (including, without limitation any amendments to
the Annual Budget portion thereof) shall be amended by the Plan Amendment as set
forth in the written notice described in the preceding sentence.  If the
Executive Committee shall disapprove a Plan Amendment, then the Annual Plan then
in effect shall not be amended pursuant to such disapproved Plan Amendment.
 
Section 3.6              Qualified Asset Acquisitions. 
 
(a)           Generally; Approval by Executive Committee.  During the
Acquisition Period, LMLP GP shall identify net-leased assets that meet the
Acquisition Parameters as candidates for acquisition, directly or indirectly, by
the Partnership (any such asset, a “Proposed Qualified Asset”).  LMLP GP or
Asset Manager shall submit the Acquisition Memorandum described in
Section 3.6(b) hereof with respect to the Proposed Qualified Asset or a
Non-Parameter Asset that LMLP GP recommends for acquisition by the Partnership
to the Executive Committee.  The Executive Committee shall have seven (7)
Business Days after its receipt of the Acquisition Memorandum to approve or
disapprove of the acquisition of a Proposed Qualified Asset or Non-Parameter
Asset in accordance with Section 3.4 hereof.
 
(b)           Acquisition Memorandum.  For each Proposed Qualified Asset and
Non-Parameter Asset, LMLP GP or Asset Manager shall deliver to the Executive
Committee an Acquisition Memorandum describing such Proposed Qualified Asset or
Non-Parameter Asset in reasonable detail, including without limitation:
 
(i)                 whether it is a Proposed Qualified Asset or a Non-Parameter
Asset;
 
(ii)                the size and location thereof;
 
(iii)               the improvements thereon;
 
(iv)               the operating history, if any, financial status and financial
projections (for a minimum of five (5) years, including any anticipated
expenditures or allowances) thereof;
 
(v)                market data, including rental and sales comparables and
competitive submarket survey, if necessary;
 
(vi)               the material findings of all due diligence undertaken to date
with respect thereto, if any, including a summary of any litigation involving
the Proposed Qualified Asset or Non-Parameter Asset and the material findings to
date of any Environmental Assessment and/or Physical Inspection Report;
 
(vii)              photographs and site plans;
 
(viii)             the estimated cost to the Partnership, including the
estimated purchase price and estimated due diligence costs, the amount and
material terms of any mortgage indebtedness to be assumed, incurred or taken
subject to;
 

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(ix)               the material provisions of the net lease or leases thereon
and copies of such leases (or in the case of proposed leases, drafts or
reasonably detailed abstracts of proposed leases);
 
(x)                the identification of each tenant and financial information
relating to each such tenant;
 
(xi)               such other information and documentation any member of the
Executive Committee may reasonably request and is reasonably available,
including the purchase and sale agreement and loan documents.
 
(c)           Assets Which Do Not Comply With Acquisition Parameters.  LMLP GP
may submit net-leased assets that do not comply in all respects with the
Acquisition Parameters (each, a “Non-Parameter Asset”) to the Executive
Committee for approval pursuant to Section 3.6(a) hereof.
 
(d)           Acquisition of Approved Qualified Assets.  Upon receipt of the
written approval of a majority of the members of the Executive Committee as
provided in Section 3.6(a) above of the acquisition by the Partnership of a
Proposed Qualified Asset or Non-Parameter Asset (any Proposed Qualified Asset or
Non-Parameter Asset so approved, an “Approved Qualified Asset”), LMLP GP or
Asset Manager shall take all commercially reasonable efforts on behalf of the
Partnership to negotiate and execute all documents necessary to acquire the
Approved Qualified Asset pursuant to and in accordance with the terms approved
by the Partners (including formation of an SP Subsidiary, if applicable) and to
complete due diligence that the General Partner deems reasonably necessary,
including (to the extent not already completed) obtaining an Environmental
Assessment and a Physical Inspection Report.  LMLP GP or Asset Manager shall
keep the Executive Committee reasonably informed of the progress of the
Partnership’s acquisition of any Approved Qualified Asset, including the
material findings of all due diligence and of any material matters that arise
during the course thereof.  Upon completion of all due diligence undertaken as
specified above with respect to an Approved Qualified Asset and as a condition
to completing the acquisition of the Approved Qualified Asset, LMLP GP or Asset
Manager shall deliver to the Executive Committee a memorandum summarizing the
material findings of the completed due diligence and any changes in the status
of such Approved Qualified Asset since the date of the Acquisition Memorandum
described in Section 3.6(b) above and the Executive Committee, in accordance
with Section 3.4 hereof, shall confirm its continuing approval of the
acquisition before LMLP GP commits (on a nonrefundable basis) the Partnership’s
funds as provided below.  Upon request by any member of the Executive Committee,
LMLP GP or Asset Manager will provide to the Executive Committee copies of the
Environmental Assessment, the Physical Inspection Report and the survey after
completion thereof.
 
It is understood and agreed that (x) LMLP GP may deposit its own funds, or cause
the Partnership to deposit Partnership funds, as refundable earnest money, and
(y) the Partnership’s funds shall be substituted (and such funds reimbursed to
LMLP GP) or committed, as the case may be, on a nonrefundable basis only after
due diligence is completed and the Executive Committee has confirmed its
continuing approval of the acquisition.  After the Partnership has committed its
funds on a nonrefundable basis in
 

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accordance with the prior sentence, if the terms of the acquisition change in
any material respect from the terms described in the Acquisition Memorandum,
such change shall require the consent of a majority of the members of the
Executive Committee.
 
An acquisition of a Approved Qualified Asset shall be made through SP
Subsidiaries utilizing the SP Subsidiary Agreements.
 
Within five (5) Business Days after the closing of the acquisition of an
Approved Qualified Asset, LMLP GP shall deliver to the Partners a closing
statement acknowledging the receipt of and setting forth the application of the
Partners’ Capital Contributions and any other funds of the Partnership used to
acquire such Approved Qualified Asset or to pay closing costs (including an
estimate of costs not finalized at closing, including legal fees and costs)
associated therewith.
 
(e)           Disapproved Qualified Assets.  If the Executive Committee (x)
disapproves any Proposed Qualified Asset or any proposed Non-Parameter Asset,
(y) fails after the completion of due diligence to confirm its continuing
approval of the acquisition of an Approved Qualified Asset as provided in
Section 3.6(d) above, or (z) otherwise withdraws its approval of an Approved
Qualified Asset as provided in Section 3.6(d) above, LMLP GP shall not cause or
permit the Partnership to acquire such Proposed Qualified Asset, proposed
Non-Parameter Asset or Approved Qualified Asset and the LMLP Partners or their
designee shall have the right to acquire such Proposed Qualified Asset, proposed
Non-Parameter Asset or Approved Qualified Asset for their own account or with or
in connection with any other Person; provided that such right shall not apply if
the members of the Executive Committee appointed by Inland vote to approve the
acquisition in accordance with Section 3.4 hereof.
 
(f)           Acquisition Costs.  Except as provided in this Section 3.6(f) and
in Section 3.6(g) hereof, LMLP GP or the Asset Manager (as the case may be)
shall be liable for all costs and expenses (“Acquisition Costs”) arising in
connection with the identification or evaluation of, the bidding on and the
structuring and negotiation of and contracting for the acquisition or attempted
acquisition of, and the due diligence undertaken in connection with, any
Proposed Qualified Asset or Approved Qualified Asset (such activities, the
“Acquisition Activities”); provided that:
 
(i)                 the Partnership shall (x) reimburse LMLP GP or the Asset
Manager (as the case may be) for all Acquisition Costs and (y) be liable for all
reasonable and customary costs and expenses of Third Parties retained in
connection with the Acquisition Activities related to Approved Qualified Assets;
 
(ii)                the Partnership shall reimburse LMLP GP or the Asset Manager
(as the case may be) for 60% of the Acquisition Costs in connection with
Acquisition Activities related to Proposed Qualified Assets and Approved
Qualified Assets that are disapproved by the Executive Committee;
 
Notwithstanding the foregoing, but subject to Section 3.9 hereof, if for any
reason other than pursuant to Article XI hereof any LMLP Affiliated Party
(instead of the Partnership or an SP Subsidiary) acquires title to any Proposed
Qualified Asset or Approved
 

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Qualified Asset, LMLP shall pay all of the costs and expenses (and reimburse the
Partnership for any refundable or nonrefundable deposits funded by the
Partnership in connection with the acquisition of such asset) incurred or to be
incurred in connection with the Acquisition Activities relating to such Proposed
Qualified Asset or Approved Qualified Asset.
 
(g)           Acquisition Fee.  Upon the acquisition of any Approved Qualified
Asset by the Partnership or by an SP Subsidiary (including any Approved
Qualified Asset contributed in whole or in part by LMLP to the Partnership),
pursuant to this Section 3.6, Inland shall pay LMLP GP or the Asset Manager an
acquisition fee (the “Acquisition Fee”) equal to the sum of the gross purchase
price of such acquired Approved Qualified Asset multiplied by 0.425%.
 
For example, if the purchase price of such acquired Approved Qualified Asset
were $25 million, Inland’s Acquisition Fee would equal $106,250.
 
Section 3.7             Sale of Qualified Assets.
 
(a)           Authority to Sell.  Subject to Article XI, the General Partner
shall have no authority to and shall not initiate the sale of any Qualified
Asset without approval by the Executive Committee in accordance with Section 3.4
of this Agreement.
 
(b)           Assets in Foreclosure.  In the event a lender to the Partnership
or a SP Subsidiary has initiated or threatens to initiate a foreclosure
proceeding with respect to any Qualified Asset securing such lender’s loan to
the Partnership or such SP Subsidiary, and a Partner disagrees as to whether
such Qualified Asset shall be transferred to the lender in satisfaction of such
loan, the Partner not in favor of such transfer shall have the right to purchase
such Qualified Asset from the Partnership for One Dollar ($1.00) provided such
Partner assumes such loan in full and such lender releases the Partnership and
any guarantors therefrom.  No adjustments to the Capital Contributions, Capital
Commitments, or Capital Account shall be made on account of a transfer made in
accordance with this Section 3.7(b).
 
Section 3.8             Partnership Indebtedness.
 
(a)           Maximum Debt.  The Partnership on a consolidated basis with the SP
Subsidiaries shall maintain a total debt (secured or unsecured) of not greater
than seventy-five percent (75%) of the gross acquisition cost of the
Partnership’s Qualified Assets; provided, that the gross acquisition cost of a
Qualified Assumed Asset shall include the refinancing costs (including
defeasance costs and prepayment costs) related to the Qualified Assumed
Asset.  The total debt secured by any Qualified Asset shall not exceed 75% of
the gross acquisition cost of such Qualified Asset; provided, that the gross
acquisition cost of a Qualified Assumed Asset shall include the refinancing
costs (including defeasance costs and prepayment costs) related to the Qualified
Assumed Asset.
 
(b)           Non-Recourse to the Partners.  Notwithstanding anything to the
contrary contained in this Agreement, the Partnership shall not incur debt that
is recourse to the Partners, and the Partners shall not be liable for any debts
or other obligations or liabilities incurred by the Partnership; provided, that,
if a lender will not accept the Partnership as a
 

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guarantor for “non-recourse carve-outs,” LMLP shall provide such “non-recourse
carve-out” guarantee.
 
(c)           Cross-Default Provisions.  Unless approved by a Supermajority Vote
of the Executive Committee, the Partnership shall not incur any indebtedness
that contains cross-default provisions, except for cross-default provisions
under the Existing Indebtedness and any financing the Partnership shall obtain
pursuant to Sections 3.8 (e) and (f) hereof.
 
(d)           Loan Terms.  The Partnership shall endeavor to procure
indebtedness, the terms of which will:
 
(i)           not prohibit the replacement of the General Partner or the Asset
Manager with a Person, including an Affiliate of Inland, so long as such Person
meets the standards of the commercial mortgage backed securities market; and
 
(ii)           not prohibit transfers pursuant to Articles VIII or XI hereof;
 
in each case without triggering the due on sale provision, a prepayment penalty
or an assumption fee (other than administrative fees and other nominal lender
fees, including legal costs).
 
(e)           Restriction on Indebtedness.  Notwithstanding anything in this
Agreement to the contrary, but subject to Sections 3.8(a), (b), (c) and (d), so
long as any Preferred Equity is outstanding, the Partnership shall be prohibited
from refinancing any Qualified Assumed Asset with allocated Preferred Equity
without the prior written consent of LMLP; provided that the Partnership shall,
without the approval of LMLP, be permitted to obtain a loan or loans to
refinance any such Qualified Assumed Assets if (i) the annual total debt service
payments required to be paid on such loan or loans is equal to or less than the
payments that the Partnership is otherwise required to make on any Existing
Indebtedness and any other indebtedness related to such Qualified Assumed Assets
and the Preferred Equity being redeemed with the proceeds of such loan or loans,
(ii) a portion of the proceeds of such loan or loans will be used to
sufficiently redeem the Preferred Equity Redemption Amount related to such
Qualified Assumed Asset in accordance with Section 7.1(a)(ii) hereof, (iii) such
loan or loans are on commercially reasonable terms and (iv) LMLP is provided
with 10 Business Days advance notice of the terms of each such loan or loans.
 
(f)           Qualified Assumed Asset Debt Placement.  Notwithstanding anything
in this Agreement to the contrary, but subject to Sections 3.8(a), (b), (c) and
(d), LMLP GP or LMLP is hereby authorized to obtain a loan or loans on behalf of
the Partnership or an SP Subsidiary to refinance any or all of the Qualified
Assumed Assets with allocated Preferred Equity, without the approval of the
Executive Committee or the consent of Inland, so long as (i) the annual total
debt service payments required to be paid on such loan or loans is equal to or
less than the payments that the Partnership is otherwise required to make on any
Existing Indebtedness and any other indebtedness related to such Qualified
Assumed Assets and the Preferred Equity being redeemed with the proceeds of such
loan or loans, (ii) a portion of
 

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the proceeds of such loan or loans will be used to redeem the Preferred Equity
Redemption Amount related to such Qualified Assumed Asset in accordance with
Section 7.1(a)(ii) hereof, (iii) such loan or loans are on commercially
reasonable terms and (iv) Inland is provided with 10 Business Days advance
notice of the terms of each such loan or loans.
 
(g)           Future Debt Placement.  For any future debt financings, the
Partnership shall give each of Inland Mortgage Brokerage Corporation and Concord
Debt Holdings LLC the opportunity to bid to place or originate such debt
financing, but the Partnership shall not be obligated to use either Inland
Mortgage Brokerage Corporation or Concord Debt Holdings LLC for any future debt
financing.
 
Section 3.9             Business Opportunity.
 
(a)           LMLP.
 
(i)                 General. Each LMLP Affiliated Party may each engage in or
possess any interest in other business ventures of any kind, independently or
with others, including but not limited to the ownership, operation and
management of net-leased real estate assets, except as provided in this Section
3.9(a).
 
(ii)                 Exclusivity. During the Acquisition Period and except as
provided in Section 3.9(iii) hereof or with respect to obligations to the
existing joint ventures set forth on Schedule 3.9 hereto, (a) the LMLP
Affiliated Parties shall not acquire, or earn any incentive fee for the
management or leasing of, any net-leased assets which satisfy or comply with all
of the “Acquisition Parameters,” and (b) LMLP GP shall make available for
purchase by the Partnership, and the Partnership shall have the right to
purchase pursuant to Section 3.6 hereof, all net-leased assets offered to or
discovered by the LMLP Affiliated Parties which satisfy or comply with all of
the “Required Parameters” comprising the Acquisition Parameters (collectively,
the “Exclusivity Right”).
 
(iii)                 Acquisition by LMLP Affiliated Parties. Notwithstanding
anything to the contrary contained in this Agreement, any LMLP Affiliated Party
may acquire (A) the assets LMLP GP is required to offer to the Partnership in
accordance with this Section 3.9(a) only (1) if the asset is owned by an LMLP
Affiliated Party or related (through adjacent or common ownership or constitutes
land or other assets underlying or constituting part of an asset owned by an
LMLP Affiliated Party) to an asset owned by an LMLP Affiliated Party, (2) if the
seller will accept only O.P. Units in exchange therefor, (3) if any LMLP
Affiliated Party is required to offer the asset pursuant to an existing joint
venture arrangement, or (4) after the Executive Committee (including at least
one (1) of the two (2) members appointed by Inland) has disapproved such
acquisition as provided in Section 3.4 hereof and (B) assets that it is not
required to offer to the Partnership under this Section 3.9(a).
 
(iv)                 Termination of Exclusivity Right. Notwithstanding anything
to the contrary contained in this Agreement, the Exclusivity Right and the
provisions of this Section 3.9(a) shall terminate on the earlier of (A) the
expiration of the Acquisition Period and (B) at such time as the Executive
Committee (including at least one (1) of the two (2) members appointed by
Inland) disapproves, within any consecutive twelve (12) month period,
 

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 the lesser of (x) four (4) Proposed Qualified Assets or Approved Qualified
Assets pursuant to this Agreement and (x) the number (but in no event less than
three (3)) of Proposed Qualified Assets and Approved Qualified Assets requiring
an equity investment by the Partnership of at least $100,000,000.00 assuming 70%
debt to the proposed purchase price.
 
(v)                 LMLP Existing Joint Ventures. From time to time, upon
reasonable written request from Inland, the LMLP Partners shall provide a
schedule of the LMLP Affiliated Parties’ existing joint ventures’ respective
investment criteria and exclusivity terms.  A current list the LMLP Affiliated
Parties’ existing joint ventures’ respective investment criteria and exclusivity
terms is set forth on Schedule 3.9 hereto.
 
(vi)                 LMLP Restrictions.
 
(A)                                The LMLP Partners shall cause the LMLP
Affiliated Parties not to directly or indirectly solicit or otherwise attempt to
persuade any tenant of any Qualified Asset to vacate the Qualified Asset to
purchase, or relocate to, another asset that is not a Qualified Asset.
 
(B)                                LMLP and its Affiliates shall not
discriminate against any Qualified Asset when making a proposal to any existing
or prospective tenant in connection with the leasing of available space.
 
(C)                                In the event that an LMLP Affiliated Party
leases space to a then tenant of a Qualified Asset, LMLP GP, so long as it is
the General Partner, shall provide written notice to Inland of such leasing
activity.
 
(b)           Inland.  Inland and any of its Affiliates and related parties may
engage in or possess any interest in other business ventures of any kind,
independently or with others, including but not limited to the ownership,
operation and management of net-leased real estate asset.
 
(c)           Duties and Conflicts.  Subject to LMLP GP’s obligation to present
net-leased real estate assets to the Partnership pursuant to Section 3.6 and
Section 3.9(a) hereof, each Partner recognizes that the other Partners and their
Affiliates have or may have other business interests, activities and
investments, some of which may be in conflict or competition with the business
of the Partnership, and that such Persons are entitled to carry on such other
business interests, activities and investments.  The Partners and their
Affiliates may engage in or possess an interest in any other business or venture
of any kind, independently or with others, on their own behalf or on behalf of
other entities with which they are affiliated or associated, and such Persons
may engage in any activities, whether or not competitive with the Partnership,
without any obligation (except as expressed in Sections 3.6 and 3.9(a)) to offer
any interest in such activities to the Partnership or to any Partner.  Except as
provided in Sections 3.6 or 3.9(a), neither the Partnership nor any Partner
shall have any right, by virtue of this Agreement, in such activities, or the
income or profits derived therefrom, and the pursuit of such activities, even if
competitive with the business of the Partnership, shall not be deemed wrongful
or improper.
 

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Section 3.10           Payments to the Asset Manager of the General Partner.
 
(a)           Property Management Fee.  The General Partner shall cause the
Partnership to pay to the Asset Manager (or its designee) pursuant to the
Management Agreement an annual Property Management Fee (“Property Management
Fee”) equal to the sum of (x) three percent (3%) of actual gross revenues for
the fiscal year (or applicable portion thereof) derived from Qualified Assets
encumbered by leases that provide for full recovery of the Property Management
Fee from the tenant (“Gross Revenues”), plus (y) on Qualified Assets where the
leases do not provide for full recovery of the Property Management Fee from the
tenant, the amount recoverable for the fiscal year (or applicable portion
thereof) from the tenants of such Qualified Assets for property management
expenses under such leases (“Recoverable Amounts”), payable monthly.
 
(b)           Partnership Management Fee.  The General Partner shall cause the
Partnership to pay to the Asset Manager pursuant to the Management Agreement an
annual Partnership Management Fee (“Partnership Management Fee”) equal to (x) so
long as LMLP GP is the General Partner, Inland’s Percentage Interest multiplied
by three hundred seventy five thousandths of a percent (0.375%) of the Equity
Capital for a fiscal year (pro rated for partial years), or (y) so long as LMLP
GP is no longer the General Partner, three hundred seventy five thousandths of a
percent (0.375%) of the Equity Capital for a fiscal year (pro rated for partial
years), in either case payable monthly and adjusted as provided herein.  Within
thirty (30) days of the Partnership’s receipt of the annual reports described in
Section 4.3 hereof for a fiscal year, the Asset Manager shall provide to the
Partners a written statement of reconciliation (which the Partners shall have
the right to contest) setting forth (x) the Equity Capital for such fiscal year
(or partial year) and the Partnership Management Fee payable to the Asset
Manager in connection therewith, pursuant to this Agreement, (y) the Partnership
Management Fee already paid by the Partnership to the Asset Manager during such
fiscal year (or partial year), and (z) either the amount owed to the Asset
Manager by the Partnership (which shall be the excess, if any, of the
Partnership Management Fee payable to the Asset Manager for such fiscal year (or
partial year) pursuant to this Agreement over the Partnership Management Fee
actually paid by the Partnership to the Asset Manager for such fiscal year (or
partial year)) or the amount owed to the Partnership by the Asset Manager (which
shall be the excess, if any, of the Partnership Management Fee actually paid by
the Partnership to the Asset Manager for such fiscal year (or partial year) over
the Partnership Management Fee payable to the Asset Manager for such fiscal year
pursuant to this Agreement).  The Asset Manager or the Partnership, as the case
may be, shall pay to the other the amount owed pursuant to clause (z) above
within five (5) Business Days of the receipt by the Partners of the written
statement of reconciliation described in this Section 3.10(b).
 
In addition, a credit in an amount equal to three hundred seventy five
thousandths of a percent (0.375%) of the Equity Capital for a fiscal year (pro
rated for partial years), less the Partnership Management Fee, as adjusted above
(or the applicable portion thereof), shall accrue and be reserved on the
Partnership books until a Capital Call is made by the General Partner in
accordance with Section 5.1(b) hereof, whereupon the amount of the credit shall
be applied, in whole or in part, to the extent necessary to fund LMLP’s pro rata
shares of such Capital Call and will be treated for purposes of this Agreement
as if each pro rata share of
 

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such amount were an actual Capital Contribution made by the respective LMLP
Partner which (1) reduces the respective aggregate Capital Commitment of each
LMLP Partner and (2) gives rise to an entitlement to allocations (but only out
of subsequent Profits), and related distributions, in amounts that reflect the
amounts that would have been allocated and distributed if such notional capital
contributions had constituted actual Capital Contributions, including a return
of such notional capital contributions to LMLP pursuant to Section 7.1 hereof.
 
(c)           Acquisition Fees.  Inland shall pay the Acquisition Fees in
accordance with the provisions of Section 3.6(g).
 
Section 3.11           Exculpation.
 
(a)           LMLP.  No LMLP Affiliated Party nor or any officer, director,
trustee, shareholder, member, manager, partner, employee, Affiliate or agent of
any LMLP Affiliated Party shall be liable, responsible or accountable in damages
or otherwise to the Partnership or any other Partner for any act or omission on
behalf of the Partnership, in good faith and within the scope of the authority
conferred on LMLP GP as General Partner under this Agreement or otherwise under
this Agreement or the Asset Manager, as the case may be, or by law unless such
act or failure to act (i) is or results in a breach of any representation,
warranty or covenant of any LMLP Partner contained in this Agreement or any
other agreement entered into in connection therewith or related thereto,
(ii) was fraudulent or committed in bad faith or (iii) constituted gross
negligence, willful misconduct or a breach of fiduciary duty.
 
(b)           Inland.  None of Inland, or any officer, director, trustee,
shareholder, member, manager, partner, employee, Affiliate or agent of Inland,
or any Affiliate of Inland shall be liable, responsible or accountable in
damages or otherwise to the Partnership or to any other Partner for any act or
omission on behalf of the Partnership, in good faith and within the scope of
authority conferred on Inland under this Agreement or by law unless such act or
failure to act (i) is or results in a breach of any representation, warranty or
covenant of Inland contained in this Agreement or any other agreement entered
into in connection therewith or related thereto, (ii) was fraudulent or
committed in bad faith or (iii) constituted gross negligence, willful misconduct
or a breach of fiduciary duty.
 
(c)           Survival.  The provisions of this Section 3.12 shall survive any
termination of the Partnership or this Agreement.
 
Section 3.12           Indemnification.
 
(a)           By the Partnership.  The Partnership shall indemnify, defend and
hold harmless any Person (an “Indemnified Party”) who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of any act or omission or alleged act or omission arising out of such
Indemnified Party’s activities as (i) a Partner or an officer, director,
trustee, shareholder, member, manager, partner, employee, Affiliate or agent of
the Partner, (ii) the General Partner or the Asset Manager or an officer,
director, trustee, shareholder, member, manager, partner, employee, Affiliate or
agent of any of them on behalf of the Partnership or in furtherance of the
interest of the Partnership, or (iii) LMLP or any LMLP

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Affiliated Party, but only if LMLP GP is no longer the General Partner, that is
obligated to enter into a direct financial obligation (including, without
limitation, a “non-recourse carve-out” guarantee) in connection with the
financing of any Qualified Asset, in each case against personal liability,
claims, losses, damages and expenses for which such Indemnified Party has not
been reimbursed by insurance proceeds or otherwise (including reasonable
attorneys’ fees, judgments, fines and amounts paid in settlement) actually and
reasonably incurred by such Indemnified Party in connection with such action,
suit or proceeding and any appeal therefrom, unless such Indemnified Party
(A) acted fraudulently, in bad faith or with gross negligence or willful
misconduct or (B) by such act or failure to act breached any representation,
warranty or covenant contained in this Agreement, which breach had or has a
material adverse effect on the Partnership or any Partner and, if capable of
cure, is not cured within fifteen (15) days after notice thereof by the
aggrieved Partner(s).  Any indemnity by the Partnership under this Agreement
shall be provided out of, and to the extent of, Partnership revenues and assets
only, and no Partner shall have any personal liability on account thereof.  The
indemnification provided under this Section 3.12 shall (x) be in addition to,
and shall not limit or diminish, the coverage of the Partners or any Affiliates
under any insurance maintained by the Partnership and (y) apply to any legal
action, suit or proceeding commenced by a Partner or in the right of a Partner
or the Partnership.  The indemnification provided under this Section 3.12 shall
be a contract right and shall include the right to be reimbursed for reasonable
expenses incurred by any such Indemnified Party within thirty (30) days after
such expenses are incurred.
 
(b)           By the LMLP Partners.  The LMLP Partners, so long as LMLP GP is
the General Partner, shall indemnify and hold harmless Inland and any Affiliate
and related party or agent thereof from and against any liabilities, claims,
losses, damages and expenses incurred by any such person (including reasonable
attorneys’ fees, judgments, fines and amounts paid in settlement) as a result of
any act or omission by any LMLP Affiliated Party which (i) constitutes or
results in a breach of any representation, warranty or covenant of any LMLP
Partner contained in this Agreement or any other agreement entered into in
connection herewith or related hereto, (ii) was performed or omitted
fraudulently or in bad faith or (iii) constituted gross negligence, willful
misconduct or breach of fiduciary duty.
 
(c)           By Inland.  Inland, so long as LMLP GP is no longer the General
Partner, shall indemnify and hold harmless the LMLP Affiliated Parties or agent
thereof from and against any liabilities, claims, losses, damages and expenses
incurred by any such person (including reasonable attorneys’ fees, judgments,
fines and amounts paid in settlement) as a result of any act or omission by
Inland or any successor General Partner which (i) constitutes or results in a
breach of any representation, warranty or covenant of Inland or any successor
General Partner contained in this Agreement or any other agreement entered into
in connection herewith or related hereto, (ii) was performed or omitted
fraudulently or in bad faith or (iii) constituted gross negligence, willful
misconduct or breach of fiduciary duty.
 
ARTICLE IV
BOOKS AND RECORDS; REPORTS TO PARTNERS
 
Section 4.1            Books.  The General Partner shall maintain or cause to be
maintained separate, full and accurate books and records of the Partnership, and
any Partner or any authorized representative of any Partner, shall have the
right to inspect, examine
 

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and copy the same and to meet with employees of the General Partner responsible
for preparing the same at reasonable times during business hours and upon
reasonable notice.  All policies of the Partnership with respect to the
maintenance of such books and records shall be subject to approval by all of the
Partners.

 

Section 4.2             Monthly and Quarterly Reports.
 
(a)           Monthly Reports.  The General Partner shall prepare and distribute
to Inland within twenty (20) days after the last day of each month a report with
respect to the Partnership, which shall include (i) unaudited financial
statements, consisting of at least an operating statement for the monthly period
and year-to-date showing variances from the Annual Budget portion of the Annual
Plan and (ii) a schedule of aged accounts receivable and accounts payable.
Variances from any line item in the Annual Budget exceeding the greater of One
Hundred Thousand Dollars ($100,000) and ten percent (10%) of the amount
allocated to such budget line item through the end of such month shall be
explained in writing, unless already approved by the Executive Committee
pursuant to Section 3.4 hereof.
 
(b)           Quarterly Reports.  The General Partner shall, no later than the
thirtieth (30th) day after the end of each fiscal quarter, prepare and
distribute:
 
(i)                 a year-to-date consolidated report with respect to the
Partnership (with the last month of each such report comprised of forecasted,
rather than actual, results), prepared in accordance with generally accepted
accounting principles, consistently applied, including (a) a balance sheet, (b)
a profit and loss statement, (c) a statement of changes in the Partners’ Capital
Accounts, (d) a report briefly describing each variance from the applicable
budget line item in the consolidated Annual Budget portion of the Annual Plan
exceeding the greater of One Hundred Thousand Dollars ($100,000) and ten percent
(10%) of the amount allocated to such budget line item through the date of such
report, and (e) calculations in sufficient  detail to verify the accuracy of all
fees and other amounts paid or payable to the Asset  Manager under the
Management Agreement;
 
(ii)                 a report with respect to each Qualified Asset, including an
operating statement for the quarter and year-to-date showing each variance from
the budget line items in the Annual Budget portion of the Annual  Plan, and a
narrative describing material changes in property operations, physical
condition, capital expenditures and leasing and occupancy; and
 
(iii)                 so long as LMLP GP is the General Partner, such other
reports, statements and information regarding the Partnership and Qualified
Assets as Inland may reasonably request from time to time.

Section 4.3            Annual Reports.  The General Partner shall prepare and
distribute to Inland within (x) forty-five (45) days after the end of each
fiscal year draft unaudited financial statements with respect to the
Partnership, and (y) within seventy-five (75) days after the end of each fiscal
year audited financial statements with respect to the Partnership.  Such
financial statements shall be prepared in accordance with generally accepted
accounting principles, consistently applied, and shall be audited at the
Partnership’s expense by

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such nationally recognized firm of independent certified public accountants
approved by the Executive Committee as provided in Section 3.4 hereof.  All
reports delivered pursuant to this Section 4.3 shall also include unaudited
calculations in sufficient detail to verify the accuracy of all distributions
paid by the Partnership.
 
Section 4.4            Accountants; Tax Returns.  The General Partner shall also
engage such nationally recognized firm of independent certified public
accountants approved by the Executive Committee as provided in Section 3.4
hereof to review, or to sign as preparer, all federal, state and local tax
returns which the Partnership is required to file.  The General Partner will
furnish to each Partner within one hundred twenty (120) days after the end of
each calendar year, or as soon thereafter as is practicable, a Schedule K-1 or
such other statement as is required by the Internal Revenue Service which sets
forth such Partner’s share of the profits or losses and other relevant fiscal
items of the Partnership for such fiscal year.  If requested by a Partner, the
General Partner shall deliver to such Partner copies of any federal, state and
local income tax returns and information returns which the Partnership is
required to file.
 
Section 4.5             Accounting and Fiscal Year.  The General Partner shall
keep the Partnership books and records on the accrual basis.  The fiscal year of
the Partnership shall end on December 31.
 
Section 4.6             Partnership Funds.
 
(a)           Generally.  The funds of the Partnership shall be deposited into
such account or accounts as are designated by the General Partner.  All
withdrawals from or charges against such accounts shall be made by the General
Partner or by those Persons designated from time to time by the General Partner.
 
(b)           Restrictions on Deposits.  Pending distribution or expenditure in
accordance with the terms of this Agreement, funds of the Partnership may be
invested, in the reasonable discretion of the General Partner, in United States
government obligations, insured obligations which are rated not lower than AA by
Standard & Poor’s or have a comparable rating from a nationally recognized
rating agency, collateralized bank time deposits, repurchase agreements, money
market funds, commercial paper which is rated not lower than P-1, certificates
of deposit which are rated not lower than AA by Standard & Poor’s or have a
comparable rating from a nationally recognized rating agency, banker’s
acceptances eligible for purchase by the Federal Reserve and bonds and other
evidences of indebtedness and preferred stock which are rated not lower than AA
by Standard & Poor’s or are of a comparable credit quality.

Section 4.7             Insurance.  The General Partner shall cause the tenant
or tenants of each Qualified Asset to maintain insurance thereon of such types
and in such amounts that are in accordance with the applicable lease.  Unless
otherwise determined by Supermajority Vote of the Executive Committee, the
General Partner shall cause the Partnership to obtain, at the Partnership’s
expense, such types and amounts of insurance that the tenant or tenants of any
Qualified Asset are not required to maintain and that are included within the

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insurance standards listed on Schedule 4.7 hereto, as may be revised from time
to time by a Supermajority Vote of the Executive Committee.
 
 
ARTICLE V
CONTRIBUTIONS
 
Section 5.1             Capital Contributions.
 
(a)           Generally; Percentage Interests.  LMLP shall make an Initial
Capital Contribution to the Partnership by contributing to the Partnership cash
in an amount set forth on Schedule 1 hereto and Contributed Assets pursuant to
the Contribution Agreement having a value set forth on Schedule 1 to the
Contribution Agreement.  Inland shall make an Initial Capital Contribution to
the Partnership by contributing to the Partnership cash in the amount set forth
on Schedule 1 hereto; provided, that (i) Inland shall receive a $250,000 credit
to be applied to its Initial Capital Contribution (from the first amounts
otherwise required to be contributed) as satisfaction of its underwriting fees
in connection with the formation of the Partnership, and (ii) Inland shall not
be required to make an Initial Capital Contribution in excess of $253,000,000,
less the designated amounts with respect to each Cap/Ex Lease Assumed Asset
(which shall not exceed $3,000,000) (the “Cap Ex/Lease Assumed Asset Amount”),
but only to the extent one or more of the Cap Ex/Lease Assumed Assets are
acquired .  Except as provided in this Section 5.1, (i) no Partner shall be
obligated to make any Additional Capital Contribution or Extraordinary Funding
to the Partnership and (ii) any Additional Capital Contribution or Extraordinary
Funding shall be made by the Partners in proportion to their respective
Percentage Interests as determined at the time of the Capital Call or
Extraordinary Call.  The Partners shall have the Percentage Interests in the
Partnership set forth opposite each Partner’s name on Schedule 1 hereto.
 
The aggregate Purchase Price for all of the Qualified Assumed Assets shall be
$940,000,000.00, subject to adjustment in accordance with the Contribution
Agreement, the Purchase Agreement and the Letter Agreement.  Subject to the
Contribution Agreement, the Purchase Agreement and the Letter Agreement, the
Qualified Assumed Assets shall be acquired by the Partnership, from time to
time, prior to March 1, 2008.  Simultaneously with the acquisition of a
Qualified Assumed Asset, (i) Inland shall make an attendant Initial Capital
Contribution in cash in an amount equal to the product of 0.85 multiplied by the
difference between (x) the Purchase Price (as adjusted pursuant to the
Contribution Agreement or the Purchase Agreement and the Letter Agreement) of
such Qualified Assumed Asset and (y) the principal balance of any mortgage
financing secured by such Qualified Assumed Asset and the amount of Preferred
Equity determined in accordance with the Letter Agreement; and (i) LMLP shall
make an attendant Initial Capital Contribution in cash or in Contributed Assets
in an amount  or having a value equal to the product of 0.15 multiplied by the
difference between the Purchase Price (as adjusted pursuant to the Contribution
Agreement or the Purchase Agreement and the Letter Agreement) of such Qualified
Assumed Asset less the principal balance of any mortgage financing secured by
such Qualified Assumed Asset and the amount of Preferred Equity determined in
accordance with the Letter Agreement.
 
In the event that by March 1, 2008 not all of the Qualified Assumed Assets have
been acquired by the Partnership and LMLP has made a Capital

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Contribution in excess of 15% of the aggregate Capital Contributions of the
Partners, then the General Partner shall cause the amount of LMLP's Capital
Contribution that is in excess of 15% of the aggregate Capital Contributions of
the Partners to accrue and be reserved on the Partnership’s books as a credit
toward satisfying LMLP’s share of any future Capital Call and such credit shall
be treated as if it were an actual Capital Contribution for purposes of
determining corresponding allocations and distributions.

(b)           Additional Capital Contributions.  In the event the Partnership
requires capital to acquire an Approved Qualified Asset during the Acquisition
Period, the General Partner shall be entitled to require, by written notice to
the Partners, an additional Capital Contribution (an “Additional Capital
Contribution”) from the Partners in an amount not in excess of the amount
necessary to acquire such Approved Qualified Asset plus all reasonable and
customary costs and expenses incurred by the Partnership in connection
therewith; provided that (x) each Partner shall be required to contribute the
amount determined by multiplying such Partner’s Percentage Interest by the
amount of such Additional Capital Contribution and (y) no Partner shall be
required to contribute the amount described in clause (x) above if such amount,
when added to the total of all of such Partner’s prior Capital Contributions,
exceeds such Partner’s Capital Commitment.  If the General Partner shall provide
to the Partners a written notice calling for an Additional Capital Contribution
(any such notice, a “Capital Call”) setting forth the total amount of such
Additional Capital Contribution, the amount of each Partner’s share of such
Additional Capital Contribution as determined pursuant to clause (x) above and
the due date on which the General Partner is requiring that such Additional
Capital Contribution be contributed to the Partnership, which due date shall be
at least ten (10) Business Days after the date on which the Partners actually
received the Capital Call and not more than one (1) Business Day prior to the
scheduled closing of the acquisition of such Approved Qualified Asset; each
Partner shall contribute its share of such Additional Capital Contribution in
immediately available funds on or before such due date.  If the acquisition of
an Approved Qualified Asset fails to close and the General Partner determines
there will not be a closing within fifteen (15) days of the date of the
originally scheduled closing, the General Partner (x) shall inform the Partners
of such failure and return each Partner’s share of the Additional Capital
Contribution made with respect thereto and (y) each Partner’s Capital
Contribution shall be restored to the level thereof immediately prior to such
Additional Capital Contribution.  If, at any time after the Partners have each
contributed their entire Capital Commitment, the Partners elect to contribute
additional capital, the Partners shall contribute such additional capital in
accordance with their respective Percentage Interests.
 
(c)           Extraordinary Fundings.  In the event the Partnership requires
additional funds to cover any costs and expenses for which the Partnership has
insufficient funds, including tenant improvements and capital expenditures, the
General Partner may make a written request therefor (any such request, an
“Extraordinary Call”) setting forth the amount requested and the due date
therefor, which due date shall be at least ten (10) Business Days after the date
on which the Partners actually received the Extraordinary Call; provided that
(i) any amount requested shall not exceed 5% of the Purchase Price of the
Qualified Asset if such funds are to be used for a specific Qualified Asset or
(ii) the aggregate of all amounts requested shall not exceed $20,000,000 if such
funds are to be used for the Partnership generally (such amount, the
“Extraordinary Call Cap”); provided further that no Partner shall be required to
contribute any capital to the Partnership in excess of such Partner’s Capital
Commitment.  Each
 

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Partner shall be required to fund an amount equal to the amount determined by
multiplying such Partner’s Percentage Interest by the amount set forth in such
approved Extraordinary Call (each such Extraordinary Call required to be funded
hereunder, an “Extraordinary Funding”).  Each Extraordinary Funding shall be
made as a supplementary capital contribution by the Partners to the Partnership
(any such contribution, an “Extraordinary Capital Contribution”). Each Partner
shall contribute its share of such Extraordinary Capital Contribution in
immediately available funds on or before the due date in the Extraordinary Call.
 
(d)           Failure to Fund an Additional Capital Contribution or
Extraordinary Funding.  If any Partner (a “Defaulting Partner”) fails to make
any Additional Capital Contribution or Extraordinary Funding which it is
required to make under this Section 5.1 by the due date therefor, then any
non-defaulting Partner shall not be permitted to make such Additional Capital
Contribution or Extraordinary Funding, but may, at its election, make a loan to
the Partnership (a “Priority Loan”) in an amount equal to the amount that
Additional Capital Contribution or Extraordinary Funding required.  Upon
election to make a Priority Loan, (i) the non-defaulting Partner shall loan to
the Partnership the amount of the Defaulting Partner’s share of the Additional
Capital Contribution or Extraordinary Funding, as the case may be, as determined
in accordance with Section 5.1(b) or Section 5.1(c), as the case may be, (ii)
such Priority Loan shall bear interest at a rate of 18% per annum cumulative
compounded from the date such Priority Loan is made, (iii) the Annual Budget
portion of the Annual Plan shall be amended to reflect such Priority Loan, and
(iv) such Priority Loan (including interest accrued thereon) shall be repaid
from Net Cash Flow from Operations or Net Cash from Sales or Refinancing prior
to any distribution.
 
Section 5.2            Preferred Equity Capital Contribution.  Upon the
acquisition of a Qualified Assumed Asset and subject to Section 3.8(a), LMLP
shall make a Preferred Equity Capital Contribution in an amount determined in
accordance with this Agreement and the Letter Agreement; provided that the
aggregate Preferred Equity Capital Contribution shall not exceed
$216,248,000.00.  The Preferred Equity shall be redeemed by the Partnership (i)
in accordance with Section 7.1(a)(ii) and Section 11.3(g) hereof and (ii) at the
election of either the Partnership or LMLP, if any Preferred Equity remains
outstanding on the tenth anniversary of the date first set forth above, on the
tenth anniversary of the date first set forth above in full together with all
accrued and unpaid Preferred Equity Return.  The General Partner shall update
Schedule 1 hereto to reflect the Preferred Equity Capital Contribution and any
redemption of Preferred Equity pursuant to this Section 5.2 or Section 7.1
hereof.  
 
Section 5.3            Return of Capital Contribution.  Except as otherwise
expressly provided in this Agreement, (a) the Capital Contribution of a Partner
will be returned to that Partner only in the manner and to the extent provided
in Article VII and Article IX hereof and (b) no Partner shall have any right to
demand or receive the return of its Capital Contribution.  In the event the
Partnership is required or compelled to return any Capital Contribution, no
Partner shall have the right to receive assets other than cash.  No Partner
shall be entitled to interest on its Capital Contribution or Capital Account
notwithstanding any disproportion therein as between the Partners.
 
Section 5.4             Liability of the Limited Partners.  No Limited Partner
shall have any personal liability to the Partnership, to any Partner, to the
creditors of the

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Partnership or to any other Person for any debt, liability or obligation of the
Partnership.  No Limited Partner shall be required to contribute funds or
capital to the Partnership in excess of its Capital Commitment although Limited
Partners may at their option contribute funds in excess of their respective
Capital Commitments pursuant to Section 5.1(c) and Section 5.1(d) hereof.
 

Section 5.5             No Third Party Beneficiaries.  The foregoing provisions
of this Article V are not intended to be for the benefit of any creditor of the
Partnership or any other Person, and no creditor of the Partnership or any other
Person may rely on the commitment of any Partner to make any Capital
Contribution.  Additional Capital Contributions and Extraordinary Fundings are
not payable unless and until the conditions set forth in Section 5.1 hereof have
been satisfied, and no creditor of the Partnership or any other Person shall
have, or be given, any right to cause a Capital Call or Extraordinary Call to be
given by the General Partner.
 
ARTICLE VI
MAINTENANCE OF CAPITAL ACCOUNTS;
ALLOCATION OF PROFITS AND LOSSES
FOR BOOK AND TAX PURPOSES
 
Section 6.1             Capital Accounts.
 
(a)           Generally:  Credits to Capital Accounts.  A Capital Account shall
be established and maintained for each Partner.  Initially, the Capital Account
of each Partner shall be credited with each Partner’s respective Initial Capital
Contribution.  Thereafter, each Partner’s Capital Account shall be credited with
any Preferred Equity Capital Contributions, Additional Capital Contributions or
Extraordinary Capital Contributions made or contributed by such Partner and such
Partner’s allocable share of Profits, any individual items of income and gain
allocated to such Partner pursuant to the provisions of this Article VI, and the
amount of additional cash, or the Fair Market Value of any Partnership asset
(net of any liabilities assumed by the Partnership and liabilities to which the
asset is subject), contributed to the Partnership by such Partner or deemed
contributed to the Partnership by such Partner in accordance with Regulations
Section 1.704-1(b)(2)(iv)(c).
 
(b)           Debits to Capital Account.  The Capital Account of each Partner
shall be debited with the Partner’s allocable share of Losses, any individual
items of expenses and loss allocated to such Partner pursuant to the provisions
of this Article VI, the amount of any cash distributed to such Partner and the
Fair Market Value of any Partnership asset (net of any liabilities assumed by
the Partner and liabilities to which the asset is subject) distributed to such
Partner or deemed distributed to such Partner in accordance with Regulations
Section 1.704-1(b)(2)(iv)(c).

(c)           Capital Account of Transferee.  In the event that any Percentage
Interest of a Partner is transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital Account of the transferor
to the extent it relates to the transferred Percentage Interest in such Partner.

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(d)           Adjustments of Book Value.  In the event that the Book Value of
any Partnership asset is adjusted as described in the definition of “Book
Value”, the Capital Accounts of all Partners shall be adjusted in accordance
with Regulation Section 1.704-1(b)(2)(iv)(f) or Regulation
Section 1.704-1(b)(2)(iv)(m), as applicable, to reflect such adjustment.
 
(e)           Compliance with Regulations.  The foregoing provisions and the
other provisions of this Agreement relating to the maintenance of Capital
Accounts are intended to comply with Regulation Section 1.704-1(b) and shall be
interpreted and applied in a manner consistent with such Regulation.  In the
event that the General Partner shall determine that it is prudent to modify the
manner in which the Capital Accounts, or any debits or credits thereto, are
computed in order to comply with such Regulation, the General Partner may make
such modification; provided, however, that if such modification constitutes a
Material Modification, it shall become effective only upon the consent of any
Partner to whom such modification would constitute a Material Modification.
 
Section 6.2             Profits and Losses.
 
(a)           Allocation.  For each Partnership taxable year or portion thereof,
Profit and Loss shall be allocated (after all allocations pursuant to Section
6.3 hereof have been made) in such a manner so as to cause the Partially
Adjusted Capital Accounts of the Partners to equal, as nearly as possible, their
respective Target Accounts.
 
(b)           Adjustments to “Profits” and “Losses”.  When used in this
Agreement, “Profits” and “Losses” shall mean, for each fiscal year or other
period, an amount equal to the Partnership’s taxable income or loss for such
year or period, determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), and otherwise in accordance with the methods of accounting
followed by the Partnership for federal income tax purposes, with the following
adjustments:
 
(i)                 any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Profits or Losses
shall be added to such taxable income or loss;
 
(ii)                any items that are specially allocated pursuant to this
Agreement shall not be taken into account in computing Profits or Losses;
 
(iii)               any expenditure of the Partnership described in
Section 705(a)(2)(B) of the Code (or treated as such under Regulation
Section 1.704-1(b)(2)(iv)(i)) and not otherwise taken into account in computing
Profits or Losses pursuant to this Definition shall be deducted from such
taxable income or loss;

(iv)                any depreciation, amortization and/or cost recovery
deductions with respect to any asset shall be deemed to be equal to the Book
Depreciation available with respect to such asset;

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(v)                 the computation of all items of income, gain, loss and
deduction shall be made without regard to any basis adjustment under Section 743
of the Code;
 
(vi)                in the event the Book Value of any Partnership asset is
adjusted pursuant to the definition of Book Value, the amount of such adjustment
shall be taken into account as gain or loss from the disposition of such asset
for purposes of computing Profits or Losses; and
 
(vii)               gain or loss resulting from any disposition of assets with
respect to which gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Book Value of the asset disposed of,
notwithstanding that the adjusted tax basis of such asset differs from its Book
Value.
 
Section 6.3             Regulatory Allocations.
 
(a)           Minimum Gain Chargeback.  If there is a net decrease in
Partnership Minimum Gain during any fiscal year, each Partner shall be specially
allocated items of Partnership income and gain for such fiscal year (and, if
necessary, subsequent fiscal years) in an amount equal to such Partner’s share
of the net decrease in Partnership Minimum Gain, as determined under Regulations
Section 1.704-2(g).  Allocations pursuant to the previous sentence shall be made
in proportion to the respective amounts required to be allocated to each Partner
pursuant thereto.  The items to be so allocated shall be determined in
accordance with Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2).  This
Section 6.3(a) is intended to comply with the “minimum gain chargeback”
requirements of Regulations Section 1.704-2(f) and shall be interpreted
consistently therewith.
 
(b)           Chargeback Attributable to Partner Nonrecourse Debt.  If there is
a net decrease in Partner Nonrecourse Debt Minimum Gain during any fiscal year
attributable to a Partner Nonrecourse Debt, each Partner with a share of Partner
Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse Debt at
the beginning of such year shall be specially allocated items of income and gain
for such fiscal year (and, if necessary, for subsequent fiscal years) in an
amount equal to such Partner’s share of the net decrease in Partner Nonrecourse
Debt Minimum Gain attributable to such Partner Nonrecourse Debt, determined in
accordance with Regulations Section 1.704-2(i)(4) and (5).  Allocations pursuant
to the previous sentence shall be made in proportion to the respective amounts
required to be allocated to each Partner pursuant thereto.  The items to be so
allocated shall be determined in accordance with Regulations Sections
1.704-2(i)(4) and 1.704-2(j)(2).  This Section 6.3(b) is intended to comply with
the “minimum gain chargeback” requirements of Regulations Section 1.704-2(i)(4)
and shall be interpreted consistently therewith.
 
(c)           Qualified Income Offset.  If any Partner unexpectedly receives any
adjustment, allocation or distribution described in Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) which results in or increases an
Adjusted Capital Account Deficit for the Partner, such Partner shall be
allocated items of income and book gain in an amount and manner sufficient to
eliminate such Adjusted Capital Account Deficit or increase therein as quickly
as possible; provided, that an allocation pursuant to this Section 6.3(c) shall
be made if and only to the extent that such Partner would have an Adjusted
Capital Account Deficit after all
 

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other allocations provided in this Article VI have been tentatively made as if
this Section 6.3(c) were not in the Agreement.  This Section 6.3(c) is intended
to constitute a “qualified income offset” as provided by Regulations
Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
 
(d)           Partner Nonrecourse Deductions.  Items of Partnership loss,
deduction or Section 705(a)(2)(B) expenditures that are attributable to a
Partner Nonrecourse Debt (“Partner Nonrecourse Deductions”) shall be allocated
among the Partners who bear the Economic Risk of Loss for such Partner
Nonrecourse Debt in the ratio in which they share Economic Risk of Loss for such
Partner Nonrecourse Debt.  This provision is to be interpreted in a manner
consistent with the requirements of Regulations Section 1.704-2(b)(4) and
(i)(1).
 
(e)           Limitation on Allocation of Net Loss.  To the extent any
allocation of Losses or other items of loss or deduction would cause or increase
an Adjusted Capital Account Deficit as to any Partner, such allocation shall be
reallocated among the other Partners in accordance with their respective
Percentage Interests, subject to the limitations hereof.
 
(f)           Curative Allocation.  The allocations set forth in this
Section 6.3 (the “Regulatory Allocations”) are intended to comply with certain
requirements of the applicable Regulations promulgated under Code
Section 704(b).  Notwithstanding any other provision of this Article VI, the
Regulatory Allocations shall be taken into account in allocating other operating
Profits, Losses and other items of income, gain, loss and deduction to the
Partners for Capital Account purposes so that, to the extent possible, the net
amount of such allocations of Profits, Losses and other items shall be equal to
the amount that would have been allocated to each Partner if the Regulatory
Allocations had not occurred.
 
Section 6.4             Allocation of Tax Items for Tax Purposes.
 
(a)           Generally.  Subject to Sections 1.704-1(b)(4)(i) and
1.704-1(b)(2)(iv)(m) of the Regulations and except as otherwise provided in this
Article VI, allocations of income, gain, loss, deduction and credit for federal,
state and local tax purposes shall be allocated to the Partners in the same
manner and amounts as the book items corresponding to such tax items are
allocated for Capital Account purposes.
 
(b)           Recapture Income.  Notwithstanding Section 6.4(a) hereof, if there
is a gain on any sale, exchange or other disposition of Partnership assets and
all or a portion of such gain is characterized as ordinary income by virtue of
the recapture rules of Code Section 1245 or 1250, or under the corresponding
recapture rules of state or local income tax law, as the case may be, then, to
the extent possible, such recapture income for United States and state and local
tax purposes shall be allocated to the Partners in the ratio that they were
allocated Tax Depreciation previously taken and allowed with respect to the
Partnership assets being sold or otherwise disposed of.

(c)           Section 754 Adjustments.  Notwithstanding Section 6.4(a) hereof,
any increase or decrease in the amount of any items of income, gain, loss,
deduction or credit for tax purposes attributable to an adjustment to the basis
of Partnership assets made

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pursuant to a valid election or deemed election under Sections 732(d), 734, 743,
and 754 of the Code, and any increase or decrease in the amount of any item of
credit or tax preference attributable to any such adjustment, shall be allocated
to those Partners entitled thereto under such law.  Such items shall be excluded
in determining the Capital Accounts of the Partners, except as otherwise
provided by Section 1.704-1(b)(2)(iv)(m) of the Regulations.
 
(d)           Nonrecourse Deductions.  Any “Nonrecourse Deductions” as defined
in Treasury Regulations Section 1.704-2(c) for any fiscal year or other period
shall be specially allocated as items of loss in the manner provided in Treasury
Regulations Section 1.704-2(j)(1)(ii).  Depreciation deductions shall be treated
as Nonrecourse Deductions with respect to a property only to the extent that
such deductions reduce the property’s tax basis below the amount of the
Nonrecourse Liability encumbering the property.
 
(e)           Sharing of Excess Nonrecourse Liabilities.  For purposes of
Section 1.752-3(a)(3) of the Regulations, the excess Nonrecourse Liabilities of
the Partnership shall be allocated one hundred (100%) percent to LMLP.  In the
event it is determined that Inland would be allocated less than its
proportionate share of depreciation in any year as a result of the allocation of
liabilities to LMLP, the Partners agree to reallocate the liabilities in
accordance with Percentage Interests.
 
(f)           Section 704(c).  Notwithstanding Section 6.4 hereof, if the
Partnership owns or acquires Section 704(c) Property, or if the Tax Matters
Partner makes an election referred to in the definition of “Book Value” herein,
then, solely for tax purposes and not for Capital Account purposes, Tax
Depreciation, and any gain or loss, attributable to such Section 704(c) Property
shall be allocated between or among the Partners in a manner that takes into
account the variation between such Book Value and such adjusted tax basis, using
the traditional method of allocation, in accordance with the principles of Code
Section 704(c) and the Regulations promulgated thereunder and such method set
forth in Regulations Section 1.704-3(b).
 
Section 6.5             Tax Matters Partner.  The General Partner is hereby
designated as the “tax matters partner” for the Partnership as such term is
defined in Section 6231(a)(7) of the Code (the “Tax Matters Partner”), and all
federal, state and local tax audits and litigation shall be conducted under the
direction of the General Partner.  All expenses incurred with respect to any tax
matter which does or may affect the Partnership, including but not limited to
expenses incurred in connection with Partnership level administrative or
judicial tax proceedings, shall be paid out of Partnership assets, whether or
not included in an Annual Plan.  The Tax Matters Partner shall, promptly upon
receipt thereof, forward to each Partner a copy of any correspondence relating
to the Partnership received from the Internal Revenue Service or any other tax
authority which relates to matters that are of material importance to the
Partnership and/or the Partners.  The Tax Matters Partner shall promptly advise
each Partner in writing of the substance of any material conversation held with
any representative of the Internal Revenue Service which relates to an audit or
administrative proceeding relating to a tax return of the Partnership.  
 

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Section 6.6              Adjustments.
 
(a)           Generally.  Except as otherwise provided in this Agreement, all
items of Partnership income, gain, loss and deduction and any other allocations
not otherwise provided for shall be divided among the Partners in the same
proportions as they share Profits and Losses, as the case may be, for the year.
 
(b)           Upon Transfer or Change in Percentage Interest.   If any
Percentage Interest is transferred in any fiscal year in accordance with this
Agreement, or if a Partner’s Percentage Interest changes during any fiscal year,
all Profits and Losses attributable to such Percentage Interest for such fiscal
year shall be divided and allocated in accordance with an interim closing of the
books as of the date of a transfer or change.
 
(c)           Amendments to this Article VI.  The General Partner is
specifically authorized by each Partner, upon the advice of the accountants or
legal counsel for the Partnership, to amend this Article VI to comply with any
Regulations with respect to the distributions and allocations of the Partnership
and any such amendment shall become effective; provided, however, that if such
amendment constitutes a Material Modification for any Partner, then such
amendment shall become effective only upon the express written consent of such
Partner.
 
ARTICLE VII
DISTRIBUTIONS
 
Section 7.1              Cash Available for Distributions.
 
(a)           Generally.  Notwithstanding anything herein to the contrary, no
distribution shall be made until all Priority Loans are paid in full.
 
(i)           Following (x) the satisfaction of accrued and unpaid interest on
Priority Loans, in proportion to the outstanding Priority Loans, if any, and (y)
the satisfaction of outstanding principal balances on Priority Loans, in
proportion to the outstanding Priority Loans, if any, the General Partner shall
cause the Partnership to distribute all Net Cash Flow from Operations quarterly
on the 15th of January, April, July and October (each a “Distribution Date”, as
follows:
 
(A)                  first, to Inland until such time as Inland has received
cumulative distributions in an amount sufficient to achieve a 9% Cash-On-Cash
Return (“Inland Priority Return”);
 
(B)                  second, to LMLP in an amount equal to the Preferred Equity
Return;
 
(C)                  third, to LMLP, until such time as LMLP has received
cumulative distributions in an amount sufficient to achieve a 9% Cash-On-Cash
Return (“LMLP Priority Return”);
 

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(D)                 fourth, to LMLP until all of the Preferred Equity has been
redeemed (and any allocation of Preferred Equity shall be reduced ratably in
accordance with the Preferred Equity allocation set forth on Schedule 1 hereto);
 
(E)                 fifth, to Inland until all Capital Contributions made by
Inland have been returned (for the purposes of this Section 7.1(a)(i)(D),
Capital Contributions shall include Acquisition Fees (if any) paid by Inland);
 
(F)                 sixth, to LMLP until all Capital Contributions (excluding
Preferred Equity Capital Contributions) made by LMLP or credited on LMLP’s
behalf have been returned (for the purposes of this Section 7.1(a)(i)(E),
Capital Contributions shall include 17.65% of the amount of the Acquisition Fees
(if any) paid by Inland); and
 
(G)                 thereafter, (x) so long as LMLP GP is the General Partner,
(1) 65% to Inland and (2) 35% to LMLP, or (y) so long as LMLP GP is no longer
the General Partner, (2) 85% to Inland and (2) 15% to LMLP.
 
(ii)           Following (w) the satisfaction of accrued and unpaid interest on
Priority Loans, in proportion to the outstanding Priority Loans, if any, and (x)
the satisfaction of outstanding principal balances on Priority Loans, in
proportion to the outstanding Priority Loans, if any, the General Partner shall
cause the Partnership to distribute Net Cash from Sales and Financings as soon
as practicable after the receipt of such Net Cash from Sales or Refinancings, as
follows:
 
(A)                 first, to LMLP to the extent of any unpaid Preferred Equity
Redemption Amount related to a prior sale or refinancing;
 
(B)                 second, to Inland to the extent of any unpaid Inland
Priority Return;
 
(C)                 third, if involving a Qualified Assumed Asset, to LMLP in an
amount equal to the Preferred Equity Redemption Amount related to such Qualified
Assumed Asset (but in no event will the total amount distributed under the
foregoing part of this clause (C) exceed the outstanding Preferred Equity
Capital Contribution), together with any accrued and unpaid Preferred Equity
Return;
 
(D)                 fourth, to LMLP to the extent of any unpaid LMLP Priority
Return;
 
(E)                 fifth, to Inland until all Capital Contributions made by
Inland have been returned (solely for the purposes of this Section 7.1(a)(i)(D),
Capital Contributions shall include Acquisition Fees (if any) paid by Inland);
 
(F)                 sixth, to LMLP until all Capital Contributions (excluding
Preferred Equity Capital Contributions) made by LMLP or credited on LMLP’s
behalf have been returned (solely for the purposes of this Section 7.1(a)(i)(E),
Capital Contributions shall include 17.65% of the amount of the Acquisition Fees
(if any) paid by Inland);
 

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(G)                seventh, to LMLP until all Preferred Equity Capital
Contributions have been returned or redeemed; and
 
(H)                thereafter, (x) so long as LMLP GP is the General Partner,
(1) 65% to Inland and (2) 35% to LMLP, or (y) so long as LMLP GP is no longer
the General Partner, (2) 85% to Inland and (2) 15% to LMLP.
 
(iii)               Distributable Cash shall not be used to acquire Qualified
Assets or make capital improvements on Qualified Assets unless approved in
accordance with Section 3.4 hereof.
 
(b)           Withholdings.  The General Partner is authorized to withhold from
distributions or allocations to any Partner (or, in the event there are
insufficient funds, require such Partner to contribute to the Partnership) and
to pay over to any federal, state or local government any amounts required to be
withheld pursuant to the Code or any provisions of any other federal, state or
local law with respect to any payment, distribution or allocation to the
Partnership or such Partner and shall allocate any such amounts to such Partner
with respect to which such amount was withheld. All amounts so withheld
(including such amounts contributed by the Partner) shall be treated as amounts
distributed to such Partner, and will reduce the amount otherwise distributable
to such Partner, pursuant to this Article VII for all purposes under this
Agreement.
 
(c)           Restrictions on Distributions.  Notwithstanding anything to the
contrary contained in this Section 7.1, the Partnership shall not make a
distribution to the extent that, at the time of such distribution and after
giving effect to such distribution, all liabilities of the Partnership (other
than liabilities to the Partners on account of their Capital Contributions or
liabilities for which the recourse of creditors is limited to specific assets of
the Partnership) shall exceed the Fair Market Value of the Partnership assets,
except that the Fair Market Value of Qualified Asset that is subject to a
liability for which the recourse of the creditors is limited shall be included
in the Partnership assets only to the extent that the Fair Market Value of such
Qualified Asset exceeds that liability.
 
ARTICLE VIII
TRANSFER; REMOVAL OF GENERAL PARTNER
 
Section 8.1             Prohibition on Transfers and Withdrawals by Partners.  
 
(a)           The Partners shall be prohibited from, directly or indirectly,
transferring, assigning, pledging or hypothecating their respective interests
(or any part of such interests) in the Partnership and any attempted transfer
shall be void ab initio; provided, that the following transfers shall be
permitted:
 
(i)                 assignments of a Partner’s interest in the Partnership (but
only its entire interest) to an Affiliate of such Partner, but only upon fifteen
(15) days written notice to the other Partners;
 

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(ii)                  transfers up to 49% of the ownership interests in a
Partner, so long as the management of such Partner immediately prior to such
transfer possesses, directly or indirectly, the power to direct or cause the
direction of the management or policies of such Partner following such transfer,
whether through the ability to exercise voting power, by contract or otherwise;
 
(iii)                 transfers by inheritance, devise, bequest or by operation
of law upon the death of a natural person; and
 
(iv)                 sales, transfers or issuance of shares of capital stock in
LXP and securities convertible into capital stock in LXP, provided a class of
capital stock in LXP is listed on a nationally recognized stock exchange or
market.
 
(b)           Except as provided in this Section 8.1 and in Section
8.2,Section 11.1 and Section 11.2 hereof, the Partners shall be prohibited from
withdrawing from the Partnership.  If any Partner withdraws from the
Partnership, it shall be and remain liable for all obligations and liabilities
incurred by it as a Partner, and shall be liable to the Partnership and the
other Partners for all indemnifications set forth herein and for any
liabilities, losses, claims, damages, costs and expenses (including reasonable
attorneys’ fees) incurred by the Partnership as a result of any withdrawal in
breach of this Agreement.
 
Section 8.2             Removal of LMLP GP as General Partner.  Upon a Removal
Event, Inland shall have the right to remove the General Partner for a period of
sixty (60) days following the occurrence of a Removal Event, and if such right
is timely exercised, Inland shall have the right to appoint either Inland or an
Affiliate of Inland as the new General Partner.  Such removal of LMLP GP shall
be effective ten (10) Business Days after receipt by LMLP GP of written notice
from Inland.  Upon such removal, notwithstanding anything in this Agreement or
the Management Agreement to the contrary, (a) LMLP GP shall cease to be a
general partner and a partner of the Partnership; (b) two of the three members
of the Executive Committee appointed by LMLP shall be removed and replacements
shall be appointed by Inland; (c) the Management Agreement shall terminate; and
(d) either Inland or one of its Affiliates shall be appointed the General
Partner of the Partnership and this Agreement shall be amended to reflect such
appointment.  
 
ARTICLE IX
TERMINATION
 
Section 9.1             Dissolution.  The Partnership shall dissolve and
commence winding up and liquidating upon the first to occur of any of the
following (collectively, the “Liquidating Events”):
 
(i)                 the reduction to cash or cash equivalents (other than
purchase money notes obtained by the Partnership from the sale of Qualified
Asset) of the last remaining Qualified Asset;
 
(ii)                 the agreement in writing by the Partners to dissolve the
Partnership;
 

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(iii)                 the entry of a decree of judicial dissolution of the
Partnership pursuant to Section 17-802 of the Act;
 
(iv)                 the election of any Partner to dissolve the Partnership on
the seventh anniversary of March 1, 2008 or any anniversary thereafter;
 
(v)                 all of the Qualified Assets have been sold to LMLP, or its
designees, or to Inland, or its designees, pursuant to the exercise of the
Buy/Sell as provided in Section 11.2 hereof;
 
(vi)                 the Bankruptcy of any LMLP Partner or Inland;
 
(vii)                the election of LMLP to dissolve the Partnership after (A)
LMLP GP is no longer the General Partner and (B) a breach by Inland or the
General Partner of (x) Articles VI or VII hereof, which remains uncured for
thirty (30) days following receipt of notice of such breach from LMLP, or (y)
Section 12.19 hereof.
 
(viii)                the election of Inland to dissolve the Partnership after
the removal of LMLP GP as the General Partner upon a Removal Event.
 
Section 9.2            Termination.  In all cases of dissolution of the
Partnership, the business of the Partnership shall be wound up and the
Partnership terminated as promptly as practicable thereafter, and each of the
following shall be accomplished:
 
(i)                  The Liquidator shall cause to be prepared a statement
setting forth the assets and liabilities of the Partnership as of the date of
dissolution, a copy of which statement shall be furnished to each Partner;
 
(ii)                 The Qualified Assets and assets of the Partnership shall be
liquidated by the Liquidator as promptly as possible, but in an orderly and
businesslike and commercially reasonable manner, consistent with maximizing the
price to be received.  The Liquidator in its reasonable discretion shall
determine whether to sell any Qualified Asset at a public or private sale, for
such price and on such terms as the Liquidator shall determine in its sole
discretion.  The Liquidator may, in the exercise of its good faith business
judgment and if commercially reasonable, determine not to sell a portion of the
Qualified Assets and assets of the Partnership, in which event such Qualified
Assets and assets shall be distributed in kind pursuant to clause (iv) below;
 
(iii)                 Any Profit or Loss realized by the Partnership upon the
sale or other disposition of its assets pursuant to Section 9.2(ii) above shall
be allocated to the Partners as required by Article VI hereof; and
 
(iv)                 The proceeds of sale and all other assets of the
Partnership shall be applied and distributed as follows and in the following
order of priority:
 
(A)                                To the payment of the debts and liabilities
of the Partnership and the expenses of Liquidation;
 

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(B)                                To the setting up of any reserves which the
Liquidator shall reasonably determine to be necessary for contingent,
unliquidated or unforeseen liabilities or obligations of the Partnership or the
Partners arising out of or in connection with the Partnership.  Such reserves
may, in the discretion of the Liquidator, be paid over to a national bank or
national title company selected by it and authorized to conduct business as an
escrowee to be held by such bank or title company as escrowee for the purposes
of disbursing such reserves to satisfy the liabilities and obligations described
above, and at the expiration of such period as the Liquidator may reasonably
deem advisable, distribute any remaining balance in the manner set forth below;
and
 
(C)                                The balance, if any, to the Partners in
accordance with Sections 7.1(a)(ii) hereof.
 
No payment or distribution in any of the foregoing categories shall be made
until all payments in each prior category shall have been made in full.  If the
payments due to be made in any of the foregoing categories exceed the remaining
assets available for such purpose, such payment shall be made to the Persons
entitled to receive the same prorata in accordance with the respective amount
due them.
 
Payments described in clause (iv) above must be made in cash.  The Partners
shall continue to share profits, losses and other tax items during the period of
liquidation in the same proportions as before dissolution.
 
Section 9.3             Certificate of Cancellation.  Upon completion of the
distribution of the Partnership’s assets as provided in this Article IX and the
completion of the winding-up of the affairs of the Partnership, the Partnership
shall be terminated, and the Liquidator shall cause the filing of a certificate
of cancellation of the certificate of limited partnership in the office of the
Secretary of State of the State of Delaware in accordance with the Act and shall
take all such other actions as may be necessary to terminate the Partnership in
accordance with the Act and shall take such other actions as may be necessary to
terminate the Partnership’s registration in any other jurisdictions where the
Partnership is registered or qualified to do business.
 
Section 9.4             Acts in Furtherance of Liquidation.  Each Partner or
former Partner, upon the request of the Liquidator, shall promptly execute,
acknowledge and deliver all documents and other instruments as the Liquidator
shall reasonably request to effectuate the proper dissolution and termination of
the Partnership, including the winding up of the business of the Partnership.
 
ARTICLE X
REPRESENTATIONS OF THE PARTNERS
 
Section 10.1           Representations of Inland.  Inland hereby represents and
warrants to the LMLP Partners and the Partnership as follows:
 
(i)                 this Agreement constitutes the valid and binding agreement
of Inland, enforceable against Inland in accordance with its terms, subject as
to
 

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enforcement of bankruptcy, insolvency and other similar laws affecting the
rights of creditors and to general principles of equity;
 
(ii)                 Inland has been duly formed and is validly existing as a
limited liability company in good standing under the laws of the State of
Delaware, with all requisite power and authority to enter into this Agreement,
to carry out the provisions and conditions hereof and to perform all acts
necessary or appropriate to consummate all of the transactions contemplated
hereby;
 
(iii)                 Inland has all requisite power and authority to enter into
this Agreement, to carry out the provisions and conditions hereof and to perform
all acts necessary or appropriate to consummate all of the transactions
contemplated hereby and no further action by Inland is necessary to authorize
the execution or delivery of this Agreement;
 
(iv)                 this Agreement has been duly and validly executed and
delivered by Inland and the execution, delivery and performance hereof by Inland
does not and will not (i) require the approval of any other Person, or
(ii) contravene or result in any breach of or constitute any default under, or
result in the creation of any lien upon Inland’s assets under, any indenture,
mortgage, loan agreement, lease or other agreement or instrument to which Inland
is a party or by which Inland or any of its assets is bound;
 
(v)                 the formation of the Partnership does not and the
consummation of the transactions contemplated herein will not result in any
violation of the organizational documents of Inland;
 
(vi)                 Inland has the financial capacity to perform its
obligations under this Agreement;
 
(vii)                no finder’s, broker’s or similar fee or commission has been
paid or shall be paid by Inland to any individual or organization in connection
with the formation of the Partnership; provided, however, that Inland may pay
fees to related parties;
 
(viii)               there is no action, suit or proceeding pending or, to its
knowledge, threatened against Inland that questions the validity or
enforceability of this Agreement or, if determined adversely to it, would
materially adversely affect the ability of Inland to perform its obligations
hereunder;
 
(ix)                 Inland is not the subject of any Bankruptcy;
 
(x)                  to Inland’s knowledge, Inland has not received from any
governmental agency any notice of violation of any law, statute or regulation
which would have a material adverse effect on the Partnership;
 
(xi)                 to Inland’s knowledge, Inland is not in default in the
performance or observation of any obligation under any agreement or instrument
to which it is a party or by which it or any of its assets is bound, which
default would individually or in the aggregate with other defaults materially
adversely affect the business or financial condition of Inland or the
Partnership; and
 

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(xii)                 Inland (which for the purposes of this Section 10.2(x)
includes its partners, members, principal stockholders owning more than ten
percent (10%) of the outstanding capital stock of Inland, and any other
constituent entities) (1) has not been designated as a “specifically designated
national and blocked person” on the most current list published by the U.S.
Treasury Department Office of Foreign Assets Control at its official website,
http://www.treas.gove/ofac/t11sdn.pdf or at any replacement website or other
replacement official publication of such list, and (2) is currently in
compliance with the regulations of the Office of Foreign Asset Control of the
Department of the Treasury and any statute, executive order (including the
September 24, 2001, Executive Order Blocking Property and Prohibiting
Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism),
or other governmental action relating thereto.
 
Section 10.2           Representations of the LMLP Partners.  Each LMLP Partner
represents and warrants to Inland and the Partnership as follows:
 
(i)                 this Agreement constitutes the valid and binding agreement
of such LMLP Partner enforceable against such LMLP Partner in accordance with
its terms, subject as to enforcement to bankruptcy, insolvency and other similar
laws affecting the rights of creditors and to general principles of equity;
 
(ii)                 LMLP has been duly formed and is validly existing as a
limited partnership in good standing under the laws of the State of Delaware,
with all requisite power and authority to enter into this Agreement, to carry
out the provisions and conditions hereof and to perform all acts necessary or
appropriate to consummate all of the transactions contemplated hereby;
 
(iii)                 LMLP GP has been duly formed and is validly existing as a
limited liability company in good standing under the laws of the State of
Delaware, with all requisite power and authority to enter into this Agreement,
to carry out the provisions and conditions hereof and to perform all acts
necessary or appropriate to consummate all of the transactions contemplated
hereby;
 
(iv)                 such LMLP Partner has all requisite power and authority to
enter into this Agreement, to carry out the provisions and conditions hereof and
to perform all acts necessary or appropriate to consummate all of the
transactions contemplated hereby and no further action by such LMLP Partner is
necessary to authorize the execution or delivery of this Agreement;
 
(v)                 this Agreement has been duly and validly executed and
delivered by such LMLP Partner and the execution, delivery and performance
hereof by such LMLP Partner does not and will not (x) require the approval of
any other Person or (y) contravene or result in any breach of or constitute any
default under, or result in the creation of any lien upon such LMLP Partner’s
assets under, any indenture, mortgage, loan agreement, lease or other agreement
or instrument to which such LMLP Partner or any LMLP Affiliated Party is a party
or by which such LMLP Partner or any of its assets is bound;
 

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(vi)                 to such LMLP Partner’s knowledge, such LMLP Partner is not
in default in the performance or observation of any obligation under any
agreement or instrument to which it is a party or by which it or any of its
assets is bound, which default would individually or in the aggregate with other
defaults materially adversely affect the business or financial condition of such
LMLP Partner or the Partnership;
 
(vii)                the formation of the Partnership does not and the
consummation of the transactions contemplated herein will not result in any
violation of the organizational documents of such LMLP Partner;
 
(viii)               no finder’s, broker’s or similar fee or commission has been
paid or shall be paid to any individual or organization in connection with the
formation of the Partnership except for fees payable to Wachovia Capital
Markets, LLC, which shall be paid by LMLP and not the Partnership;
 
(ix)                 there is no action, suit or proceeding pending or, to its
knowledge, threatened against such LMLP Partner that questions the validity or
enforceability of this Agreement or, if determined adversely to it, would
materially adversely affect the ability of such LMLP Partner to perform its
obligations hereunder;
 
(x)                  such LMLP Partner is not the subject of any Bankruptcy;
 
(xi)                 to such LMLP Partner’s knowledge, such LMLP Partner has not
received from any governmental agency any notice of violation of any law,
statute or regulation which would have a material adverse effect on the
financial condition of such LMLP Partner or of the Partnership;
 
(xii)                each LMLP Partner has the financial capacity to perform its
obligations under this Agreement; and
 
(xiii)               each LMLP Partner (which for the purposes of this Section
10.2(x) includes its partners, members, principal stockholders owning more than
ten percent (10%) of the outstanding capital stock of such LMLP Partner, and any
other constituent entities) (1) has not been designated as a “specifically
designated national and blocked person” on the most current list published by
the U.S. Treasury Department Office of Foreign Assets Control at its official
website, http://www.treas.gove/ofac/t11sdn.pdf or at any replacement website or
other replacement official publication of such list, and (2) is currently in
compliance with the regulations of the Office of Foreign Asset Control of the
Department of the Treasury and any statute, executive order (including the
September 24, 2001, Executive Order Blocking Property and Prohibiting
Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism),
or other governmental action relating thereto.
 
ARTICLE XI
SPECIAL PARTNER RIGHTS AND OBLIGATIONS
 
Section 11.1            Right of First Offer.  
 

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(a)           At any time after the Rights Trigger Date, if either Inland or
LMLP (except if the Rights Trigger Date occurs because of an Event of Default by
an LMLP Partner) wishes to sell their Percentage Interest or cause the
Partnership to sell any Qualified Asset (for the purposes of this section, such
selling Partner, the “ROFO Offering Partner”), the ROFO Offering Partner shall
deliver a written notice (a “ROFO Notice”) to the Other Partner (the “ROFO
Responding Partner)”) specifying to the ROFO Responding Partner in writing the
terms and conditions (the “ROFO Terms”) and the price (the “ROFOOffer Price”) at
which the ROFO Offering Partner would be willing to sell their entire Percentage
Interest or the ROFO Offering Partner would be willing to permit the Partnership
to sell any of the Qualifying Assets, as the case may be, to the ROFO Responding
Partner.  Any ROFO Notice shall reference the invocation of this Section 11.1
and shall constitute an irrevocable offer from the ROFO Offering Partner to the
ROFO Responding Partner to sell its entire Percentage Interest or permit the
sale by the Partnership of the stated Qualifying Assets, as the case may be, at
the ROFO Offer Price. If the ROFO Responding Partner does not elect to buy the
ROFO Offering Partner’s entire Percentage Interest or the stated Qualifying
Assets, as the case may be, within forty-five (45) days following receipt of the
ROFO Notice by delivering an election notice to the ROFO Offering Partner (the
“ROFO Response Notice”), subject to Sections 11.1(b) and (c), the ROFO Offering
Partner shall be permitted to sell their entire Percentage Interest or the
stated Qualifying Assets on behalf of the Partnership, as the case may be, to a
bona fide third party pursuant to an arm’s length transaction on terms not more
favorable to such bona fide third party than the ROFO Terms and for an amount
equal to or greater than the ROFO Offer Price (the “Required Third Party Price
and Terms”).  In the event the ROFO Responding Partner fails to timely deliver a
ROFO Response Notice, subject to Sections 11.1(b) and (c), the ROFO Offering
Partner shall be permitted to sell its entire Percentage Interest or any of the
Qualifying Assets on behalf of the Partnership, as the case may be, for the
Required Third Party Price and Terms.
 
(b)           In the event the ROFO Offering Partner is permitted to sell its
entire Percentage Interest or the stated Qualifying Assets on behalf of the
Partnership, as the case may be, pursuant to Section 11.1(a) above, the ROFO
Offering Partner shall have the right for a period of six (6) months after the
date of the ROFO Notice (the “Third Party Sale Period”) to sell its entire
Percentage Interest or the stated Qualifying Assets on behalf of the
Partnership, as the case may be, to a bona fide third party for and on the
Required Third Party Price and Terms. In the event the ROFO Offering Partner
fails to consummate the sale of its entire Percentage Interest or the stated
Qualifying Assets on behalf of the Partnership, as the case may be, for the
Required Third Party Price prior to the expiration of the Third Party Sale
Period, the ROFO Offering Partner’s right to sell its entire Percentage Interest
or the stated Qualifying Assets on behalf of the Partnership, as the case may
be, to a bona fide third party will be revoked until such time as the ROFO
Offering Partner has repeated the process set forth in Section 11.1(a) and
provided the ROFO Responding Partner with the right to make its election
pursuant to Section 11.1(a) above.
 
(c)           Any exercise of the provisions of this Section 11.1 is also
subject to the provisions of Section 11.3 below.
 

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Section 11.2            Buy/Sell.
 
(a)           Generally.  After the Rights Trigger Date, Inland or LMLP (except
if the Rights Trigger Date occurs because of an Event of Default by an LMLP
Partner), as specified therein (the “Buy/Sell Offering Partner”), may provide
the Other Partner (the “Buy/Sell Responding Partner”) with notice (the “Buy/Sell
Notice”) of a price (the “Buy/Sell Offer Price”) that the Buy/Sell Offering
Partner, or its designated Affiliate(s), is willing to pay to purchase (A) those
Qualified Assets which the Buy/Sell Offering Partner, or its designated
Affiliate(s), desire to purchase if the Buy/Sell Offering Partner, or its
designated Affiliate(s), desire to purchase less than all of the Qualified
Assets from the Partnership, or (B) all of the Qualified Assets if the Buy/Sell
Offering Partner, or its designated Affiliate(s), desire to purchase all of the
Qualified Assets (provided that an offer to purchase all of the Qualified Assets
shall be implemented as a purchase by the Buy/Sell Offering Partner, or its
designated Affiliate(s), of the Percentage Interests of the Buy/Sell Responding
Partner) (such Qualified Assets or such Percentage Interests, as the case may
be, the “Buy/Sell Asset”).  The Buy/Sell Notice shall include, as an attachment
thereto, a bona fide proposed purchase and sale agreement on terms reasonably
customary for the sale of real estate assets or for the sale of partnership
interests in a limited partnership that owns primarily real estate assets (the
“Offered Agreement”).  Upon receipt of the Buy/Sell Notice, the Buy/Sell
Responding Partner shall have forty-five (45) days to provide to the Buy/Sell
Offering Partner a notice (the “Buy/Sell Response Notice”) specifying the
Buy/Sell Responding Partner’s election either, (i) if the Buy/Sell Asset
comprises less than all of the Qualified Assets, to cause the Partnership to
sell the Buy/Sell Asset to the Buy/Sell Offering Partner, or its designated
Affiliate(s), at the Buy/Sell Offer Price pursuant to the Offered Agreement or
(y) to purchase (or have a designated Affiliate(s) purchase) the Buy/Sell Asset
from the Partnership for a purchase price equal to the Buy/Sell Offer Price and
on substantially the same terms and conditions as provided in the Offered
Agreement, or, (ii) if the Buy/Sell Asset comprises all of the Qualified Assets,
purchase the Percentage Interest of the Buy/Sell Offering Partner or sell its
Percentage Interest to the Buy/Sell Offering Partner, or its designated
Affiliate(s), for a purchase price equal to the amount the Buy/Sell Responding
Partner would receive under Section 9.2 hereof if the Partnership assets were
sold at the Buy/Sell Offer Price and the Partnership were liquidated and
dissolved (the “Buy/Sell Responding Interest Price”) and on substantially the
same terms and conditions as provided in the Offered Agreement.  Any Buy/Sell
Notice made with respect to all of the Qualified Assets in connection with an
Event of Default shall supersede and render of no further effect any Buy/Sell
Notice or ROFO Notice (x) made with respect to less than all of the Qualified
Assets and (y) to which no Buy/Sell Response Notice or ROFO Response Notice, as
the case may be, has been provided to the Buy/Sell Offering Partner or ROFO
Offering Partner, as the case may be.
 
(b)           Buy/Sell Responding Partner’s Election to Purchase.  If the
Responding Partner timely delivers a Buy/Sell Response Notice that specifies the
Buy/Sell Responding Partner’s election to purchase the Buy/Sell Asset, as
described in Section 11.2(a) above, then the Buy/Sell Responding Partner shall
have up to seventy-five (75) days from the date of the delivery of the Buy/Sell
Response Notice to close the purchase of the Buy/Sell Asset on substantially the
same terms and conditions as contained in the Offered Agreement.
 
(c)           Buy/Sell Responding Partner’s Election not to Purchase.  If the
Buy/Sell Responding Partner timely delivers a Buy/Sell Response Notice that
specifies the
 

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Buy/Sell Responding Partner’s election not to purchase the Buy/Sell Asset, or if
the Buy/Sell Responding Partner fails to deliver a timely Buy/Sell Response
Notice, then (i) if the Buy/Sell Asset comprises less than all of the Qualified
Assets, the General Partner shall cause the Partnership to proceed to close the
acquisition of the Buy/Sell Asset at the Buy/Sell Offer Price in accordance with
the terms and conditions of the Offered Agreement, provided, however, that such
closing must take place within the seventy-five (75) day period beginning on the
date of delivery of the Buy/Sell Response Notice, or, (ii) if the Buy/Sell Asset
comprises all of the Qualified Assets, the Buy/Sell Offering Partner shall
purchase the Percentage Interests of the Buy/Sell Responding Partner within the
seventy-five (75) day period described in clause (i) above, for the Buy/Sell
Responding Interest Price.  In determining the amount of the Buy/Sell Responding
Interest Price, it will be assumed that no reserves will be required pursuant to
Section 9.2 hereof.
 
Section 11.3           Provisions Applicable to Right of First Offer and
Buy/Sell
 
(a)           The Purchasing Partner shall deliver to a mutually acceptable
escrow agent a non-refundable cash deposit within forty-five (45) days of the
Responding Partner’s actual or deemed notice in an amount equal to the lesser of
(i) five percent (5%) of the Offer Price, as applicable, or (ii) $1,000,000 (the
“Deposit”) to secure the Purchasing Partner’s obligations hereunder.
 
(b)           Closing of any transfer pursuant to Section 11.1 or Section 11.2
above (“Closing”) shall occur on the thirtieth (30th) day following the date of
the escrow agent's receipt of the Purchasing Partner’s deposit as contemplated
by Section 11.3(b) above (or, if such day is not a Business Day, the next
succeeding Business Day) (the “Closing Date”), at the principal place of
business of the Partnership, or at such other time and place as may be mutually
agreed upon by the Purchasing Partner and the Selling Partner, and (unless
otherwise agreed to by the Purchasing Partner and the Selling Partner) shall be
on a cash basis.  At such Closing: (i) the Selling Partner shall convey all of
its Percentage Interest in the Partnership, and, if applicable, all of their
debt claims against the Partnership, and warrant that such interests and claims
are free of all adverse claims and encumbrances (unless otherwise agreed upon by
the Purchasing Partner and the Selling Partner); (ii) the Purchasing Partner
shall pay the Selling Partner the Offer Price, less a credit for the Deposit
(which shall be delivered by the escrow agent to the Selling Partner and the
amount thereof credited against the Offer Price), and as adjusted by customary
closing prorations and customary closing costs, in cash; and (iii) the Selling
Partner, the Purchasing Partner and the Partnership shall execute and deliver
such other documents as may be appropriate to effect, evidence and perfect the
transaction.
 
(c)           Should the Purchasing Partner fail to close the transactions
elected pursuant to Section 11.1 or Section 11.2 above prior to the Closing
Date, the Selling Partner, as its exclusive remedies in the circumstances, (i)
shall be entitled to receive from the escrow agent, as liquidated damages for
such failure, the Deposit deposited pursuant to Section 11.3(b) of this
Agreement, (ii) shall have the right for a period of twelve (12) months after
the scheduled Closing Date (the “Default Sale Period”) to acquire the Purchasing
Partner’s Percentage Interest or interest in the stated Qualified Assets, as the
case may be, for 95% of the
 

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Offer Price, and (iii) the Purchasing Partner’s rights pursuant to Section 11.1
and 11.2 hereof shall be suspended for a period of twelve (12) months after the
scheduled Closing Date.
 
(d)           In connection with a transfer pursuant to Sections 11.1 or 11.2,
the Purchasing Partner may designate an Affiliate or Affiliates to acquire the
Selling Partner’s Percentage Interests or interests in the stated Qualified
Assets, as the case may be, in which event such Affiliate(s) shall acquire such
Percentage Interest or interests in the stated Qualified Assets, as the case may
be, but no such designation or acquisition shall relieve the Purchasing Partner
(as determined without regard to this Section 11.3(e)) from any obligation under
this Article XI.
 
(e)           Each of Inland and LMLP shall have the right to exercise either
the Right of First Offer pursuant to Section 11.1 above or the Buy/Sell pursuant
to Section 11.2 above (such Partner being the “Initiating Partner”); provided,
however, that upon any Initiating Partner’s exercise of either of these
provisions, the Other Partner may not again trigger the provisions of either
Section 11.1 or 11.2 until the termination of all procedures and timeframes
pursuant to the Initiating Partner’s chosen provision.
 
(f)           As a condition to any transfer by either Inland or LMLP of its
Percentage Interest or the stated Qualified Assets by the Partnership, as the
case may be, pursuant to either Section 11.1 or Section 11.2 of this Agreement,
the Selling Partner must be released at the closing from any indemnities,
guaranties or other credit enhancements granted by such Selling Partner on
behalf of the Partnership to any third party relating to the interest being
transferred.
 
(g)           As a condition to any transfer by Inland of its Percentage
Interest or the stated Qualified Assets by the Partnership, as the case may be,
pursuant to either Section 11.1 or Section 11.2 of this Agreement, any Preferred
Equity relating to a Qualified Assumed Asset that is being, directly or
indirectly, transferred shall be redeemed as if such Qualified Assumed was sold
and the proceeds were distributed in accordance with Section 7.2(a)(ii) hereof.
 
(h)           If either Inland or LMLP initiates a legal action with respect to
any exercise of the other Partner’s rights under this Article XI, the losing
Partner shall pay all attorneys’ fees and court costs arising in connection with
such legal action.
 
(i)           Each Partner shall bear its own costs, such as due diligence
expenses and consultants’ and attorneys’ fees, incurred in connection with its
exercise of, or response to, any rights under this Article XI.
 
ARTICLE XII
GENERAL PROVISIONS
 
Section 12.1           Notices.
 
(a)           Generally.  All notices, demands, approvals, consents or requests
provided for or permitted to be given pursuant to this Agreement must be in
writing.
 

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(b)           Manner of Notice.  All notices, demands, approvals, consents and
requests to be sent to the Partnership or any Partner pursuant to the terms
hereof shall be deemed to have been properly given or served, if personally
delivered, sent by recognized messenger or next day courier service, or sent by
United States mail, telex or facsimile transmission to the addresses or
facsimile numbers listed below, and will be deemed received, unless earlier
received:  (a) if sent by express, certified or registered mail, return receipt
requested, when actually received or delivery refused; (b) if sent by messenger
or courier, when actually received; (c) if sent by telex or facsimile
transmission, on the date sent, so long as a confirming notice is sent by
messenger or courier or by express, certified, registered, or first-class mail;
(d) if delivered by hand, on the date of delivery; and (e) if sent by
first-class mail, seven days after it was mailed.  Rejection or other refusal to
accept or the inability to deliver because of changed address of which no notice
was given shall be deemed to be receipt of the notice, demand or request sent.
 
If to the Partnership:
 
Net Lease Strategic Assets Fund L.P.
c/o Lexington Realty Trust
One Penn Plaza, Suite 4015
New York, New York 10119-4015
Attention:  Chief Executive Officer
Fax No.  (212) 594-6600
 
with a copy to:
 
Inland American (Net Lease) Sub, LLC
c/o Inland American Real Estate Trust, Inc.
2901 Butterfield Road
Oak Brook, Illinois 60523
Attention:
Fax No.:  (630)
 
If to either LMLP Partner:
 
c/o Lexington Realty Trust
One Penn Plaza, Suite 4015
New York, New York 10119-4015
Attention:  Chief Executive Officer
Fax No.  (212) 594-6600
 
with a copy of any notice to:
 
Post, Heymann & Koffler LLP
Wing A, Suite 211
Two Jericho Plaza
Jericho, New York 11753
Attention:  David Heymann, Esq.
Fax No.:  (516) 433-2777
 
If to Inland:
 
Inland American (Net Lease) Sub, LLC
c/o Inland America Real Estate Trust, Inc.
2901 Butterfield Road
Oak Brook, Illinois 60523
Attention: Lori Foust and Scott Wilton
Fax No.:  (630)
 
and a copy of any
 
 
Levenfeld Pearlstein LLC
 
 

 
 
59

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notices to:
 
2 North LaSalle, Suite 1300
Chicago, Illinois 60602
Attention:  Marc Joseph and Russell Shapiro
Fax No.:  (312) 346-8434
 

 
 
(c)           Right to Change Addresses.  A Partner shall have the right from
time to time and at any time during the term of this Agreement to change its
notice address or addresses by giving to the Other Partners at least ten (10)
Business Days’ prior written notice thereof in the manner provided by this
Section 12.1.
 
Section 12.2           Governing Laws.  This Agreement and the obligations of
the Partners hereunder shall be interpreted, construed and enforced in
accordance with the laws of the State of Delaware without regard to its choice
of law provisions.  Except as otherwise provided herein, the rights and
obligations of the Partners and the administration and termination of the
Partnership shall be governed by the Act.
 
Section 12.3           Entire Agreement.  This Agreement (including the exhibits
and schedules hereto) contains the entire agreement between the parties,
supercedes any prior agreements or understandings between them and may not be
modified or amended in any manner other than pursuant to Section 12.12 hereof.
 
Section 12.4            Waiver.  No consent or waiver, express or implied, by
any Partner to or of any breach or default by any other Partner in the
performance by the other Partner of its obligations hereunder shall be deemed or
construed to be a consent or waiver to or of any other breach or default in the
performance by such other Partner of the same or any other obligations of such
other Partner hereunder.  Failure on the part of any Partner to complain of any
act or failure to act of any of the other Partners or to declare any of the
other Partners in default, irrespective of how long such failure continues,
shall not constitute a waiver by such Partner of its rights hereunder.  No
custom, practice or course of dealings arising among the Partners in the
administration hereof shall be construed as a waiver or diminution of the right
of any Partner to insist upon the strict performance by any other Partner of the
terms, covenants, agreements and conditions herein contained.
 
Section 12.5           Validity.  If any provision of this Agreement or the
application thereof to any Person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provisions to other Persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
 
Section 12.6            Terminology; Captions.  All personal pronouns used in
this Agreement, whether used in the masculine, feminine, or neuter gender, shall
include all other genders; the singular shall include the plural, and vice versa
and shall refer solely to the parties signatory hereto except where otherwise
specifically provided.  Titles of Articles, Sections, Subsections, Schedules and
Exhibits are for convenience only, and neither limit nor amplify the provisions
of the Agreement itself, and all references herein to Articles, Sections,
Subsections, Schedules and Exhibits shall refer to the corresponding Articles,
Sections, Subsections, Schedules and Exhibits of this Agreement unless specific
reference is made to such Articles, Sections, Subsections, Schedules and
Exhibits of another document or instrument.  Any
 

60

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use of the word “including” herein shall, unless the context otherwise requires,
be deemed to mean “including without limitation”.
 
Section 12.7           Remedies Not Exclusive.  Except as otherwise provided
herein, the rights and remedies of the Partnership and of the Partners hereunder
shall not be mutually exclusive, i.e., the exercise of one or more of the
provisions hereof shall not preclude the exercise of any other provisions
hereof.  Each of the Partners confirms that damages at law may be an inadequate
remedy for a breach or threatened breach of this Agreement and agrees that in
the event of a breach or threatened breach of any provision hereof, the
respective rights and obligations hereunder shall be enforceable by specific
performance, injunction or other equitable remedy but nothing herein contained
is intended to, nor shall it, limit or affect any rights or rights at law or by
statute or otherwise of any party aggrieved as against the other for breach or
threatened breach of any provision hereof, it being the intention by this
section to make clear the agreement of the Partners that the respective rights
and obligations of the Partners hereunder shall be enforceable in equity as well
as at law or otherwise.
 
Section 12.8           Action by the Partners.  No approval, consent,
designation or other action by a Partner shall be binding upon such Partner
unless the same is in writing and executed on behalf of such Partner by a duly
authorized representative of such Partner.
 
Section 12.9            Further Assurances.  Each of the Partners shall
hereafter execute and deliver such further instruments and do such further acts
and things as may be required or useful to carry out the intent and purpose of
this Agreement and as are not inconsistent with the terms hereof.
 
Section 12.10          Liability of the Limited Partners.  Each Limited
Partner’s exposure to liabilities hereunder is limited to its interest in the
Partnership.  No Limited Partner shall be personally liable for the expenses,
liabilities, debts, or obligations of the Partnership.
 
Section 12.11          Binding Effect.  Except as otherwise provided in this
Agreement, every covenant, term, and provision of this Agreement shall be
binding upon and inure to the benefit of the Partners and their respective
successors, transferees, and assigns.
 
Section 12.12          Amendments.  Except as otherwise provided in this
Agreement, this Agreement may not be amended without the written consent of all
the Partners.
 
Section 12.13          Counterparts.  This Agreement may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original, but all such counterparts together shall constitute but one and the
same instrument; signature and acknowledgment pages may be detached from
multiple separate counterparts and attached to a single counterpart so that all
signature and acknowledgement pages are physically attached to the same
document.  This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and delivery to each of the
Partners of a fully executed original counterpart of this Agreement.
 

61

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Section 12.14         Waiver of Partition.  Each of the Partners hereby
irrevocably waives any and all rights (if any) that it may have to maintain any
action for partition of any of the Qualified Assets to be acquired.
 
Section 12.15         No Third Party Beneficiaries.  Supplementing Section 5.4
hereof, nothing in this Agreement, expressed or implied, is intended to confer
any rights or remedies upon any Person, other than the Partners and, subject to
the restrictions on assignment contained herein, their respective successors and
assigns.
 
Section 12.16          Expenses. Each party hereto shall pay all of its own
legal and accounting fees and expenses incurred in connection with the formation
of the Partnership and the preparation and negotiation of this Agreement and the
agreements ancillary hereto.
 
Section 12.17          Jurisdiction; Venue. Each party hereto hereby irrevocably
and unconditionally (a) agrees that any action, suit or other legal proceeding
brought in connection with or relating to this Agreement or any matter
contemplated hereby shall be brought exclusively in a court of competent
jurisdiction located in New Castle County, Delaware, whether a state or federal
court, and shall not be brought in any court or forum outside New Castle County,
Delaware; (b) consents and submits to, and agrees that it will not assert (by
way of motion, as a defense or otherwise) that it is not subject to, personal
jurisdiction in connection with any such action, suit or proceeding in any such
court; and (c) waives to the fullest extent permitted by law, and agrees that it
will not assert (by way of motion, as a defense or otherwise), any claim that
the laying of venue of any such action, suit or proceeding in any such court is
improper or that any such action, suit or proceeding brought in any such court
was brought in an inconvenient forum or should be stayed by reason of the
pendency of some other action, suit or other legal proceeding in a court or
forum other than any such court.
 
Section 12.18         Jury Waiver. EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW, AND AGREES THAT
IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER LEGAL PROCEEDING IN CONNECTION WITH
OR RELATING TO THIS AGREEMENT OR ANY MATTER CONTEMPLATED HEREBY.
 
Section 12.19         REIT Provisions.
 
(a)           The General Partner and the Partnership shall use commercially
reasonable efforts to cause the Partnership to operate as if it were subject to
the real estate investment trust (“REIT”) rules of the Code described below,
except as otherwise permitted by prior written consent of the Partners:
 
(i)           the "75 percent gross income test" set forth in Section 856(c)(3)
of the Code and the "95 percent gross income test" set forth in Section
856(c)(2) of the Code; and
 
(ii)            the gross assets tests set forth in Section 856(c) of the Code:
(A) the "75 percent asset test" set forth in Section 856(c)(4)(A) of the Code,
(B) the "25
 

62

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percent asset test" set forth in Section 856(c)(4)(B)(i) of the Code, (C) the
"20 percent value limitation" set forth in Section 856(c)(4)(B)(ii) of the Code,
(D) the "5 percent value limitation" set forth in Section 856(c)(4)(B)(iii)(I)
of the Code and (E) the "10 percent vote and value limitations" set forth in
Sections 856(c)(4)(B)(iii)(II) and (III) of the Code.
 
For purposes of the foregoing tests, any ”mezzanine” loans secured by an equity
interest in an entity and any interest therefrom shall not be treated as
satisfying such tests unless such loans and interest are in substantial
compliance with the requirements of Revenue Procedure 2003-65, except as
otherwise permitted by prior written consent of the Partners.
 
(b)           The General Partner and the Partnership shall use commercially
reasonable efforts to cause the Partnership not to dispose of any real property
in a transaction that would be treated as a "prohibited transaction" within the
meaning of Section 857(b)(6)(B)(iii) of the Code, unless (i) the transaction
qualifies for the safe harbor, set forth in Section 857(b)(6)(C) of the Code,
applied to the Partnership as if the Partnership were subject to Section
857(b)(6), taking into account any other “safe harbor” transactions engaged in
by the respective Partner in determining whether seven sales has occurred during
the year, including any such transactions engaged in by a joint venture,
partnership or limited liability company in which such Partner invests (which
information such Partner will provide to the General Partner and Partnership
upon written request), (ii) the transaction is required under this Agreement,
(iii) the property is disposed of in connection with or in lieu of foreclosure,
(iv) the property is transferred in a tax free exchange under the Code, (v) the
Partners consent or (vi) the Executive Committee approves such transaction by a
Supermajority Vote.
 
(c)           The General Partner and the Partnership shall use commercially
reasonable efforts to cause the Partnership to make distributions to the
Partners in compliance with the “90% distribution requirement” of Section
857(a)(1) of the Code, provided that the General Partner and the Partnership
shall not be in violation of this Section 12.19(c) if:
 
(i)            the Partnership makes the distributions required by Articles 7
and 9 of this Agreement, and
 
(ii)            if the distributions required by Articles 7 and 9 of this
Agreement are insufficient to satisfy the 90% distribution requirement, the
General Partner and Partnership shall
 
(A)            notify the Partners of the insufficiency,
 
(B)           (B) notify the Partners of whether the Partnership is fully
leveraged to the extent permitted by the debt ratio set forth in Section 3.8(a)
of the Agreement (75%), and
 
(C)           (C) (1) if the Partnership’s debt ratio is below the permitted
threshold (75%), the General Partner shall not be required to incur debt to make
additional distributions unless a Partner requests it, in which case the General
Partner and the Partnership shall use commercially reasonable efforts to cause
the Partnership to incur additional debt on commercially reasonable terms in
order to make such additional distributions to the requesting Partner and (2) if
the Partnership’s debt ratio is at the maximum permitted
 

63

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 (75%), the General Partner shall not be required to incur debt to make
additional distributions unless both LMLP and Inland consent, in which case the
General Partner and the Partnership shall use commercially reasonable efforts to
cause the Partnership to incur additional debt on commercially reasonable terms
in order to make such additional distributions to both Partners.
 
If an amount otherwise available for distribution pursuant to Article 7 of the
Agreement is used to acquire an Approved Qualified Asset or fund a capital
expenditure approved by a Supermajority Vote of the Executive Committee or
consented to by the distributee Partner, such Partner’s share of such
distribution shall be treated as distributed to the Partner for purposes of
satisfying this Section 12.19(c).
 
(d)           Without limiting the foregoing, the General Partner and the
Partnership shall take such other reasonable steps as shall be requested in
writing in good faith by each Partner and its ultimate Parent entity (Inland
Real Estate Trust, Inc. in the case of Inland and Lexington Realty Trust in the
case of LMLP), which the requesting Partner and Parent believe in good faith is
necessary in order for the Parent (and, in the case of LMLP, LMLP) to continue
to qualify as a REIT (determined assuming that, without regard to its investment
in the Partnership, such ultimate Parent entity (or LMLP) otherwise would
qualify as a REIT) and no other reasonable steps or action could be taken by the
requesting Partner or Parent (in lieu of the Partnership taking any requested
steps) to enable the Parent to so qualify.
 
(e)           Notwithstanding anything to the contrary in this Agreement, in no
event shall the General Partner or Partnership have any liability to a Partner
or Affiliate with respect to its failure to qualify as a REIT so long as the
General Partner and Partnership have acted in good faith and used commercially
reasonable efforts to satisfy the obligations set forth in this Section 12.19.
 

 

 
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IN WITNESS WHEREOF, this Agreement is executed effective as of the date first
set forth above.
 
LMLP GP
 
LMLP GP LLC
By:   /s/ T. Wilson Eglin                                 
        Name: T. Wilson Eglin
        Title: President
 
LMLP
 
THE LEXINGTON MASTER LIMITED PARTNERSHIP
 
By: Lex GP-1 Trust, its general partner
 
By:   /s/ T. Wilson Eglin                                 
        Name: T. Wilson Eglin
        Title: President
 
INLAND
 
INLAND AMERICAN (NET LEASE) SUB, LLC
 
By: Inland American Real Estate Trust, Inc.
 
By: /s/ Lori Foust                                            
      Name:  Lori Foust
      Title:  Treasurer
 
The undersigned hereby unconditionally and irrevocably
guarantees the obligations of Inland American (Net Lease)
Sub, LLC under Sections 3.10(c), 3.11, 3.12 and 5.1:
 
INLAND AMERICAN REAL ESTATE TRUST, INC.
 
By: _/s/ Lori Foust_________________
      Name: Lori Foust
      Title: Treasurer
 

65

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SCHEDULE 1

 
Capital Commitment; Initial Capital Contribution; Percentage Interest

Partner Name
 
 
Capital
Commitment
 
 
Initial Capital Contribution
 
Percentage
Interest
 
 
    The Lexington Master Limited Partnership
 
$22,500,000.00
 
$[________]
 
15.00%
 
    LMLP GP LLC
 
$0.00
 
$0.00
 
0.00%
 
    Inland American (Net Lease) Sub, LLC
 
$127,500,000.00
 
$[________]
 
85.00%
 

 
 

Preferred Equity Capital Contribution
 
Partner Name
 
Tenant
 
Address
 
Preferred Equity
Capital Contribution
 
The Lexington Master Limited Partnership
 
American Electric Power
 
420 Riverport Road, Kingport, Tennessee
 
 
The Lexington Master Limited Partnership
 
Entergy Services, Inc.
 
5201 W. Barraque Street, Pine Bluff, Arkansas
 
 
The Lexington Master Limited Partnership
 
Lithia Motors
 
101 Creger, Fort Collins, Colorado
 
 
The Lexington Master Limited Partnership
 
Raytheon Company
 
1200 Jupiter Road, Garland, Texas
 
 
The Lexington Master Limited Partnership
 
United Technologies Corp.
 
120 S.E. Parkway Drive, Franklin, Tennessee
 
 
The Lexington Master Limited Partnership
 
Wachovia Bank, N.A.
 
265 Lehigh Street, Allentown, Pennsylvania
 
 
The Lexington Master Limited Partnership
 
Advance PCS, Inc.
 
2401 Cherahala Boulevard, Knoxville, Tennessee
 
 
The Lexington Master Limited Partnership
 
American Golf Corporation
 
11411 N. Kelly Avenue, Oklahoma City, Oklahoma
 
 
The Lexington Master Limited Partnership
 
ASML Lithography Holding NV
 
8555 South River Parkway, Tempe, Arizona
 
 
The Lexington Master Limited Partnership
 
AT&T Wireless Services, Inc.
 
3201 Quail Springs Parkway, Oklahoma City, Oklahoma
 
 
The Lexington Master Limited Partnership
 
Baker Hughes, Inc.
 
9110 Grogans Mill Road, Houston, Texas
 
 
The Lexington Master Limited Partnership
 
Baker Hughes, Inc.
 
2529 West Thorne Drive, Houston, Texas
 
 

SCHEDULE 1-1
 

--------------------------------------------------------------------------------

 
The Lexington Master Limited Partnership
 
Baker Hughes, Inc.
 
12645 West Airport Road, Sugarland, Texas
 
 
The Lexington Master Limited Partnership
 
Bay Valley Foods, LLC
 
2935 Van Vactor Way, Plymouth, Indiana
 
 
The Lexington Master Limited Partnership
 
CAE Simuflite, Inc. (CAE Inc.)
 
29 South Jefferson Road, Hanover, New Jersey
 
 
The Lexington Master Limited Partnership
 
Corning, Inc.
 
736 Addison Road, Erwin, New York
 
 
The Lexington Master Limited Partnership
 
Cox Communications, Inc.
 
1440 East 15th Street, Tucson, Arizona
 
 
The Lexington Master Limited Partnership
 
Dana Corporation
 
6938 Elm Valley Drive, Kalamazoo, Michigan
 
 
The Lexington Master Limited Partnership
 
Dana Corporation
 
730 North Black Branch Road, Elizabethtown, Kentucky
 
 
The Lexington Master Limited Partnership
 
Dana Corporation
 
750 North Black Branch Road, Elizabethtown, Kentucky
 
 
The Lexington Master Limited Partnership
 
Dana Corporation
 
10000 Business Boulevard, Dry Ridge, Kentucky
 
 
The Lexington Master Limited Partnership
 
Dana Corporation
 
301 Bill Byran Boulevard, Hopkinsville, Kentucky
 
 
The Lexington Master Limited Partnership
 
Dana Corporation
 
4010 Airpark Drive, Owensboro, Kentucky
 
 
The Lexington Master Limited Partnership
 
EDS Information Services, LLC (Electronic Data Systems Corporation)
 
3600 Army Post Road, Des Moines, Iowa
 
 
The Lexington Master Limited Partnership
 
Georgia Power Company
 
2500 Patrick Henry Parkway, McDonough, Georgia
 
 
The Lexington Master Limited Partnership
 
Honeywell, Inc.
 
19019 N. 59th Avenue, Glendale, Arizona
 
 
The Lexington Master Limited Partnership
 
(i)Structure, LLC (Infocrossing, Inc.)
 
11707 Miracle Hills Drive, Omaha, Nebraska
 
 
The Lexington Master Limited Partnership
 
(i)Structure, LLC (Infocrossing, Inc.)
 
2005 East Technology Circle, Tempe, Arizona
 
 
The Lexington Master Limited Partnership
 
Ivensys Systems, Inc. (Siebe, Inc.)
 
70 Mechanic Street, Foxboro, Massachusetts
 
 
The Lexington Master Limited Partnership
 
Kelsey Hayes Company (TRW Automotive)
 
1200 & 12025 Tech Center Drive, Livonia, Michigan
 
 
The Lexington Master Limited Partnership
 
Kelsey-Seybold Clinic (St. Lukes Episcopal Health System)
 
11555 University Boulevard, Houston, Texas
 
 
The Lexington Master Limited Partnership
 
Litton Loan Servicing L.P. (Credit-Based Asset Servicing and Securitization LLC)
 
3500 North Loop Court, McDonough, Georgia
 
 

 
 
 

--------------------------------------------------------------------------------

 
 
The Lexington Master Limited Partnership
 
Montgomery County Management, LLC
 
17191 St. Lukes Way, Woodlands, Texas
 
 
The Lexington Master Limited Partnership
 
Nextel of Texas
 
1600 Eberhardt Road, Temple, Texas
 
 
The Lexington Master Limited Partnership
 
Nextel West Corporation
 
6455 State Highway 303 N.E., Bremerton, Washington
 
 
The Lexington Master Limited Partnership
 
Northrop Grumman Systems Corp.
 
3943 Denny Avenue, Pascagoula, Mississippi
 
 
The Lexington Master Limited Partnership
 
Omnipoint Holdings, Inc. (T-Mobile USA, Inc.)
 
133 First Park Drive, Oakland, Maine
 
 
The Lexington Master Limited Partnership
 
Owens Corning
 
590 Ecology Lane, Chester, South Carolina
 
 
The Lexington Master Limited Partnership
 
Owens Corning
 
1901 49th Avenue, Minneapolis, Minnesota
 
 
The Lexington Master Limited Partnership
 
Parkway Chevrolet, Inc.
 
25500 SH 249, Tomball, Texas
 
 
The Lexington Master Limited Partnership
 
Seimens Dematic Postal Automation
 
1404-1501 Nolan Ryan Parkway, Arlington, Texas
 
 
The Lexington Master Limited Partnership
 
Silver Spring Gardens, Inc. (Huntsinger Farms, Inc.)
 
2424 Alpine Road, Eau Claire, Wisconsin
 
 
The Lexington Master Limited Partnership
 
SKF USA Inc.
 
324 Industrial Park Road, Franklin, North Carolina
 
 
The Lexington Master Limited Partnership
 
Sygma Network, Inc. (Sysco Corporation)
 
3600 Southgate Drive, Danville, Illinois
 
 
The Lexington Master Limited Partnership
 
Tenneco Automotive Operation Company (Tenneco Automotive Inc.)
 
904 Industrial Road, Marshall, Michigan
 
 
The Lexington Master Limited Partnership
 
TI Group Automotive Systems, LLC (TI Automotive LTD)
 
359 Gateway Drive, Livonia, Georgia
 
 
The Lexington Master Limited Partnership
 
Time Customer Service, Inc. (Time, Inc.)
 
10419 North 30th Street, Tampa, Florida
 
 
The Lexington Master Limited Partnership
 
TRW, Inc. (Experian Information Solutions, Inc.)
 
601 & 701 Experian Parkway, Allen, Texas
 
 
The Lexington Master Limited Partnership
 
Unisource Worldwide, Inc.
 
109 Stevens Street, Jacksonville, Florida
 
 
The Lexington Master Limited Partnership
 
Voicestream PCS I (T-Mobile USA, Inc.)
 
2999 S.W. 6th Street, Redmond, Oregon
 
 
The Lexington Master Limited Partnership
 
Voicestream PCS II (T-Mobile USA, Inc.)
 
9601 Renner Boulevard, Lenexa, Kansas
 
 
The Lexington Master Limited Partnership
 
Voicestream PCS II (T-Mobile USA, Inc.)
 
3265 East Goldstone Drive, Meridian, Idaho
 
 
The Lexington Master
 
Voicestream PCS II (T-
 
3711 San Gabrial, Mission, Texas
 
 

 
 
 

--------------------------------------------------------------------------------

 
Limited Partnership
 
Mobile USA, Inc.)
 
 
 
 

 
 
Qualified Contribution Assets
 
Property (defined in Contribution Agreement)
 
     
Primary Tenant
 
Address
 
Existing Indebtedness
 
Contributed Asset (defined
in Contribution
Agreement)
 
Fee Interest
 
American Electric Power
 
420 Riverport Road, Kingport, Tennessee
 
--
 
    Fee Interest
 
Fee Interest
 
Entergy Services, Inc.
 
5201 W. Barraque Street, Pine Bluff, Arkansas
 
--
 
    Fee Interest
 
Fee Interest
 
Lithia Motors
 
101 Creger, Fort Collins, Colorado
 
--
 
    Fee Interest
 
Fee Interest
 
Raytheon Company
 
1200 Jupiter Road, Garland, Texas
 
--
 
100% interest in Chader Associates LLC and 60% limited partnership interest in
Eastgar Associates Limited Partnership
 
Ground Lease
 
United Technologies Corp.
 
120 S.E. Parkway Drive, Franklin, Tennessee
 
--
 
 
Fee Interest
 
Wachovia Bank, N.A.
 
265 Lehigh Street, Allentown, Pennsylvania
 
--
 
 

--------------------------------------------------------------------------------

SCHEDULE 2
 
Acquisition Parameters

Required Parameters

·
Single tenant, net leased, commercial real estate properties in the office,
retail and industrial sectors.

 
·
Real estate properties that have a specialized use, design or other feature
providing for higher initial capitalization rates than those of more
conventional net leased assets.

 
·
Not less than $15,000,000 nor greater than $75,000,000 in total acquisition
costs.

 
·
Real estate properties that are fully occupied and rent bearing at purchase.

 
·
Tenants are solvent.

 
·
Real estate properties that have strategic value and/or are mission critical to
tenant’s business.

 
 
 
 

Schedule 2-1    

 

--------------------------------------------------------------------------------

SCHEDULE 2.8
 
Qualified Sale Assets
 
Property (defined in Purchase Agreement)
 
       
Primary Tenant
 
Address
 
Existing
Indebtedness
 
Sold Assets (defined in Purchase
Agreement)
 
LMLP Sale Affiliate
 
Fee interest
Advance PCS, Inc.
 
2401 Cherahala Boulevard, Knoxville, Tennessee
 
$5,054,329.68
100% membership interest in Lexington Knoxville Manager LLC
Lexington Tennessee Holdings L.P.
Fee interest
 
American Golf
Corporation
 
11411 N. Kelly Avenue, Oklahoma City, Oklahoma
 
--
 
100% membership interest in LSAC Oklahoma City Manager LLC and 100 limited
partnership interest in LSAC Oklahoma L.P.
 
LSAC Operating Partnership L.P.
 
Leasehold interest
 
ASML Lithography Holding NV
 
8555 South River Parkway, Tempe, Arizona
 
$13,415,219.10
 
100% membership interest in Lexington Tempe Manager LLC and 100% limited
partnership interest in Lexington Tempe L.P.
 
Lexington Contributions, Inc.
 
40% tenancy-in-common interest
 
AT&T Wireless Services, Inc.
 
3201 Quail Springs Parkway, Oklahoma City, Oklahoma
 
$14,748,872.00
 
100% membership interest in Lexington Oklahoma City Manager LLC and 100% limited
partnership interest in Lexington Oklahoma City L.P.
 
Lexington TIC OK Holdings L.P.
 
Fee interest
 
Baker Hughes, Inc.
 
9110 Grogans Mill Road, Houston, Texas
 
$23,650,170.60
 
Fee interest
 
Texan Christensen Limited Partnership
 
Fee interest
 
Baker Hughes, Inc.
 
2529 West Thorne Drive, Houston, Texas
 
$7,217,561.16
 
Fee interest
 
Texan Training Limited Partnership
 
Fee interest
 
Baker Hughes, Inc.
 
12645 West Airport Road, Sugarland, Texas
 
$16,371,694.47
 
Fee interest
 
Texan Petrolite Limited Partnership
 
Fee interest
 
Bay Valley Foods, LLC
 
2935 Van Vactor Way, Plymouth, Indiana
 
$6,609,133.18
 
100% membership interest in LSAC Plymouth Manager LLC and 100% limited
partnership interest in LSAC Plymouth L.P.
 
LSAC Operating Partnership L.P.
 
Fee interest
 
CAE Simuflite, Inc.
 
29 South Jefferson Road, Hanover, 
 
$16,719,188.84
 
100% membership interest in LSAC Morris County Manager
 
Partnership L.P.
 

 
 
Schedule 2.8-1

--------------------------------------------------------------------------------

 
 
 
 
(CAE Inc.)
 
New Jersey
 
 
 
LLC and 99.9% limited partnership interest in LSAC Morris County L.P.
 
Partnership L.P.
 
Fee interest
 
Corning, Inc.
 
736 Addison Road, Erwin, New York
 
$9,357,883.09
 
100% membership interest in Lexington TNI Erwin Manager LLC and 100% limited
partnership interest in Lexington TNI Erwin L.P.
 
Triple Net Investment Company LLC
 
Fee interest
 
Cox Communications,
Inc.
 
1440 East 15th Street, Tucson, Arizona
 
$2,275,658.74
 
100% membership interest in Net 2 Cox LLC
 
Net 3 Acquisition  L.P.
 
Fee interest
 
Dana Corporation
 
6938 Elm Valley Drive, Kalamazoo, Michigan
 
$17,340,367.78
 
100% membership interest in Lexington Kalamazoo Manager LLC and 100% limited
partnership interest in Lexington Kalamazoo L.P.
 
Lepercq Corporate Income Fund L.P.
 
Leasehold interest
 
Dana Corporation
 
730 North Black Branch Road, Elizabethtown, Kentucky
 
$4,694,433.14
 
100% interest in to be formed SP Subsidiary
 
Lexington Elizabethtown 730 Corp.
 
Leasehold interest
 
Dana Corporation
 
750 North Black Branch Road, Elizabethtown, Kentucky
 
$24,923,414.82
 
100% interest in to be formed SP Subsidiary
 
Lexington Elizabethtown 750 Corp.
 
Leasehold interest
 
Dana Corporation
 
10000 Business Boulevard, Dry Ridge, Kentucky
 
$11,805,918.47
 
100% interest in to be formed SP Subsidiary
 
Lexington Dry Ridge Corp.
 
Leasehold interest
 
Dana Corporation
 
301 Bill Byran Boulevard, Hopkinsville, Kentucky
 
$14,603,212.19
 
100% interest in to be formed SP Subsidiary
 
Lexington Hopkinsville Corp.
 
Leasehold interest
 
Dana Corporation
 
4010 Airpark Drive, Owensboro, Kentucky
 
$10,558,679.56
 
100% interest in to be formed SP Subsidiary hold interest
 
Lexington Realty Trust
 
Fee interest
 
EDS Information Services, LLC (Electronic Data Systems Corporation)
 
3600 Army Post Road, Des Moines, Iowa
 
$22,761,297.00
 
100% membership interest in Lexington TNI Des Moines Manager LLC and 100%
limited partnership interest in Lexington TNI Des Moines L.P.
 
Triple Net Investment Company LLC
 
Fee interest
Georgia Power Company
 
2500 Patrick Henry Parkway, McDonough, Georgia
 
$12,675,000.00
100% membership interest in Acquiport McDonough Manager LLC and 100% limited
partnership
Lexington Acquiport Company II, LLC

Schedule 2.8-1
 
 
 

--------------------------------------------------------------------------------

 
 
 
 
 
 
 
 
 
 
interest in Acquiport McDonough L.P.
 
 
 
Fee interest
 
Honeywell, Inc.
 
19019 N. 59th Avenue, Glendale, Arizona
 
$14,149,680.39
 
100% interest in Lexington Manager Glendale LLC
 
Union Hills Associates
 
Fee interest
 
(i)Structure, LLC (Infocrossing, Inc.)
 
11707 Miracle Hills Drive, Omaha, Nebraska
 
$8,850,197.37
100% membership interest in LSAC Omaha Manager LLC and 100% limited partnership
interest in LSAC Omaha L.P.
 
LSAC Operating Partnership L.P.
Leasehold interest
 
(i)Structure, LLC (Infocrossing, Inc.)
 
2005 East Technology Circle, Tempe, Arizona
 
$8,358,519.58
 
100% membership interest in LSAC Tempe Manager LLC and 100% limited partnership
interest in LSAC Tempe L.P.
 
LSAC Operating Partnership L.P.
Fee interest
 
Ivensys Systems, Inc. (Siebe, Inc.)
 
70 Mechanic Street, Foxboro, Massachusetts
 
$14,090,991.79
 
Fee interest
 
Lepercq Corporate Income Fund L.P.
Fee interest
 
Kelsey Hayes Company (TRW Automotive)
 
1200 & 12025 Tech Center Drive, Livonia, Michigan
 
$10,520,436.70
 
100% interest in Lexington Livonia L.L.C.
 
Lepercq Corporate Income Fund L.P.
Fee interest
Kelsey-Seybold Clinic (St. Lukes Episcopal Health System)
 
11555 University Boulevard, Houston, Texas
 
$9,788,652.45
100% membership interest in Lexington Sugarland Manager LLC and 100% limited
partnership interest in Lexington Sugarland L.P.
Westport View Corporate Center L.P.
Fee interest (currently under contract)
 
Litton Loan Servicing L.P. (Credit-Based Asset Servicing and Securitization LLC)
 
3500 North Loop Court, McDonough, Georgia
 
--
 
100% membership interest in NLSAF McDonough Manager LLC and 100% limited
partnership interest in NLSAF McDonough L.P.
 
Lexington Realty Trust
 
Fee interest
 
Montgomery County Management, LLC
 
17191 St. Lukes Way, Woodlands, Texas
 
$7,500,000.00
 
100% membership interest in LSAC Woodlands Manager LLC and 100% limited
partnership interest in LSAC Woodlands L.P.
 
LSAC Operating Partnership L.P.
 
Fee interest
 
Nextel of Texas
 
1600 Eberhardt Road, Temple, Texas
 
$8,799,283.19
 
100% membership interest in Lexington Temple Manager LLC (current Lexington
Temple Trust) and 99% limited partnership
 
Lexington Realty Trust
 

Schedule 2.8-3
 
 

--------------------------------------------------------------------------------

 
 
 
 
 
 
 
 
 
interest in Lexington Temple L.P.
 
 
Fee interest
 
Nextel West Corporation
 
6455 State Highway 303 N.E., Bremerton, Washington
 
$6,503,818.18
 
100% membership interest in Lexington Bremerton Manager LLC
 
Lexington Realty Trust
 
Fee interest
 
Northrop Grumman Systems Corp.
 
3943 Denny Avenue, Pascagoula, Mississippi
 
--
 
100% membership interest in LSAC Pascagoula Manager LLC and 100% limited
partnership interest in LSAC Pascagoula L.P.
 
LSAC Operating Partnership L.P.
 
Fee interest
 
Omnipoint Holdings, Inc. (T-Mobile USA, Inc.)
 
133 First Park Drive, Oakland, Maine
 
$10,270,681.91
 
100% membership interest in Acquiport Oakland Manager LLC and 100% limited
partnership interest in Acquiport Oakland L.P.
 
Lexington Acquiport Company II, LLC
 
Fee interest
 
Owens Corning
 
590 Ecology Lane, Chester, South Carolina
 
$13,197,624.67
 
100% interest in a to be formed SP Subsidiary and 100% interest in Lexington
Chester Industrial LLC
 
Lexington Realty Trust
 
Fee interest
 
Owens Corning
 
1901 49th Avenue, Minneapolis, Minnesota
 
--
 
100% membership interest in Lexington Minneapolis L.L.C.
 
Lepercq Corporate Income Fund L.P.
 
Fee interest
 
Parkway Chevrolet, Inc.
 
25500 SH 249, Tomball, Texas
 
$9,344,673.76
 
100% membership interest in LSAC Tomball Manager LLC and 100% limited
partnership interest in LSAC Tomball L.P.
 
LSAC Operating Partnership L.P.
 
Fee interest
 
Seimens Dematic Postal Automation
 
1404-1501 Nolan Ryan Parkway, Arlington, Texas
 
$21,010,306.55
 
100% membership interest in Lexington Arlington Manager LLC and 99.5% limited
partnership interest in Lexington Arlington L.P.
 
Lexington Acquiport Company II, LLC
 
Fee interest
 
Silver Spring Gardens, Inc. (Huntsinger Farms, Inc.)
 
2424 Alpine Road, Eau Claire, Wisconsin
 
--
 
100% membership interest in LSAC Eau Claire Manager LLC and 100% limited
partnership interest in LSAC Eau Claire L.P.
 
LSAC Operating Partnership L.P.
 
Fee interest
 
SKF USA Inc.
 
324 Industrial Park Road, Franklin, North Carolina
 
$1,508,477.25
 
Fee interest
 
Lexington Realty Trust
 
Fee interest
Sygma Network, Inc. (Sysco Corporation)
 
3600 Southgate Drive, Danville, Illinois
 
$6,217,205.68
100% membership interest in Lexington Danville LLC
Lexington Realty Advisors, Inc.

Schedule 2.8-4
 
 

--------------------------------------------------------------------------------

 
Fee interest
 
Tenneco Automotive Operation Company (Tenneco Automotive
Inc.)
 
904 Industrial Road, Marshall, Michigan
 
--
 
Fee interest
 
LXP I, L.P.
 
Leasehold interest
 
TI Group Automotive Systems, LLC (TI Automotive LTD)
 
359 Gateway Drive, Livonia, Georgia
 
$9,781,993.46
 
100% membership interest in Lexington Livonia TI Manager LLC and 100% limited
partnership interest in Lexington Livonia TI L.P.
 
LSAC Operating Partnership L.P.
 
Fee interest
 
Time Customer Service, Inc. (Time, Inc.)
 
10419 North 30th Street, Tampa, Florida
 
$7,978,117.35
 
Fee interest
 
North Tampa Associates
 
Fee interest
 
TRW, Inc. (Experian Information Solutions,
Inc.)
 
601 & 701 Experian Parkway, Allen, Texas
 
$30,582,338.00
 
100% membership interest in Lexington Allen Manager LLC and 100% limited
partnership interest in Lexington Allen L.P.
 
Lexington Texas Holdings L.P.
 
Fee interest
 
Unisource Worldwide,
Inc.
 
109 Stevens Street, Jacksonville, Florida
 
--
 
Fee interest
 
Lepercq Corporate Income Fund II L.P.
 
Fee interest
 
Voicestream PCS I (T-Mobile USA, Inc.)
 
2999 S.W. 6th Street, Redmond, Oregon
 
$9,654,317.77
 
100% membership interest in Lexington Redmond Manager LLC
 
Lepercq Corporate Income Fund II L.P.
 
Fee interest
 
Voicestream PCS II (T-Mobile USA, Inc.)
 
9601 Renner Boulevard, Lenexa, Kansas
 
$10,141,927.70
 
100% membership interest in Acquiport Lenexa Manager LLC
 
Lexington Acquiport Company II, LLC
 
Fee interest
 
Voicestream PCS II (T-Mobile USA, Inc.)
 
3265 East Goldstone Drive, Meridian, Idaho
 
$10,079,315.38
 
100% membership interest in Acquiport Meridian Manager LLC
 
Lexington Acquiport Company II, LLC
 
Fee interest
 
Voicestream PCS II (T-Mobile USA, Inc.)
 
3711 San Gabrial, Mission, Texas
 
$6,282,487.42
 
100% membership interest in Lexington Mission Manager LLC and 99.5% limited
partnership interest in Lexington Mission L.P.
 
Triple Net Investment Company LLC
 

Schedule 2.8-5

--------------------------------------------------------------------------------

 
SCHEDULE 3.5

 
Form of Annual Plan
 
[Intentionally omitted from filing]

--------------------------------------------------------------------------------

SCHEDULE 3.8

 
Cross-Default Provisions
 
The mortgages secured by the following two sets of two properties are
cross-collateralized: (1) 730 North Black Branch Road, Elizabethtown, Kentucky
and 730 North Black Branch Road, Elizabethtown, Kentucky, and (3) 1000 Business
Boulevard, Dry Ridge, Kentucky and 4010 Airpark Drive, Owensboro, Kentucky.
 
 
 

 
Schedule 3.8-1

--------------------------------------------------------------------------------

SCHEDULE 3.9

 
LMLP Existing Joint Venture Exclusivity Terms

Lex-Win Acquisition LLC– exclusive vehicle through which LMLP and its Affiliates
will enter into any transaction or acquire directly or indirectly, any shares of
common stock of Wells Real Estate Investment Trust, Inc. (“Wells”), any interest
in Wells or any asset owned by Wells.
 
 

 
 
Schedule 3.9-1

--------------------------------------------------------------------------------

SCHEDULE 4.7

 
INSURANCE REQUIREMENTS
 
EXHIBIT C
 
INSURANCE REQUIREMENTS
 
The Partnership shall, at a minimum, obtain and maintain, and/or cause the SP
Subsidiaries to obtain and maintain, without interruption, the insurance
coverages stipulated hereunder for the benefit of the Partnership and each
Partner thereof, but only to the extent of such party’s interest in each
Qualified Asset:
 
(a)           Property and Related Insurance.
 
(i)           Qualified Assets.  At all times following commencement of
construction of any above-ground improvements thereon, each Qualified Asset
shall be insured on a 100% Full Replacement Cost basis.  Full Replacement Cost
is defined as the cost of replacing the improvements, together with
appurtenances and betterments in compliance with prevailing building codes,
without deduction for physical depreciation thereof, at the time of replacement
of the Qualified Asset, following a loss.  The value so determined shall be
binding and conclusive.  The policy shall further provide that, in the event of
a total or constructive total loss, the Partnership or SP Subsidiary shall not
be unreasonably restricted from applying the proceeds to the re-building of the
improvements at such other location as the Partnership shall elect.  At all
times following commencement of construction of any vertical improvements
thereon, Qualified Assets shall be insured against physical loss or damage by
fire, lightning and other risks and supplementary perils from time to time
included under Special Form policies including, vandalism and malicious mischief
(with agreed amount endorsements), windstorm, earthquake, and certified and
non-certified acts of terrorism.  The policy shall be endorsed to provide
coverage for demolition and increased cost of construction to conform to local
ordinance, and will include “extra expense” and “expediting expense” coverage.
 
(ii)           Rent Loss/Business Interruption.  The Partnership shall maintain,
after substantial completion of any above-ground improvements, rent
loss/business interruption insurance sufficient to prevent the Partnership or
the SP Subsidiary from being a coinsurer under the terms of the policy, and in
an amount equal to twelve months’ projected gross income from the Qualified
Asset.  The policy must contain an extended period of indemnity endorsement
which provides that after the loss to the Improvements and personal property has
been repaired, the continued loss of income will be insured until the earlier of
such time that such income returns to the same level it was prior to the loss or
the expiration of six (6) months from the date of restoration.  This requirement
shall apply in the event the Partnership, by upon approval of the Executive
Committee by a Supermajority vote,, has elected to offer all or any portion of
the Qualified Asset for rent pursuant to leases or other occupancy agreements.
 
(iii)           Boiler and Machinery.  The Partnership or the SP Subsidiary
shall maintain, after substantial completion of any above-ground improvements,
boiler and machinery insurance covering physical damage to the Qualified Asset
and to the major components of any central heating, air conditioning or
ventilation systems, and such other equipment as is usual for similar properties
in the area.  The policy shall include coverage for business interruption,
including expediting and extra expense, in an amount not less than
$500,000.  Unless the insurance required in subsections (a) (i), (iii) and (iv)
is provided on the same policy or by the same insurance carrier, a Joint Loss
Agreement between separate primary policies will be required.
 
 
 
Schedule 4.7-1

--------------------------------------------------------------------------------

(iv)           Builder’s Risk.  During the period of any construction, repair,
renovation, restoration or replacement of the improvements or the Qualified
Asset, the Partnership shall obtain and maintain or cause to be obtained and
maintained a completed value “All Risk” Builder’s Risk policy in an amount equal
to one hundred percent (100%) of the replacement cost of the Qualified
Asset.  Coverage should include, but not be limited to, collapse, soft costs,
transit, earthquake, flood, windstorm, terrorism, off-site storage, expediting
expenses, demolition and increased cost of construction (for renovation and/or
additions to existing structures), water damage, permission for partial
occupancy, and automatic reinstatement.  The policy is to be in an amount not
less than the total value of the Qualified Asset (less the value of such
uninsurable items as land, site preparation, grading, paving, parking
lots).  The coverage may be provided as an extension to the property policy in
force if the requirements herein are satisfied, subject to approval by the
Partners of the Partnership.  The Partnership shall cause the contracts with any
contractors to provide that (i) such contractor will be responsible for claims
arising out of such contractor’s negligence, and (ii) except to the extent that
such contractor’s tools and equipment will become part of the job, such tools
and equipment shall not be considered insurable items.
 
(v)           Flood.  If the Qualified Asset is located in a federally
designated flood zone A or V and flood insurance has been made available under
the National Flood Insurance Act of 1968, flood insurance is required in an
amount equal to maximum coverage available, replacement cost, or such amount as
a mortgage lender  may require.
 
(vi)           Earthquake.  If a Qualified Asset is in an area identified by any
governmental, engineering or any hazard underwriting agencies as being subject
to the peril of earthquake, and the project is in a high-risk seismic area
denoted as Zones 3 and 4 under the Uniform Building Code (UBC), appropriate
earthquake insurance coverage as required by lender is required.
 
(b)           Liability.
 
(i)           The Partnership and the SP Subsidiaries shall obtain and maintain
Commercial General Liability insurance on the broadest forms available for
similar risks, written on an “occurrence policy form,” against all claims for
bodily injury, disease or death, property damage, personal injury, certified and
non-certified acts of terrorism products and completed operations, and
contractual liability (deleting any exclusion restricting coverage for
contractual obligations for claims occurring on, in or about the Qualified Asset
and adjoining premises, and for explosion, collapse, and underground property
damage) in an amount of not less than $5,000,000 arising out of any one
occurrence; provided, however that coverage for explosion, collapse, and
underground property damage shall not be required until such time as any
excavation at the Qualified Asset commences, and may be in the form of coverage
carried by the applicable contractor.  Such insurance may be provided under a
primary and an umbrella policy or policies, provided that such umbrella policy
or policies shall not exclude “real estate activities.”  If liability coverage
for any Qualified Asset procured by the contractor is included under any blanket
policy written on an aggregate form, then the annual aggregate limit of
insurance must apply per location.  The policy shall be endorsed to include the
SP Subsidiary, the Partnership, the lender and each Partner thereof as an
additional insured subject to the benefits stipulated under subsection (i)(iv)
hereof. Such insurance will be endorsed as primary and non-contributory with any
other insurance available to the SP Subsidiary, the Partnership, the lender and
each Partner.
 
(ii)           During any period of construction, repair, restoration,
renovation or replacement of the Qualified Asset, the Partnership shall cause
the general contractor to maintain commercial liability insurance (or the
Partnership’s or SP Subsidiary’s and Contractor’s protective liability insurance
in the name of the Partnership or SP Subsidiary and each Partner thereof), with
extension for, but not limited to, products/completed operations, with limits of
not less than $10,000,000 per occurrence.  Completed Operations insurance shall
remain in effect for the length of time statutorily required in the state in
which
 
 
Schedule 4.7-2

--------------------------------------------------------------------------------

the construction occurs. This coverage shall be maintained as was agreed to at
the time of substantial completion of the Qualified Asset and shall be for the
same limits as required above. The Partnership shall also cause the general
contractor to require its subcontractors of any tier to provide confirmation of
commercial liability coverage (including products/completed operations), and
such insurance shall be on a primary and non-contributory basis with a limit of
not less than $1,000,000 per Qualified Asset.  The general contractors and the
subcontractors shall have the Partnership and the SP Subsidiary included on the
insurance required herein as additional insureds.
 
(c)           Worker’s Compensation.  The Partnership and the SP Subsidiaries
will maintain Worker’s Compensation as statutorily required and Employer’s
Liability insurance, or their equivalent, for all of their respective employees,
and will cause any of their agents, contractors and subcontractors of any tier
to maintain similar insurance for all their respective employees, to the fullest
extent required under the laws of the jurisdiction in which a Qualified Asset is
located.
 
(d)           Errors and Omission.  The Partnership will cause any professional
consultants, including, but not limited to, architects and engineers, to
maintain coverage in limits of not less than $1,000,000.
 
(e)           Crime.  The Partnership will maintain crime insurance in an amount
of not less than $1,000,000 for the benefit of the Partnership and each Partner
thereof against loss caused by infidelity of its officers, agents, servants and
employees; and against robbery or burglary both on and off premises.
 
(f)           Other Insurance.  In addition to the above, the Partnership and
the SP Subsidiaries shall maintain all insurance, surety and fidelity bonds in
amounts and for such periods that are deemed to be prudent, or are customarily
maintained by persons or entities operating properties of like kind,
construction and occupancy in the locality of each Qualified Asset.  Compliance
with insurance requirements will not in itself be construed to be a limitation
of the Partnership’s or the SP Subsidiaries’ liability.
 
(g)           All Insurance.  All insurance required herein will be primary and
not excess over, contributory or participating with any other insurance carried
by individual Partners of the Partnership or their respective affiliates or
agents.
 
(h)           Other Requirements With Respect to Insurance.  The following
provisions shall apply with respect to all insurance coverage required above:
 
(i)           Insurance Companies:  All insurance required herein shall be
issued by insurance companies of recognized good standing, with a rating of at
least A-VII in Best’s Key Rating Guide, except for loans in excess of
$35,000,000 where required by lender and in in such case a rating of at lease
AVII in Best’s Key Rating Guide, and must be licensed to do business in the
state in which the Qualified Asset is located or must otherwise be acceptable to
the Partnership.  Insurance ratings are subject to the approval of mortgagee.
Coverage under blanket policies may be extended by endorsements provided the
insurers meet the requirements stipulated herein.  Each policy shall not have
more than a $25,000 deductible for any occurrence, except for mandatory
deductibles where required under local regulations, or when required by insurers
for specific catastrophic perils, or with respect to flood insurance pursuant to
Section (a)(v) which deductible shall not exceed $250,000 for any occurrence. An
allowance for deductibles in excess of $25,000 on all-risk policies will be
allowed upon the approval of mortgagee, but in any event cannot exceed $100,000.
 
(ii)           Evidence of Insurance:  The Partnership or the SP Subsidiaries
shall obtain, before the expiration date of each such policy, original policies
(or renewals or extensions of the insurance afforded thereby) or certified
duplicates thereof, or binders evidencing such insurance, or
 
 
Schedule 4.7-3

--------------------------------------------------------------------------------

endorsements, or certificates thereof.  Evidence of Property insurance shall be
on ACORD 28 forms acceptable to lenders and naming lender as mortgagee and loss
payee.  Certificates of General Liability shall be on ACORD 25 forms and shall
name lender as additional insured.
 
(iii)           Insurance (Cut-Through Endorsement).  Except to the extent
prohibited by applicable law, insurance placed with a non-admitted insurer or
excess and surplus lines insurer will (upon written request of the Partners)
require a “cut-through” endorsement for reinsurance purposes to allow for
recovery directly from a reinsurer in the event of the primary insurer’s
insolvency or cessation of insurance operations. This will be addressed on a
case by case basis, dependent on the insurance carriers involved.
 
(iv)           Cancellation:  The Partnership shall immediately notify each
Partner of the Partnership of any cancellation of, non-renewal, or such material
change as may adversely affect any insurance policy or coverage in force.  Each
policy shall contain a provision obligating the insurer to send at least thirty
(30) days’ prior written notice to any party included as an additional insured
or loss payee notifying them of the intent to cancel or make such change, and
that any loss otherwise payable to them thereunder shall be paid notwithstanding
any act or negligence on their part or that of the Partnership which might,
absent such provision, result in a forfeiture of all or part of such insurance
payment.
 
(v)           Separate Insurance:  Without the prior written consent of all
Partners of the Partnership, neither the Partnership not any SP Subsidiary shall
purchase separate insurance concurrent in form or contributing in the event of
loss, with the insurance required hereunder.
 
(vi)           Payment of Premium.  The Partnership or the applicable SP
Subsidiary shall be solely responsible for, and promptly pay when due, any and
all premiums on all such insurance.
 
 
 
Schedule 4.7-4

--------------------------------------------------------------------------------

EXHIBIT A

 
Form of Annual Budget
 
 
 
[To come]
 

 
 
Exhibit A-1

--------------------------------------------------------------------------------

EXHIBIT B

 
Contribution Agreement
 

[Intentionally omitted from filing]
 
 
 
 
 
 
Exhibit B-1

--------------------------------------------------------------------------------

EXHIBIT C

 
Management Agreement
 
[Intentionally omitted from filing]
 

 
 
 

 
Exhibit C-1
 

--------------------------------------------------------------------------------

EXHIBIT D

 
Purchase Agreement
 
[Intentionally omitted from filing]
 
 
 

 
 

Exhibit D-1
 

--------------------------------------------------------------------------------

EXHIBIT E

 
SP Subsidiary Limited Liability Company Agreement
 
[Intentionally omitted from filing]
 
 
 
 

 
 
 
Exhibit E-2

--------------------------------------------------------------------------------

EXHIBIT F

 
SP Subsidiary Partnership Agreement
 
[Intentionally omitted from filing]
 
 
 
 
 
 
Exhibit I-1
 
 

--------------------------------------------------------------------------------